IFRS 18 Transition Plan Template

IFRS 18 Transition Plan: [Entity or group]

Implementation plan for moving the financial statements from IAS 1 to IFRS 18 Presentation and Disclosure in Financial Statements: scope and dates, governance, line-by-line impact assessment, main business activities assessment, income statement categories and new subtotals, management-defined performance measures (MPMs), aggregation and expenses by nature, statement of cash flows changes, systems and chart of accounts mapping, comparative restatement, communication to investors and lenders, plan (Gantt), risks and decisions. IFRS 18 applies to annual reporting periods beginning on or after 2027-01-01 with retrospective application. In the UK it was adopted by the UK Endorsement Board in December 2025; in the EU it was endorsed by Commission Regulation (EU) 2026/338 of 2026-02-13 (Official Journal 2026-02-16). IFRS 18 and other IFRS Accounting Standards are cited by name and number only: obtain the standard for the normative text, which this template neither quotes nor restates. Replace every [bracketed] value and every row marked Example. This is a document format, not accounting, audit, legal or financial advice.

Document control

Approvals

Revision history

Contents

1. 1. Scope, dates and decisions
2. 2. Governance and workstreams
3. 3. Impact assessment by line item
4. 4. Main business activities assessment
5. 5. Categories and new subtotals
6. 6. Management-defined performance measures
7. 7. Aggregation, disaggregation and expenses by nature
8. 8. Statement of cash flows
9. 9. Other affected areas
10. 10. Systems, chart of accounts and data
11. 11. Comparative restatement and transition disclosures
12. 12. Communication to users, lenders and auditors
13. 13. Plan and timeline
14. 14. Risks, issues and decisions
15. 15. Glossary and references

1. Scope, dates and decisions

IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1 Presentation of Financial Statements. It carries forward many IAS 1 requirements, introduces new requirements on the structure of the statement of profit or loss, on management-defined performance measures and on grouping of information, and comes with consequential amendments to other standards, including IAS 7, IAS 8 (retitled Basis of Preparation of Financial Statements, which now holds the going concern and other basis-of-preparation requirements moved from IAS 1), IAS 33, IAS 34 and IFRS 7. Read the standard, its basis for conclusions and the consequential amendments; this plan only organises the work.

Most groups apply IFRS 18 for the first time in the FY2027 annual report, but the first visible output is usually earlier: the first interim report of 2027, the lender compliance certificate for the first 2027 test date, and the budget and management reports that should already use the new subtotals so that comparisons stay like for like. Put all of these dates on the plan in section 13.

2. Governance and workstreams

The steering committee (CFO as chair, the six workstream leads, the head of internal audit as observer) meets monthly. Judgements go to the steering committee with a technical memo; the audit committee approves the main judgements and the external auditor reviews them before the first interim report. Record every decision in section 14.

3. Impact assessment by line item

Take every income and expense account in the group chart of accounts, including accounts used only by one entity, and record its current line in the IAS 1 statement, its proposed IFRS 18 category, the proposed line, and the reason. Where an account mixes items that belong to different categories, plan an account split from 2026-01-01 so that the comparative year can be restated from data rather than estimates.

Check: 140,000 - 59,000 - 31,800 - 24,200 - 14,350 + 400 - 2,600 = 8,450 operating profit under IFRS 18 (8,600 under IAS 1 with the associate inside operating profit); 8,450 + 150 + 200 = 8,800; 8,800 - 1,100 - 400 = 7,300 profit before tax; 7,300 - 2,475 = 4,825 profit for the year. Income tax is 25% of 9,900 (profit before tax plus the non-deductible impairment of 2,600) = 2,475, an effective rate of 2,475 / 7,300 = 33.9%. These figures equal the FY2026 column of Annual Budget (finance/annual-budget); its management P&L shows the 5,600 of depreciation, amortisation and PP&E impairment on one line and the functional costs before depreciation.

Accounts that most often need a split or a new judgement: interest and foreign exchange on items that are not borrowings (for example pension liabilities, provisions with unwinding of discount, supplier finance arrangements), fair value changes on derivatives used to hedge operating or financing exposures, gains and losses on investments, and income from associates and joint ventures. Write a technical memo for each judgement and refer to it in the reason column.

