Two new standards take effect on 1 January 2027, and one of them changes every income statement
If your reporting is stable and you want to know what will disturb it, this is the guide to read first. IFRS 18 replaces IAS 1 and prescribes a structure for the income statement that no IFRS reporter currently uses. IFRS 19 lets qualifying subsidiaries apply IFRS recognition and measurement with drastically reduced disclosure, which is written for exactly the situation most Indian subsidiaries of foreign parents are in. Both take effect for annual reporting periods beginning on or after 1 January 2027, and both permit early application.
- Why IFRS 18 is not a presentation standard in the ordinary sense
- Why IFRS 19 may be the most useful standard the IASB has issued for an Indian finance team
- Where sustainability reporting stands, and how far apart the two main regimes have drifted
The income statement gets a required structure
IFRS 18 was issued in April 2024 and takes effect for annual reporting periods beginning on or after 1 January 2027, replacing IAS 1. It leaves recognition and measurement alone. It changes what the primary statements look like, which turns out to be a larger intervention than it sounds, because it changes every comparison anyone has ever made using your reported figures.
Defined categories and subtotals
Income and expenses are classified into defined categories, and specified subtotals are required. Where entities previously chose their own operating profit line, or presented none, there is now a prescribed structure. Comparability across entities improves. Continuity with an entity's own reported history does not.
Management-defined performance measures
Non-standard measures that management uses publicly to communicate performance come inside the audited financial statements, with disclosure of how they are calculated and why they are used. Measures that lived in an investor presentation now have to be defined, reconciled and stand up to audit.
Aggregation and disaggregation
Principles governing how items are grouped and how much detail is given, aimed at both extremes: a line described so generally that it says nothing, and a statement so long that nothing stands out.
It is not settled yet, and that is the practical point. As at August 2026 the IFRS Interpretations Committee had seven separate IFRS 18 application questions out for comment with a deadline of 9 September 2026: assessing specified main business activities for a manufacturer-lessor, the classification of income and expenses from cash and cash equivalents, the classification where an entity's main business activity is providing financing to customers, the labels of subtotals, two questions on management-defined performance measures, and the presentation of operating expenses. A separate exposure draft was expected in the fourth quarter of 2026 on the presentation of taxes or other charges that are not tax expense. Anyone planning an implementation should assume some of these answers will arrive after the project starts.
Full IFRS numbers, drastically fewer disclosures
IFRS 19 was issued in May 2024 and takes effect for annual reporting periods beginning on or after 1 January 2027. It permits an eligible subsidiary to apply IFRS recognition and measurement requirements while giving substantially reduced disclosures. The numbers are unchanged. The volume of the notes is not.
Why this is aimed at your situation
The standard exists for subsidiaries that have no public accountability but whose parent produces consolidated IFRS financial statements. That describes a very large number of Indian entities: privately held, wholly or majority owned by a foreign group, producing a full IFRS reporting pack for consolidation together with a full set of disclosures that essentially nobody reads, because the only user is a parent that already holds the underlying data.
What it does not do
It does not change measurement, so it reduces the reporting work rather than the accounting work. And it is available only to an entity that actually applies IFRS Accounting Standards. An Indian subsidiary's statutory accounts are prepared under Ind AS by force of section 133, so IFRS 19 cannot reduce Indian statutory disclosure at all. That is a general rule, not an entity-specific one.
Where it does bite, and it is worth real money. The separate IFRS reporting package many Indian subsidiaries prepare for a foreign parent. Where that package is itself described as IFRS-compliant, IFRS 19 can cut its disclosure substantially. For a group with several Indian reporting units, that is a genuine saving in preparation and in audit effort, and it is the only realistic use case here.
The Indian statutory equivalent is a separate track and should not be confused with it. ICAI issued the exposure draft of Ind AS 119 in December 2025, proposing an effective date of 1 April 2027. It is not notified. Once it is, it would relieve disclosure in the Ind AS statutory accounts of an eligible Indian subsidiary, which is a different relief on a different set of statements from the one IFRS 19 gives. Until then there is no near-term disclosure relief in Indian statutory filings, and anyone telling you otherwise is describing IFRS 19 as though it reached the statutory accounts.
The rest of the pipeline, as it stood in August 2026
| Project | Stage at August 2026 | Expected |
|---|---|---|
| Provisions, targeted improvements to IAS 37 | Final amendments | First half of 2027 |
| Equity method, a revised IAS 28 rather than discrete amendments | Final amendments | 2027 |
| Financial instruments with characteristics of equity | Final amendments | Second half of 2027 |
| Business combinations, disclosures, goodwill and impairment | Decide project direction | Second half of 2026 |
| Intangible assets, IAS 38 | Decide project direction | October 2026 |
| Post-implementation review of IFRS 16 Leases | Project summary and feedback statement | Fourth quarter of 2026 |
| Post-implementation review of IFRS 9, hedge accounting | Request for information | September 2026 |
| Statement of cash flows and related matters, IAS 7 | Exposure draft | 2027 |
Taken from the IFRS Foundation work plan as published on 18 August 2026. The work plan is updated after each Board and Committee meeting, so treat every date here as an expectation rather than a commitment. Two further items already issued and not yet effective are worth noting alongside these: an amendment on translation to a hyperinflationary presentation currency, issued November 2025 and effective 1 January 2027, and a revised IFRS Practice Statement 1 Management Commentary, issued and effective from 23 June 2025.
