IFRS 18 and the Future of Financial Performance Reporting: Challenges, Implications, and Roadmap for Implementation

Abstract

The current study examined the introduction of International Financial Reporting Standard 18 (IFRS 18) and its implications for the future of financial performance reporting globally, with a focus on emerging economies, such as Nigeria. IFRS 18 represents a pivotal shift from previous reporting standards by mandating standardized presentation formats. This includes defined subtotals, such as operating profit and requiring disclosures of Management Performance Measures (MPMs). These changes aim to enhance transparency, comparability, and decision-usefulness of financial statements for investors and stakeholders. However, the implementation of IFRS 18 presents considerable challenges, including the need for extensive capacity building among preparers, auditors, and regulators, as well as the integration of new reporting technologies and systems. This study explored the conceptual foundations of IFRS 18 within accounting theory. Moreover, it also reviewed the practical challenges faced by firms and analysed the broader implications for corporate governance and investor confidence. Comparative insights from jurisdictions with advanced IFRS adoption provided valuable lessons for Nigeria and similar emerging markets. The study further proposed a roadmap for effective implementation, emphasizing regulatory support, professional training, and stakeholder engagement as critical success factors. Ultimately, IFRS 18 offered an opportunity to elevate financial reporting quality and foster sustainable economic development through improved corporate accountability and transparency. This article contributed to scholarly discourse by linking theoretical perspectives with practical solutions to facilitate the transition to IFRS 18.