1.19 2024 accounts: the note on standards not yet effective does not mention IFRS 18
UK Company A · a UK-listed medical technology group · Regulator-style question
In brief
IFRS 18 Presentation [wording masked] in [date] and will replace IAS 1 from 2027. The 2024 accounts say only that '[wording masked]' are not yet effective and have not been adopted early. IFRS 18 is not named anywhere in the 2024 Annual Report, and there is no statement of its expected effect or that the effect is not yet known. The 2025 accounts describe it as having a pervasive impact on the income statement.
The evidence, as filed
Screenshot withheld to protect the company’s identity: Annual Report 2024, page 197; Annual Report 2025, page 215; Annual Report 2024, page 196. Their wording or layout could lead back to the company even with names and figures masked; the evidence list below records what each page shows.
What the report shows, and what the rule requires
| What the annual report shows | What the rule requires |
|---|---|
| What the annual report shows One generic sentence on [wording masked]; no standard named; no information on the possible impact of IFRS 18 and no statement that it is not known or reasonably estimable. | What the rule requires The note names IFRS 18, its effective date and the nature of the expected changes (new income statement categories and subtotals, management-defined performance measures, the starting point of the cash flow statement), or states that its impact is being assessed and is not yet reasonably estimable. |
The rule
IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, paragraph 30
Version relied on: UK-adopted international accounting standards (UK Endorsement Board), as in force for financial years beginning in or after January 2025
Where a new standard has been issued but not yet applied, the accounts must say so and give known or reasonably estimable information on its likely effect.
IAS 8 paragraph 31
Version relied on: UK-adopted international accounting standards (UK Endorsement Board), as in force for financial years beginning in or after January 2025
In meeting that requirement, the entity considers giving the standard's title, the nature of the change, the date it must be applied and the expected effect.
Why it applies here: by the approval date of the 2024 accounts the nature of the IFRS 18 changes was known (it is a presentation standard whose requirements were published ten months earlier), so information relevant to assessing its possible impact was available; at the least, a statement that the impact was not yet reasonably estimable was open to the company.
Why it matters
Readers of the 2024 accounts were not told that the income statement, the cash flow statement starting point and the treatment of the Group's management performance measures would change under a standard already issued.
Exposure
A question only; the 2025 report already gives the IFRS 18 disclosure.
Our workings
Note 1 of the 2024 accounts has a paragraph headed '[wording masked]' which says that [wording masked] are effective for later periods and have not been adopted early. No standard is named. The Group states that its accounts also comply [wording masked]. IFRS 18 does not appear anywhere in the 2024 Annual Report. The 2025 accounts name IFRS 18, say it was issued in [date], is effective from [date] [wording masked] presentation, and list the expected changes.
Management’s best defence, and our reply
The company would say that the generic sentence states the fact required by paragraph 30(a), that paragraph 31 lists matters an entity only 'considers' disclosing, and that in [date] the impact of IFRS 18 on the Group was not yet known or reasonably estimable, so there was nothing further to give under paragraph 30(b); it could add that the FRC's Corporate Reporting Review looked at the 2024 report and did not raise the point, and that the auditor accepted the note. However, paragraph 30(b) asks for known information relevant to assessing the possible impact, and the nature of the IFRS 18 changes (new mandatory subtotals, disclosure of management-defined performance measures, a new cash flow starting point) was known from the standard itself; and where nothing was estimable paragraph 31 points to a statement to that effect, which was not given. Because a reasonable preparer could take the narrower reading, the point is put as a question.
The fix
- For each standard issued but not yet effective that may matter to the Group, give its title, effective date and the nature of the expected change, or say that the impact is being assessed and is not yet reasonably estimable (as the 2025 accounts now do for IFRS 18).
Question for the company
When the 2024 accounts were approved, had the Group assessed IFRS 18, and was the decision not to name it or describe its possible impact based on a view that the impact was not known or reasonably estimable, or that the information was not material?
Evidence relied on
| # | What it shows | Type | Where |
|---|---|---|---|
| 1 | The whole of the 2024 disclosure on standards not yet effective | Document | Annual Report 2024, page 197 |
| 2 | The Group also claims compliance [wording masked], which issued IFRS 18 in [date] | Document | Annual Report 2024, page 196 |
| 3 | The 2025 accounts confirm IFRS 18 was issued before the 2024 accounts were approved | Document | Annual Report 2025, page 215 |
| 4 | The company's own later view of the size of the change | Document | Annual Report 2025, page 215 |
Absence check
- Document
- Annual Report 2024
- Where it would appear
- [wording masked]
- What is missing
- The title of IFRS 18 and information on its possible impact, or a statement that the impact is not yet known or reasonably estimable
- Pages looked at
- Annual Report [amount].196-197 (Note 1), p.130-135 (Audit Committee report), p.250 (parent company basis of preparation)
- Result
- 'IFRS 18', 'Presentation and Disclosure in Financial Statements' and 'management-defined performance' have no hits in the 2024 Annual Report. 'not yet effective' hits p.197 (the generic sentence quoted above) and p.250, where the parent company lists the FRS 101 exemption from disclosing [wording masked]; that exemption covers the parent company's own accounts only, not the group accounts.
Prepared by Pramanex from the company’s published annual reports, without the company’s involvement, to show how an annual report review reads. The company is not named, and nothing on this page is a statement about any identifiable company. Observations are not an audit, review or other assurance engagement, and not legal advice. A regulator-style question is a question, not a conclusion.
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