Introduction
On September 19, 2024, the Accounting Standards Board officially approved the International Financial Reporting Standard (IFRS) 18 in Peru, which introduces significant amendments in the submission and disclosure of financial statements. This standard, issued by the International Accounting Standards Board (IASB), intends to improve the comparability and transparency of information on the performance of entities.
IFRS 18: Functions and Concerned Entities
IFRS 18 establishes the requirements for filing and disclosing information in financial statements, applicable to all private sector entities in Peru, with some exceptions. According to Resolution No. 003-2024-EF/30 of the Ministry of Economy and Finance, this standard also extends to public companies where applicable, ensuring the homogeneity and comparability of the financial data presented.
Main Amendments Introduced by IFRS 18
The main amendments introduced by IFRS 18 include the following:
- A new structure of the income statement, which consists of categories (operating, investing, financing, income taxes, and discontinued operations) and subtotals (“operating profit or loss,” “profit or loss for the year,” and “profit or loss before financing and income taxes”).
- Information related to the income statement: (i) Performance measures defined by management and (ii) Disclosure of expenses by nature for entities that present the income statement by function.
- New forms of grouping (affects all primary financial statements and notes).
The main amendments in IFRS 18 include clarity in classifying assets and liabilities, consistency in filing income and expenses, and the obligation to disaggregate relevant information. These amendments ensure that financial statements provide a truthful and fair view of the economic situation of companies, facilitating decision-making by investors and regulators.
Impact on the Peruvian Financial Environment
Implementing the IFRS 18 in Peru aligns local accounting with global standards. By requiring greater clarity in financial reporting, this standard boosts the confidence of both local and international investors, contributing to the country’s economic growth.
Impact on the Peruvian Financial Environment
IFRS 18 is effective as of January 1, 2027, but requires retroactive application since the comparative information to be filed must also be prepared under this standard.
Conclusion
Implementing IFRS 18 benefits Peruvian companies intending to improve their financial filing.
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Source: Resolution No. 003-2024-EF/30 - Peruvian Ministry of Economy and Finance (6035675-niif-18) (6035675-rcnc003_2024ef30).
