Future-Proof Financial Reporting for IFRS 18 with OneStream

Navigate IFRS 18 Confidently with Ascend Partners

For most finance teams, the income statement is not simply a report. It is the product of account mappings, hierarchies, consolidation logic, and calculation rules embedded within the financial reporting process. As a result, when the presentation of the income statement changes, the underlying structures that support it often need to be redesigned as well. That is the practical challenge introduced by IFRS 18.

Issued by the International Accounting Standards Board (IASB) in April 2024, IFRS 18 replaces IAS 1, which had governed the presentation of financial statements since 1997. The new standard does not change how organizations recognize or measure financial information. Instead, it focuses on how financial performance is presented in the income statement and what additional disclosures must accompany it.

What IFRS 18 Requires

The standard takes effect for annual periods beginning on or after January 1, 2027, and applies retrospectively. It sorts income and expenses into five categories: operating, investing, financing, income taxes, and discontinued operations. It also adds two required subtotals: operating profit and profit or loss before financing and income taxes. Classification depends partly on an entity's main business activities, so a bank, for example, will place interest income differently from a manufacturer.

Beyond the statement itself, three areas carry most of the implementation effort.

Management-Defined Performance Measures (MPM)

Subtotals like adjusted EBITDA or adjusted operating profit, when used in public communications, now need disclosure in a single note within the audited financial statements. Each measure requires:

• An explanation of what it represents

• A description of how it is calculated

• A reconciliation to the closest IFRS subtotal

• The tax and non-controlling interest effect of each adjustment

Ratios such as gross margin or return on equity fall outside the definition, as does free cash flow. A useful early step is identifying which existing metrics are in scope.

Existing KPIs

Metrics built on the IAS 1 structure may no longer line up with the new subtotals. Gross profit percentage, for example, will need a bridge to operating profit.

Comparatives

For calendar-year reporters, the 2027 financial statements will include 2026 figures restated under the new structure. Most of 2026 has already closed under IAS 1, so for many teams the restatement work has started, whether they planned it or not. Implementing the new classifications now allows finance teams to validate them during live close cycles, reducing the risk and effort of recreating an entire year of comparative information under tight reporting deadlines.

Reporting Structures Behind the Statement

Updating the layout of the income statement is the manageable part. Most of the effort goes into the structures that feed it. Moving an account into a new category means reviewing the mappings, hierarchies, and calculations connected to that account. Interest income, investments in associates, and FX differences require the most judgment. Accounts that net revenue and costs together need to be separated before they can be classified.

This work also depends on accounting decisions. System changes can be finalized once the finance team and its auditors have agreed on how each item should be classified.

Where OneStream Fits

In OneStream, IFRS 18 presentation can sit alongside existing statutory and management reporting in the same application. The new structure can run in parallel before it becomes mandatory, and MPM reconciliations draw on the same data as the financial statements. When MPM adjustments are held in dedicated members, each reconciling item traces back to the underlying entity-level data.

There is more than one way to implement this. The main considerations are whether to change historical data or leave it as loaded, how much to rely on journals, and how far to automate. Each approach carries different implications for audit traceability and ongoing maintenance.

Compare The Approaches in Detail

In our companion webinar, Integrating IFRS 18 into OneStream, we walk through the three implementation approaches:

• Applying transformation logic at the reporting layer

• Reloading historical data into the new structure

• Using journal-based adjustments

We cover the audit and maintenance trade-offs of each, and why most organizations end up combining them. The session also shows which common metrics qualify as MPMs, how to build the reconciliation in OneStream, and how a focused engagement can deliver IFRS 18 reporting in as little as five weeks.

Get Ready for IFRS 18 with Ascend Partners

We've completed more than 700 OneStream implementations, so we know how a change to one reporting structure ripples through the rest of an application. Our IFRS 18 work follows the sequence this article describes. We start with the classification decisions your finance team and auditors need to settle, then build the OneStream structure to support them, with 2026 comparatives in scope from the first week.

If you're assessing how IFRS 18 affects your OneStream environment, talk to our team.

About Ascend

Ascend Partners is the diamond standard in financial & data transformation solutions and proudly serves clients globally from our headquarters in New York, NY. We specialize in delivering sophisticated solutions that streamline financial workflows, transform data, and enhance operational efficiency for organizations worldwide. With deep industry expertise and a commitment to innovation, Ascend empowers businesses to maximize performance, improve decision-making, and drive sustainable growth.