IFRS 18 is gradually changing how treasury-related results are presented, interpreted and, ultimately, judged within organisations. And that shift is not always fully recognised – particularly when implementation is approached as a purely technical exercise.
In many organisations, IFRS 18 is likely to increase the visibility of these treasury-related elements
At its core, IFRS 18 introduces a more defined structure to the income statement, including categorisation into operating, investing and financing activities, as well as increased transparency around management-defined performance measures.
While these changes are intended to improve comparability and clarity, they also influence how financial performance is perceived. This is especially relevant for treasury, where outcomes – such as foreign exchange movements, interest results and hedging impacts – have historically been interpreted within a broader financial context.
In many organisations, IFRS 18 is likely to increase the visibility of these treasury-related elements. Not because the underlying economics have changed, but because their presentation – and therefore their interpretation – has.
What I observe in practice is that IFRS 18 implementation often begins within accounting or reporting teams, focusing on classification, mapping and disclosure requirements.
While this is a logical starting point, treasury implications are not always fully considered in the early stages. As a result, classifications may be technically compliant, but not fully aligned with how treasury activities are understood or managed internally.
This may not always be immediately visible during implementation, but often becomes more apparent when results are reviewed, compared and discussed.
Changes in classification can affect commonly used indicators such as operating profit or other internally defined KPIs
One of the less visible, but potentially more impactful, consequences of IFRS 18 lies in its interaction with performance metrics.
Changes in classification can affect commonly used indicators such as operating profit or other internally defined KPIs. In turn, this may influence how treasury-related results are assessed, compared and discussed.
This does not necessarily mean that treasury performance itself changes. However, the way it is presented may lead to different interpretations, particularly for stakeholders who rely on structured financial reporting rather than underlying economic analysis.
This raises an important question for treasurers: are current KPIs still aligned with how performance will be presented under
With the 2027 effective date approaching, many organisations have already begun their IFRS 18 implementation journey. However, early progress does not necessarily mean the work is complete.
Initial classifications are often made under time pressure and based on evolving interpretations. Early implementation can create a sense of progress – but may also mask areas that require a second look.
As implementation progresses, and particularly as comparative information comes into scope, the need for consistency becomes more apparent. What appeared reasonable in isolation may require reconsideration when viewed across periods, entities or reporting layers.
In addition, implementation is often accounting-driven in the early stages, with treasury involvement increasing only later. This can create gaps between technical classification and practical understanding.
For organisations that have already started, this is therefore a good moment to step back and reassess key areas including classification consistency, KPI alignment and clarity of narrative.
Much of the current focus around IFRS 18 is on systems, data and reporting structures. While these are important, they are only part of the picture.
IFRS 18 is, to a significant extent, a judgement-driven standard. It requires interpretation, alignment across functions, and clear communication.
In practice, successful implementation often depends on the ability to connect different perspectives across accounting, treasury and FP&A. Without this connection, there is a risk that IFRS 18 improves consistency in presentation, but introduces new challenges in interpretation.
Against this backdrop, there are a few practical steps treasurers can take:
The extent of IFRS 18’s impact will vary between organisations. However, what is becoming increasingly clear is that this is not just a compliance exercise. IFRS 18 may not change treasury economics – but it will change how treasury is seen.
The question is no longer whether organisations can implement the standard, but whether they are prepared for how it reshapes the interpretation of performance. And for treasurers, that raises a final question: are you comfortable with how your results will be understood?
Jing Dong FCCA is a finance and treasury professional based in the Netherlands
