The introduction of IFRS 18 brings a major change to financial reporting practices because it establishes new requirements for insurers who must report complicated revenue identification and investment income and insurance service performance. The system provides new financial statement structures which improve visibility of operational results while enforcing tighter standards for Management Performance Measures and financial policy disclosure.
Our IFRS 18 Reporting Advisory services support insurers in assessing the impact of IFRS 18, redesigning their financial statements format, aligning disclosures and integrating reporting frameworks with IFRS 17 outputs. We assist in establishing MPM frameworks, upgrading systems and processes, strengthening governance and ensuring audit-ready implementation. The objective is to create consistency, comparability and clarity in reporting aligned with evolving international accounting standards 18 and broader features of IFRS.
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Service Coverage
Impact Assessment and Gap Analysis
We conduct an extensive evaluation process to assess how IFRS 18 affects current reporting systems which include main financial statements and their subtotal components as well as their methods of classifying income and expenses and their disclosure requirements. The process involves assessing the existing chart of accounts and matching its line items to IFRS 18 categories which include operating and investing and financing while we also look for shortcomings in current reporting methods.
Our analysis also covers interaction with IFRS 17 outputs, ensuring that insurance service results and finance income/expenses are correctly presented. We identify deviations from accounting standards 18 requirements and provide a structured roadmap for remediation aligned with as 18 accounting standard interpretations where applicable.
Financial Statement Restructuring and Presentation
We redesign financial statements to comply with IFRS 18 requirements, including restructuring the statement of profit or loss, balance sheet, and cash flow statement. This involves defining new subtotals, ensuring consistent classification of items and standardizing presentation formats across reporting periods.
Our work ensures alignment with the prescribed financial statements format and improves clarity in presentation of financial information. We also ensure that insurance-specific elements such as underwriting results, insurance finance income and investment returns are appropriately segregated and presented in line with IFRS 18 principles and broader IFRS features.
Management Performance Measures (MPM) Framework
We create and establish the verification process for Management Performance Measures which will be used to validate their precise definition and standardized calculation methods and their compliance with IFRS measurement standards. The process requires us to identify all non-GAAP metrics which management currently employs and we will evaluate their practical value while making them compliant with IFRS 18 disclosure standards.
Our approach includes establishing calculation methodologies which define governance over MPM usage and we will maintain open disclosure of reconciliation process. This process enhances the trustworthiness of both internal and external reporting while it meets the disclosure requirements of accounting policies according to IFRS 18.
Disclosure and Reporting Alignment
We provide assistance for developing and executing improved disclosure frameworks which organizations need to comply with IFRS 18 requirements. The requirements for this project involve providing comprehensive explanations of MPMs together with the complete income and expense breakdown and the full explanation of all subtotal values.
Our team verifies that all disclosure materials adhere to IFRS 17 requirements while maintaining compliance with international accounting standards 18 which enables better comparison between different financial reporting periods. Our work also focuses on strengthening accounting policies disclosure, ensuring that key judgements, assumptions and methodologies are clearly documented and defensible.
Systems and Process Changes
We assess and redesign systems and processes to support IFRS 18 reporting requirements. The project needs to update enterprise resource planning systems and financial consolidation tools and reporting engines so they can collect new data points which will enable them to produce outputs that comply with IFRS 18 standards. Our approach guarantees that actuarial systems will work together with financial systems and reporting tools without needing manual corrections while ensuring accurate data delivery.
We also implement automated controls to support accurate classification and presentation of financial information.
Transition and Implementation Support
We deliver complete assistance for IFRS 18 transition through our services which include development of transition strategies restatement of previous periods and execution of new reporting systems. The process requires us to establish starting balances while we correct past financial records and maintain uniformity throughout all reporting periods.
Our implementation process results in full compliance with accounting standard 18 because we combine IFRS 18 requirements with currently used IFRS 17 standards. We provide support for dry runs and parallel reporting which helps with stakeholder communication during the transition process.
Governance and Documentation
We establish governance frameworks to support IFRS 18 compliance through which we define organizational roles and responsibilities together with our review mechanisms and control systems. The system guarantees that all reporting procedures follow the same standards while maintaining open operations which auditors can examine.
We also prepare detailed documentation covering accounting policies, methodologies, MPM definitions and reporting frameworks. This strengthens compliance with accounting policies disclosure and ensures alignment with features of IFRS.
Audit and Regulatory Support
We conduct an extensive evaluation process to assess how IFRS 18 affects current reporting systems which include main financial statements and their subtotal components as well as their methods of classifying income and expenses and their disclosure requirements. The process involves assessing the existing chart of accounts and matching its line items to IFRS 18 categories which include operating and investing and financing while we also look for shortcomings in current reporting methods.
Our support ensures that reporting outputs meet regulatory expectations and are fully aligned with IFRS 18 requirements and evolving international accounting standards 18.
How We Can Help You
We deliver structured, execution-driven IFRS 18 solutions tailored for insurance companies:
- Redesign financial reporting structures aligned with IFRS 18
- Establish robust and auditable MPM frameworks
- Integrate IFRS 18 with IFRS 17 reporting outputs
- Strengthen governance, controls and disclosures
- Enable smooth audit and regulatory interactions
Example:- For a general insurer, we restructured the profit or loss statement by separating insurance service results from investment components and introducing IFRS 18-defined subtotals. This improved transparency in performance reporting and reduced audit review time by 22%.
FREQUENTLY ASKED QUESTIONS
IFRS 18 requires organizations to implement structured subtotal systems while establishing income and expense classifications which must be disclosed according to its new requirements for MPMs.
These categories are defined based on the nature of activities, with insurance service results typically classified under operating activities.
Any measure used internally by management to assess performance that is not defined by IFRS standards.
IFRS 18 requires the disclosure of the definitions of MPM, the calculation methods used and the reconciliation to IFRS metrics.
The presentation of insurance contracts needs to follow IFRS 18 while their measurement requires compliance with IFRS 17 because both standards need to be implemented together for proper execution.
Introduction of defined subtotals and reclassification of income and expenses into standard categories.
Comparatives must be restated to align with IFRS 18 presentation requirements.
There must be an updation of ERP and other reporting systems to generate IFRS 18 compliance reports along with the classification.
Subtotals must be consistent across each reporting period.
Disclosures include definitions, purpose, calculation methodology and reconciliation to IFRS measures.
Through standardized templates, governance controls and system-based validations.
Classification judgments, MPM disclosures, consistency of presentation and completeness of disclosures.
Yes, unless impracticable, comparative periods must be restated.
By standardizing presentation and requiring detailed disclosures of performance measures.
Accounting policies, MPM frameworks, classification methodologies and supporting reconciliations.