4. Main business activities assessment

IFRS 18 requires an assessment of whether an entity has specified main business activities, and the outcome changes the classification of certain income and expenses between the operating, investing and financing categories. The assessment is a matter of fact, supported by evidence such as segment information, the way management describes the business, and the importance of the activity to performance. Perform it for the group and for each reporting entity with separate IFRS statements, and repeat it when the business changes.

Record the conclusion in a technical memo approved by the audit committee (DEC-003). If the conclusion changes in a later period, the standard has specific requirements on how to reflect the change; read them before the change happens.

5. Categories and new subtotals

The pro forma below restates the FY2026 consolidated statement of profit or loss of Corvid in the IFRS 18 structure, using the mapping in section 3. Profit for the year does not change. Validate the layout and labels against IFRS 18 and its illustrative material before use.

What changes for Corvid in the example: operating profit falls from EUR 8,600k to EUR 8,450k because the share of profit of the associate, which Corvid's IAS 1 policy presented inside operating profit, moves to the investing category; interest income, previously netted in the finance line, also moves to investing; a new subtotal "profit before financing and income taxes" of EUR 8,800k appears; and the finance cost line is replaced by financing category lines. Profit before tax and profit for the year do not change. Groups with more varied income (investment gains, pension interest, derivative results) see larger changes.

Plan a reconciliation for each line between the old and new presentation; it serves the auditor, the transition disclosures and the investor briefing.

6. Management-defined performance measures

IFRS 18 brings certain performance measures that management uses in public communications into the audited financial statements, with a note that includes a reconciliation to the most directly comparable subtotal and other information. The standard defines which measures qualify and lists subtotals that are excluded; apply the definition in IFRS 18 to each candidate and record the conclusion. Operating metrics that are not subtotals of income and expenses (annual recurring revenue, customer counts) and ratios are assessed separately against the definition.

Reconciliation of MPM-001 for FY2026 (EUR k). The income tax effect is computed at the statutory rate of the jurisdiction in which each item arises (Example rates: 25% blended for depreciation, amortisation and impairment; 20% for the Vietnam restructuring, the standard corporate income tax rate under Law No. 67/2025/QH15, effective 2025-10-01; 30% for the German disposal gain, combining corporate income tax, solidarity surcharge and trade tax; the share-based payment charge is treated as not deductible). There is no non-controlling interest in the example.

Check: 8,450 + 5,600 + 2,600 + 900 + 500 - 400 = 17,650. Tax effects: 5,600 x 25% = 1,400; 900 x 20% = 180; 400 x 30% = 120; net (1,400) + (180) + 0

• 120 = (1,460). On the old IAS 1 basis adjusted EBITDA was EUR 17,800k (16,800 + 900 + 500 - 400), which is the covenant EBITDA in Covenant Compliance Certificate (finance/covenant-compliance-certificate). The EUR 150k difference is the share of profit of the associate: the loan agreement's frozen GAAP clause keeps it inside covenant EBITDA, while IFRS 18 moves it out of operating profit. This is exactly the kind of divergence the lender letter (COM-004) must explain, so keep the two reconciliations separate.

For each MPM, prepare the note content that the standard requires (read the MPM paragraphs of IFRS 18 and its application guidance), and set a control for changes: any new measure, change in calculation or discontinued measure goes through the disclosure committee and is explained. Align the labels in the results presentation with the labels in the note, so that the same number does not appear under two names.

7. Aggregation, disaggregation and expenses by nature

IFRS 18 adds principles for grouping items into line items and notes and for labelling them. Review each primary statement line and each note table against those principles and record the outcome. Expect work on lines labelled "other", on items that combine dissimilar transactions, and on the choice between presenting operating expenses by nature, by function or a mix.

Corvid presents operating expenses by function. IFRS 18 then requires specified information about certain expenses by nature in a single note; read the requirement for the list of items and the related qualitative information. Collect the data by function from 2026-01-01.

