IFRS 18 Malta: 2027 Financial Reporting Changes and Business Preparation Guide

IFRS 18 introduces major changes to financial reporting in Malta, requiring businesses to adapt their income statement presentation, systems, and KPIs ahead of 2027.

A major change in financial reporting is coming

From 1 January 2027, IFRS 18 will replace IAS 1 and significantly reshape how companies present financial information. This is the most substantial update to presentation requirements in over two decades, replacing the 2007 revision of IAS 1.

The new standard introduces defined categories for income and expenses, new mandatory subtotals including operating profit, and enhanced transparency around management-defined performance measures.

The EU is expected to complete endorsement of IFRS 18 in early 2026. The standard is already being incorporated into the 2025 ESEF taxonomy, signalling that listed entities across the EU, including Malta, should already be preparing.

Why this matters for Maltese organisations

IFRS 18 reorganises the income statement by requiring all income and expenses to be classified into three categories: operating, investing, and financing.

These categories form the basis for new mandatory subtotals, including operating profit or loss and profit or loss before financing and income taxes.

Although only three categories are defined, the income statement must still separately present income tax and discontinued operations. These remain required components of the statement but are not classification categories under IFRS 18.

For Maltese finance teams, this requires a reassessment of how transactions are analysed, classified, and presented. Management-defined performance measures will also need to be included directly within the audited financial statements, increasing transparency and comparability.

Because IFRS 18 requires comparative information for 2026, organisations should begin preparation during the 2026 financial year to ensure a smooth transition.

Preparing during 2026

Practical steps Maltese businesses can take now include:

Review reporting structures

Companies should assess current income statement formats, KPIs, and reporting packs. Many will require adjustments to align with IFRS 18 categories and subtotals.

Update systems and internal processes

Accounting systems may need revised mappings or updates to chart of accounts structures to support the new classification requirements.

Train and brief finance teams

Finance teams will need a clear understanding of the new presentation rules to ensure accurate reporting for both 2026 comparatives and 2027 financial statements.

A smooth transition starts early

While 2027 may feel distant, IFRS 18 will influence income statement design, KPIs, systems, and investor communications. Early preparation during 2026 will help Maltese organisations transition confidently and avoid last-minute operational pressure.

How RSM Malta can support your transition

IFRS 18 implementation requires more than technical accounting updates. It involves changes to reporting structures, systems alignment, KPI design, and internal controls.

RSM Malta supports organisations in navigating this transition through practical implementation guidance, finance function readiness assessments, and reporting redesign. Our specialists help ensure compliance while maintaining clarity, consistency, and decision-useful reporting.

To discuss how IFRS 18 will impact your organisation and how to prepare effectively, contact RSM Malta today.
 

Article written by Rosemarie Trabuco – Lead senior, Outsourcing