FINANCIAL REPORTING & IR

IFRS 18 is no longer just a future accounting change. For many organizations, 2026 is the year systems are being updated, trial runs are underway and early conversations with auditors have begun. For investor relations professionals, this is the year in which planning your communication strategy is just as important as preparing for the new reporting requirements. While profit numbers will remain the same, the approach to presenting financial performance to investors will see a significant shift.

From understanding the rules to managing expectations

When IFRS 18 was issued in 2024, early discussions were focused on new income statement layouts and definitions. Today, the conversation has shifted away from how to construct a new statement towards how to clearly explain these standard-driven changes.

For example, analysts and investors often rely on historic trend analysis to interpret financial performance. IFRS 18 introduces new subtotals, including operating profit, that may not align neatly with historical measures. This shift can increase the risk of misinterpreting performance compared to previous years. IR professionals are in a strategic position to bridge these knowledge gaps through clear explanations and narrative building that adds important context and clarity around performance.

Operating profit will attract attention and questions

Under IFRS 18, operating profit becomes a defined subtotal rather than a management choice. This was designed to improve comparability, but it also means some items previously considered ‘operating’ may move out, peer comparisons could shift, and analyst models will need to be adjusted.

With these changes, investors will want to know why operating profit looks different, what has changed versus prior years, and whether the change affects how management runs the business.

Clear articulation will be essential, particularly during transition periods.

Increased discipline around performance measures

One of the most significant changes for IR teams is how performance measures are treated.

Measures that management uses publicly in presentations, earnings calls or press releases may now be required to appear in the financial statements as Management-defined Performance Measures (MPMs). Once included, these measures will be subject to disclosure requirements and will be audited.

This creates several implications:

• Less flexibility to redefine metrics year‑to‑year;
• More coordination is needed between finance, legal, audit and IR; and
• Greater scrutiny from investors around consistency and credibility.

For IR teams, this is an opportunity to strengthen trust. Clear definitions around management-defined performance measures and stable, consistent management-defined performance measures help investors focus on performance drivers rather than accounting adjustments.

Lessons emerging from early implementation work

Organizations already working on IFRS 18 are seeing that it affects more than reporting templates.

There are common lessons that are being encountered by organizations. The most common is that changes to systems and charts of accounts take longer than expected. Another lesson identified when determining management-defined performance measures is that performance metrics used internally may not align with what can be disclosed externally. Organizations further along in their implementation journey have noticed that mock financial statements and ‘dry runs’ uncover investor messaging challenges early.

IR teams that are involved early can help shape how performance changes are described rather than reacting late to investor questions.

What IR teams should be doing now

In 2026, practical steps for IR professionals include:

• Inventory performance measures used across all investor communications;
• Assess consistency between adjusted metrics, strategy narratives and financial results;
• Coordinate early with finance teams on which measures may be in scope as MPMs under IFRS 18; and
• Plan investor education, including transition explanations and visuals that bridge old and new presentations.

These steps can reduce surprises and help maintain confidence during adoption.

IFRS 18 as a communications opportunity

IFRS 18 was developed in response to investor feedback for increased transparency. For IR teams, it provides a chance to simplify performance messaging, improve alignment between narrative and numbers, and reinforce organizational credibility through disciplined and clear disclosures. While the standards will not come into effect until 2028, organizations that engage early will be best positioned to turn an accounting change into an opportunity to strengthen investor understanding, build trust and enhance confidence through clear and consistent communication.

Terry Liu, CPA, is a Partner, and Brian Rajadurai, CPA is a Senior Manager, at KPMG Canada.