Check: employee benefits 9,800 + 14,200 + 18,600 + 9,700 = 52,300 (about EUR 76k per FTE on the 685 FTE at 2026-12-31 in Annual Budget); depreciation 1,576 + 300 + 800 = 2,676; depreciation 2,676 plus amortisation 2,900 plus impairment 24 gives EUR 5,600k of depreciation, amortisation and impairment, the amount added back in section 6 and in the covenant EBITDA. The impairment of EUR 24k is the idle conveyor write-down in Fixed Asset Register (finance/fixed-asset-register). Whether impairment is added back in EBITDA is a definition choice; Corvid adds it back (DEC-005) and applies this consistently in the MPM note, management reports and lender reports.

8. Statement of cash flows

IFRS 18 amends IAS 7. Read the amended paragraphs for the starting point of the indirect method and for the classification of interest and dividends received and paid. The table records Corvid's current policy and the expected outcome, to be confirmed by the technical memo.

For FY2026, interest paid of EUR 1,450k leaves operating activities and interest received of EUR 200k leaves them too, so reported operating cash flow rises by 1,450 - 200 = EUR 1,250k. Investing cash flow rises by the EUR 200k of interest received, and financing cash flow falls by the EUR 1,450k of interest paid. Check: 1,250 + 200 - 1,450 = 0, so total net cash flow is unchanged. Any measure that uses operating cash flow (cash conversion, free cash flow in management reports, lender definitions) must be reviewed.

9. Other affected areas

Vietnam note: CC-VN prepares statutory accounts under Vietnamese Accounting Standards and Circular 99/2025/TT-BTC, which IFRS 18 does not change. Circular 118/2026/TT-BTC (check) lets members of the Vietnam International Financial Centre elect IFRS from FY2027; CC-VN is not a member in the example. The group reporting package from CC-VN must still follow the group IFRS 18 mapping.

10. Systems, chart of accounts and data

Choose the level at which the category is assigned. The most robust design adds a category attribute to each income and expense account in the group chart of accounts, with account splits where one account mixes categories, and carries the attribute into the consolidation system. A reporting-layer mapping is quicker but harder to control. Whatever the design, keep a single mapping table under change control with an owner.

Test the mapping by running the FY2026 trial balance through the new reports and reconciling the results to the pro forma in section 5. Run the test again after every chart of accounts change and after the FY2026 year-end close.

11. Comparative restatement and transition disclosures

Restate the comparative periods by running the closed FY2026 ledger (and the H1 2026 ledger) through the new mapping, and document every reclassification with its amount. The restatement changes presentation only; equity and profit for the year do not change. Read the transition requirements in IFRS 18 for the disclosures needed in the first year, including any reconciliation between the previous and new presentation, and for interim reports.

Keep the restated comparatives in a locked version so that the figures used in the H1 2027 report, the FY2027 report and the investor materials are the same.

12. Communication to users, lenders and auditors

Plan communication in three waves. First, disclose the expected effect in the FY2026 annual report as a new standard issued but not yet effective. Second, brief analysts, lenders and rating agencies before the first IFRS 18 interim report, with the restated FY2026 and H1 2026 figures and the MPM definitions. Third, explain the changes again in the FY2027 annual report.

13. Plan and timeline

Status at 2026-10-25 (Example): assessment and policy phases done; systems build in progress; MPM inventory in review; covenant review started.

14. Risks, issues and decisions

15. Glossary and references

15.1 Glossary

15.2 References

Standard and licence note

Structure aligned with IFRS 18 Presentation and Disclosure in Financial Statements and the consequential amendments to IAS 7, IAS 8, IAS 33 and IAS 34, cited by name, number and effective date only; no text from IFRS Foundation publications is reproduced or paraphrased, and the pro forma layout is a practitioner illustration, not a copy of the standard's illustrative examples. Adoption facts are from public UK and EU sources (UK Endorsement Board, EUR-Lex); Vietnamese law is cited by number. The plan, tables, timeline and worked example are original text. Corvid Commerce Group, its entities and every figure are fictional. Check the current official version of IFRS 18, its endorsement in your jurisdiction and any local law before use. Template licence: MIT.