By 2026, Bahraini firms reporting under IFRS will see familiar figures presented in an entirely new way. With the rollout of IFRS 18 – Presentation and Disclosure in Financial Statements, businesses must prepare now to stay compliant, transparent, and investor-ready.

What Is IFRS 18?

Issued by the International Accounting Standards Board (IASB) in April 2024, IFRS 18 replaces IAS 1 and introduces a more structured and transparent approach to financial reporting.

Key updates include:

• Classification of income and expenses into five categories: Operating, Investing, Financing, Income Taxes, and Discontinued Operations.
• Mandatory subtotals such as Operating Profit and Profit Before Financing and Income Taxes.
• Clearer aggregation and disaggregation requirements for enhanced transparency.
• Inclusion of Management-Defined Performance Measures (MPMs) with full disclosure and reconciliation requirements.

Major Changes You Can Expect

• Restructured income statements with fixed categories and mandatory subtotals.
•  Expanded note disclosures on MPMs and income classification.
• Comparative restatements may be needed for prior periods.
• Adjusted cash flow statements reflecting new classifications.
• Greater audit scrutiny for consistency and accuracy.

Key Considerations for Bahrain Businesses

• Industry-specific impact: Sectors like financial services, real estate, and investment companies may face complex classification issues.
• Local alignment: Ensure compliance with CBB, BIPA, and Bahrain Bourse reporting standards.
• System readiness: Upgrade ERP systems and train finance teams in advance.
• Stakeholder communication: Educate boards, investors, and auditors about the new structure.
• Strategic opportunity: Use IFRS 18 to enhance transparency, investor confidence, and corporate reputation.

Why Work with IFRS Advisors in Bahrain?

Partnering with IFRS experts ensures a smooth and efficient transition. At GSPU CA, our advisors help you:

•  Reassess financial statement structures.
•  Ensure compliance with both IFRS and local regulations.
• Train finance teams for accurate implementation.
•  Prepare audit-ready reports that enhance investor trust.

Conclusion

Though IFRS 18 becomes effective from 1 January 2027, preparation must begin now. Early adoption minimizes risk, strengthens investor confidence, and positions your company for success in the 2025–26 reporting cycle and beyond.

Numerous changes are happening in workplaces. The enormous progress in using technology results in a high degree of automation, transparency and acceleration. In a global business hub where the use of technology is in full momentum, there is no choice, except to adopt the changes for businesses to become successful in this era of constant change. 

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