Three regimes, all of which retrenched
It is tempting to describe this as the United States walking away while everyone else holds the line. That is not what happened. All three of the major regimes pulled back during 2025 and 2026. What differs is the degree: outright repeal proposed in one, narrowed scope in the others.
The ISSB standards
IFRS S1 and IFRS S2 are issued by the ISSB and adopted jurisdiction by jurisdiction rather than automatically. In December 2025 the ISSB itself eased IFRS S2, permitting Scope 3 Category 15 to be limited to financed emissions and adding jurisdictional relief on measurement methods and global warming potential values, effective 1 January 2027. Work continues: a nature-related disclosures exposure draft was expected in October 2026, alongside work on the SASB Standards, a human capital project, and amendments to the IFRS S2 industry-based guidance expected in 2027.
The United States
The Securities and Exchange Commission's climate-related disclosure rules were adopted in March 2024 and stayed by the Commission itself in April 2024. On 29 May 2026 the Commission proposed rescinding them in their entirety, and the comment period closed on 3 August 2026. The rules are stayed, not rescinded, and those are two different things worth keeping distinct. The best current reading is that adoption is expected but unscheduled: the Commission's entry in the Unified Agenda published on 14 August 2026 shows the proposal and the close of comments but sets no target date for final action, where several of its other items in the same agenda do carry one.
The European Union
The Omnibus package was signed off by the Council in February 2026, cutting the scope of the Corporate Sustainability Reporting Directive to entities above both an employee and a turnover threshold, taking roughly four in five previously in-scope entities out of it altogether, and pushing transposition back to 2028.
A group reporting into more than one of these should not assume that one disclosure exercise satisfies all of them, and should not assume the gap is closing. It is worth noting that the SEC's own proposing release cites the European and ISSB rollbacks in support of rescission. That is an argument the SEC makes, not neutral background.
Positions stated as at 21 August 2026, re-checked on that date against the Commission's own rulemaking pages and press releases. Underlying citations: the rescission proposal is Releases 33-11421 and 34-105572, File S7-2026-19; the 2024 rules are Releases 33-11275 and 34-99678, File S7-10-22, adopted 6 March 2024 and stayed by Release 33-11280 on 4 April 2024. The United States position can change at short notice and should be re-checked before being relied on.
What India requires, which is not the ISSB standards
India has its own regime and it is not a version of IFRS S1 and S2. The Business Responsibility and Sustainability Report is a listed-company disclosure requirement imposed by the Securities and Exchange Board of India under the listing regulations, not an accounting standard, so it sits alongside this page rather than inside it. The short version is below.
Who it applies to, and when assurance bites
Introduced in 2021 and mandatory from the financial year 2022-23 for the top one thousand listed entities by market capitalisation. The assurance requirement on the core indicators phases in by market capitalisation band, and the financial year 2026-27, the current one, is the year the top one thousand come into scope. So this is live now for the whole population rather than a future obligation for most of it.
What changed in 2025, and it is more than a deferral
A March 2025 circular replaced the reasonable assurance requirement with a choice of assessment or assurance from 2024-25, with the provider required to have relevant expertise and no conflict of interest, notably no consulting relationship with the entity. Value chain disclosures were deferred and, more significantly, downgraded from comply-or-explain to voluntary and narrowed to a smaller band of entities, with value chain assurance also deferred and voluntary. Describing that as a deferral alone understates it: the obligation itself changed.
India has not adopted IFRS S1 or IFRS S2, and has not announced a date. The structural gaps are real rather than presentational: the Indian regime is oriented to impact materiality where the ISSB standards are built on financial materiality, Scope 3 is not mandatory where Scope 1 and 2 are, and there is no sector-specific guidance. ICAI's work in this area is on assurance standards rather than reporting standards. There is no Indian equivalent of IFRS S1 or S2, issued or in draft, and any material implying otherwise is wrong.
Summarised deliberately. This is a securities regulation topic rather than an accounting one and it deserves its own treatment rather than a corner of a page about IFRS. Ask us if you need the current thresholds, band-by-band assurance dates and circular references for your own entity.
Where this sits
IFRS Advisory
The overview page, with all five guides listed and the situations each one answers.
Ind AS and IFRS: Where They Differ
Guide 1. The diagnosis: what is actually different between the framework you use and the one you are asked for.
Converting to IFRS
Guide 2. IFRS 1, the transition date, the elections, and the reconciliations a first IFRS set of accounts must disclose.
Revenue, Leases and Financial Instruments
Guide 3. IFRS 15, IFRS 16 and IFRS 9, plus the amendments effective 1 January 2026.
Consolidation, Business Combinations and Foreign Currency
Guide 4. IFRS 3, IFRS 10, IAS 28 and IAS 21.
What Changes Next
Guide 5. IFRS 18 and IFRS 19 from 1 January 2027, and where sustainability reporting has got to.
Send an enquiry
If you want to know what 2027 does to your reporting, the useful exercise is to take your current income statement and redraw it under IFRS 18. That is a short piece of work and it makes the scale of the change concrete. A partner replies within one business day.
This page is general information, not professional advice. IFRS Accounting Standards, the Indian Accounting Standards notified under section 133 of the Companies Act 2013, and the tax law that interacts with both, all change frequently, and how any of it applies depends on your own facts. The Income-tax Act 2025 replaced the 1961 Act with effect from 1 April 2026. Take professional advice before acting on anything on this page. We are happy to be that adviser, but we do not act on a web page, ours or anyone else's, without one.