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Businesses in Bahrain and across the region are urged to begin early preparation for ‘IFRS 18: Presentation and Disclosure in Financial Statements’, a major new standard taking effect for annual periods beginning on or after January 1, 2027.
Replacing IAS 1, the standard aims to boost comparability and transparency in financial reporting – particularly within the profit and loss statement. Because it requires retrospective application and comparative information, companies must adapt their reporting structures, systems, and performance metrics well ahead of deadline.
Key changes include defined categories for income and expenses (operating, investing, and financing), defined subtotals such as operating profit, and strict requirements for management-defined performance measures (MPMs).
“IFRS 18 is more than a change to financial statement presentation—it introduces greater structure around how performance is classified and communicated,” said Grant Thornton Bahrain assurance partner Yaser Abbas. “The vital first step is understanding where new requirements affect existing practices.”
Transitioning involves more than technical compliance. Companies must evaluate how statutory reporting, internal management reports, investor communications and IT systems align. Financial institutions where investing or financing are primary operations will face unique mapping considerations.
The firm’s director Gautam Agrawal emphasised: “The technical requirements are only one part of the transition. Businesses will need to consider how existing financial information is mapped into the new presentation, whether the required information is readily available, and how consistently performance measures are defined across financial statements and other communications.”
“Good reporting ultimately helps stakeholders understand performance,” noted Grant Thornton Bahrain senior partner Jatin Karia. “IFRS 18 gives organisations an opportunity to look beyond compliance and ensure their reporting is clear, consistent, and meaningful.”
The firm is advising boards, audit committees and finance teams to use 2026 to review financial statement structures, test comparative reporting, and establish governance over key judgements.
In conclusion, Grant Thornton Bahrain managing partner Jassim Abdulaal added: “Changes in financial reporting are best managed with sufficient lead time. Starting early allows leadership to approach the transition thoughtfully, rather than treating it as a rush at year-end.”
avinash@gdnmedia.bh
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