RIP IAS 1 (1975–2026)
IAS 1 Presentation of Financial Statements gives way to IFRS 18 for periods beginning on or after 1 January 2027. What did it leave behind?
IAS 1, Presentation of Financial Statements. Born 1975. Superseded for periods beginning on or after 1 January 2027. Peacefully, after a long illness that began in April 2024, when the IASB issued its successor. Aged 51. RIP.
It told the world what a set of financial statements is, and the world mostly listened. Like all standards, it will not go all at once: an entity whose year starts on 1 December 2026 will keep it company until November 2027. For the calendar-year majority, though, the December 2026 accounts are the last it will see. Mourners are asked to let it see out its final year-end.
Early life
IAS 1 was born in 1975, one of the first standards of the International Accounting Standards Committee. It started small and modest, as Disclosure of Accounting Policies, with a single request: tell the reader how you did your accounting.
Predeceased by
IAS 1 is predeceased by IAS 5, on information to be disclosed in financial statements, and IAS 13, on current assets and current liabilities, both of whom it swallowed whole in 1997. That year the IASC issued a new IAS 1, Presentation of Financial Statements, which replaced the original together with its two unfortunate neighbours, for periods beginning on or after 1 July 1998. It required a separate statement of changes in equity, or of gains and losses not recognised in the income statement, and allowed departures from the standards only in extremely rare cases.
When the IASB took over in April 2001, it adopted IAS 1 along with the rest of the family silver.
A full life
IAS 1 was revised more often than most, and took every makeover in good spirit.
December 2003: revised in the IASB's Improvements project, ahead of Europe's move to IFRS in 2005.
September 2007: its big moment. It introduced the statement of comprehensive income, separated owner and non-owner changes in equity, and renamed the balance sheet the statement of financial position. It did not insist on the new names, and almost everyone took it at its word.
June 2011: learned to sort other comprehensive income into items that might be reclassified to profit or loss and items that would not.
December 2014: the Disclosure Initiative, in which it reminded preparers that materiality applies to notes too, and that it was never meant to be a checklist. Nobody believed it.
October 2018: shared a new definition of material with IAS 8.
February 2021: stopped asking for "significant" accounting policies and started asking for material accounting policy information, effective from 2023.
Its later years were dominated by one question: when is a liability current? Amendments issued in January 2020 were deferred in July 2020, reworked in October 2022 as Non-current Liabilities with Covenants, and finally took effect for periods beginning on or after 1 January 2024. Friends say it never fully recovered.
It also survived an earlier attempt on its life. A joint IASB and FASB project on financial statement presentation, listed by the IASB as the replacement of IAS 1, was paused without producing a standard. The standard that finally replaced it set out to fix the statement of profit or loss, not to rewrite IAS 1 as a whole.
Survived by
IAS 1 is survived by its heir, IFRS 18 Presentation and Disclosure in Financial Statements, issued in April 2024, effective for annual periods beginning on or after 1 January 2027, and endorsed in the EU in February 2026. IFRS 18 inherits the primary statements, comparatives, offsetting, the statement of changes in equity, current and non-current classification and capital disclosures, most of them substantially unchanged. It has added operating, investing and financing categories, two new required subtotals and disclosure of management-defined performance measures, and is already redecorating.
It is also survived by IAS 8, which takes in the general principles and has changed its name for the occasion to Basis of Preparation of Financial Statements. Fair presentation, compliance with IFRS Accounting Standards, going concern, the accrual basis and accounting policy disclosures now live there. A few have gone to stay with IFRS 7: the disclosures on puttable instruments classified as equity now live at IFRS 7.19A–19B.
Forwarding addresses
For those who knew IAS 1 by its paragraph numbers, its best-loved paragraphs have moved.
Requirement | Was | Now |
|---|---|---|
Going concern | IAS 1.25 | IAS 8.6K |
Going concern factors | IAS 1.26 | IAS 8.6L |
Fair presentation | IAS 1.15 | IAS 8.6A |
Policy information | IAS 1.117 | IAS 8.27A |
Judgements | IAS 1.122 | IAS 8.27G |
Estimation uncertainty | IAS 1.125 | IAS 8.31A |
Current/non-current | IAS 1.60 | IFRS 18.96 |
Capital disclosures | IAS 1.134 | IFRS 18.126 |
The paragraphs themselves are largely unchanged. Only the address is new, which means every accounting policy note, audit file and disclosure checklist that cites them needs redirecting.
Funeral arrangements
The family asks that preparers attend to three things before the December 2026 year-end.
Prepare to restate. IFRS 18 applies retrospectively, so the 2026 statement of profit or loss will be restated in the new format as the comparative for 2027, with a reconciliation of each line item to the amounts presented under IAS 1 (IFRS 18.C3). Capture the data now, while the deceased is still warm.
Disclose. IAS 8 already requires disclosure of the expected impact of a standard that has been issued but is not yet effective (IAS 8.30–31), and ESMA has asked listed issuers for entity-specific information on exactly that in their 2026 annual reports.
Redirect. Update policy notes, checklists and templates from IAS 1 to the new IFRS 18 and IAS 8 paragraph numbers.
In lieu of flowers
Auditors paying their respects will look for:
an IAS 8 disclosure of IFRS 18's expected impact in the 2026 statements that is specific to the entity, not boilerplate;
a plan, and the data, for restating the 2026 comparatives, including the line-by-line reconciliation;
in 2027, going concern, judgements and estimation uncertainty cited at their new addresses.
Work it through with our tools
The IFRS 18 Transition Tool helps you settle the estate: it takes a real set of accounts from IAS 1 to IFRS 18, sorts income and expenses into the new categories, builds the subtotals and helps you document management-defined performance measures. It is free with a member account.
For the year-end work in Excel, our IFRS 18 Transition Pack restates both years line by line and drafts the transition note with the IFRS 18.C3 reconciliation.
IAS 1 in the Learning Hub: the deceased, as it stood, for the last of the IAS 1 year-ends.
IFRS 18 in the Learning Hub: the heir, in full.
IAS 8 in the Learning Hub: the sibling with the new name and the inherited paragraphs.
IAS 1 asked one modest question in 1975, how did you do your accounting, and spent half a century turning it into a complete account of what financial statements must contain. Its heir will be judged by the same test: whether a reader can pick up the accounts and understand what happened. Rest in peace, IAS 1. Your paragraphs are rehoused, your comparatives are about to be restated, and your balance sheet is still called a balance sheet by almost everyone.
This is an obituary in style only. Dates are taken from the IASB's records and published histories of the standard. No standards were harmed in the writing of it.
