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Preparing your organisation for the biggest shift in financial reporting
Across global capital markets, investors are demanding greater transparency, consistency and comparability in how organisations communicate financial performance. In response, the International Accounting Standards Board (IASB) introduced IFRS 18, a new financial reporting standard that brings greater structure and discipline to the presentation of financial statements.
As India moves towards adopting this framework through Ind AS 118, organisations will need to rethink not only how financial information is presented, but also how performance is defined, explained and communicated to stakeholders.
With implementation expected from 1 April 2027, the transition extends beyond financial statement presentation. It requires organisations to assess the impact on reporting frameworks, management-defined performance measures, systems, controls, governance processes and investor communication.
For many organisations, FY 2026–27 will effectively become the comparative period for transition, making early preparation critical to achieving a smooth and controlled implementation.
Income and expenses to be classified as operating, investing, or financing, with captions for income taxes and discontinued operations, requiring a full redesign of existing reporting formats and underlying architecture driven by an assessment of an entity’s Main Business Activities.
Operating profit and profit before financing and tax become defined, mandatory subtotals, significantly reducing discretion in how performance is presented.
Measures such as adjusted EBITDA move into audited financial statements, requiring clear definitions, detailed reconciliations and full audit-level documentation.
Clear rules govern line items, subtotals and disclosures, driving consistent presentation across all reporting entities within a group.
Stronger requirements now guide how information is grouped and disclosed across primary statements and notes, backed by documented judgement and structured decision-making.
Explore what the shift to Ind AS 118 means for organisations as financial reporting moves to a defined, category‑based framework with mandated subtotals and tighter disclosure discipline. This video breaks down how the change goes beyond format into transaction‑level classification, MPM governance and system‑led transformation, requiring early, coordinated action across finance, data and reporting functions.
Ind AS 118 requires all MPM disclosures to be presented in a single note within the financial statements. For each measure, organisations must provide:
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Alignment with evolving reporting frameworks
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Organisations will need to align with changes in financial statement presentation, including updates expected in Schedule III and SEBI reporting formats as Ind AS 118 takes effect.
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Implications for group reporting structures
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Classification under Ind AS 118 depends on the nature of the organisation’s activities. As a result, similar income and expense items may be categorised differently across entities, requiring adjustments to achieve a consistent group-level presentation.
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System and process alignment across entities
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Organisations with multiple reporting entities may need to redesign consolidation systems, mapping logic and reporting hierarchies to align classification and presentation across the group.
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An overview of Ind AS 118, its impact on financial statement presentation, disclosures and comparability, with practical steps to prepare ahead of April 2027.
Define clear classification logic across operating, investing and financing activities, with consistent subtotals aligned across reporting and investor communication.
Identify, document and govern management-defined measures with clear reconciliations and alignment to financial and external reporting.
Set up dual reporting for Ind AS 1 and Ind AS 118 to ensure a smooth transition and accurate restatements.
Redesign ERP, chart of accounts, and mapping to enable automated classification and accurate financial reporting.
Strengthen controls, documentation and stakeholder alignment for consistent and audit-ready adoption.
Aligning investor communications with the new reporting and explaining the changes to external stakeholders.
We can conduct simulations based on the financial statements and supporting information provided to us.
Ind AS 118 changes not just how financial performance is presented, but how it is defined, governed and communicated. Organisations that begin their transition planning now will be better placed to manage the complexity, meet the deadline with confidence, and build a reporting function fit for the standards that follow.
If you ask most CFOs where they want to spend more time, the answer usually sounds reassuringly strategic: business partnering, decision support, shaping outcomes and helping business make better choices.
Most accounting standards change processes. Some change disclosures. A few quietly change the conversation. I believe Ind AS 118 belongs in the third category.
