Key Changes to the Presentation of the Statement of Financial Position under IFRS 18 / TFRS 18

1. No fundamental change to the balance sheet format, but clearer disclosure rules

The current/non-current distinction for assets and liabilities (or, where appropriate, presentation in order of liquidity) has been carried over from IAS 1 to IFRS 18 largely unchanged.

However, clearer guidance has been introduced on the principles of aggregation and disaggregation.

2. 🔍 Disaggregation principles strengthened

What is it?

IFRS 18 defines the roles of the primary financial statements and the notes, and requires items to be aggregated on the basis of shared characteristics and disaggregated where their characteristics differ. Material information must not be obscured by combining it with immaterial information. For example:

Material amounts included in "other payables" should be shown separately in the balance sheet or in the notes.

Mixed line items must not mislead users.

Purpose:

To prevent the misuse of vague accounts such as "other"

To help investors and auditors better understand balance sheet line items

3. 📌 Labelling and disclosure of balance sheet items expanded

For example:

Goodwill has been added by IFRS 18 to the items that must be presented as a separate line item in the balance sheet.

Labels such as "other" should be used only when a more informative label cannot be found; in that case, information about the item's content should be provided.

4. 🧾 Reading the balance sheet together with the notes enriched

IFRS 18 calls for a more systematic approach so that notes related to the balance sheet are meaningful and readable for users.

The material components of items aggregated in the balance sheet should be shown disaggregated in the notes.

5. 💼 Order of line items

As under IAS 1, IFRS 18 does not impose a specific order or format for balance sheet items. A common order in practice is:

Assets: Current assets → Non-current assets (or the reverse)

Liabilities: Current → Non-current

Equity: Share capital, retained earnings, revaluation reserves, etc.

6. 📉 Offsetting rules retained

Assets and liabilities may not be offset unless required or permitted by an IFRS. This principle has been carried over unchanged from IAS 1 to IFRS 18.

The conditions for offsetting financial assets and liabilities continue to be set out in IAS 32.

7. 📘 References to other related standards

Because some guidance on balance sheet presentation is set out in detail in standards such as IFRS 7 (Financial Instruments: Disclosures), IFRS 18 emphasises consistent and coherent disclosure with those standards.

🧾 Summary