For companies operating in Europe, navigating the new IFRS standards isn’t just regulatory housekeeping—it’s a strategic imperative.
Now is the time to prepare for one of the most significant shifts in global financial reporting in recent years. The introduction of IFRS 18 (Presentation and Disclosure in Financial Statements), along with IFRS S1 (General Requirements for Disclosure of Sustainability-related Financial Information) and IFRS S2 (Climate-related Disclosures), is reshaping how private equity-backed companies report both financial and sustainability performance. Here’s what you need to know:
What’s changing:
IFRS 18 will replace IAS 1 (Presentation of Financial Statements) and introduces a sharper focus on how performance is presented in income statements. It formalises the use of management-defined performance measures (MPMs) and enhances comparability by requiring new standardised subtotals, such as operating profit. This change directly impacts how investors and stakeholders interpret your core business performance.
IFRS S1 sets the foundational framework for sustainability-related disclosures across all ESG themes (that is, key environmental, social, and governance factors). It requires businesses to provide information about sustainability risks and opportunities that could affect their cash flows, margins, access to finance, and cost of capital.
IFRS S2 specifically zooms in on climate-related risks and opportunities. Based on the TCFD (Task Force on Climate-related Financial Disclosures) framework, it mandates disclosures around governance, strategy, risk management, metrics, and targets related to climate change.
Why it matters:
Investor confidence: Investors are prioritising sustainability alongside financial performance. Transparent, standardised, and consistent reporting enhances credibility and can reduce the cost of capital.
Compliance readiness: These standards are rapidly being adopted by many companies and endorsed by national regulators and stock exchanges, in Europe and globally. Early adoption positions your business for smooth compliance.
Strategic insight: Proper implementation supports better internal decision-making, linking financial outcomes with sustainability performance. This alignment is critical for long-term value creation.
Market differentiation: Firms that lead on ESG and financial transparency stand out to investors, customers, and talent. IFRS 18, IFRS S1, and IFRS S2 are not just compliance tools – they’re competitive assets.
If you’re looking to prepare for the new IFRS standards, Accordion can help. Our cross-functional, hands-on Foundational Accounting and FP&A Enhancement team supports clients in assessing the impact of the new IFRS standards, redesigning financial statement formats, integrating ESG data into reporting processes, and aligning internal controls. We guide your team through technical implementation, training, and stakeholder communication—helping you turn these new standards into an opportunity to elevate your financial reporting and market position.