Preparing for IFRS 18: How Rate-Regulated Industries Can Navigate the Coming Change

By Cedar RecruitmentJanuary 26, 2026News

From 1 January 2027, IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1, marking a significant shift in the way organisations, particularly those in rate-regulated sectors, must structure and disclose financial information.

For industries where pricing is controlled by regulators (e.g., utilities, energy, public transport), the changes to financial reporting mandated by IRFS 18 will require new thinking, new talent, and renewed focus on compliance and communication.

In tandem, IFRS 14 Regulatory Deferral Accounts is set to be withdrawn when the IASB finalises its comprehensive standard on Rate-regulated Activities, presenting a further challenge for first-time IFRS adopters in regulated markets.

Here’s what affected companies need to know, and how to prepare.

Jump To

What Is IFRS 18 and Why Is It Being Introduced?
What’s Changing From IAS 1 to IFRS 18
What’s Next for IFRS 14 and Rate-Regulated Activities
Why IFRS Standard Changes Drive Demand for Specialist Talent
Strategic Steps to Prepare Your Teams for IFRS 18

What Is IFRS 18 and Why Is It Being Introduced?

The International Accounting Standards Board (IASB) is launching IFRS 18 to improve transparency and comparability across financial statements globally. The goal is to help investors better understand an entity’s financial performance by standardising how income statements are presented and explained.

According to the IASB, inconsistencies in how companies classify and aggregate income and expense items under IAS 1 were making it harder for stakeholders to compare performance across companies and sectors. IFRS 18 addresses this by introducing:

More structured primary financial statements
New defined subtotals in the income statement
Enhanced disclosure on management performance measures (MPMs)
Clear guidance on classification of income and expenses

Effective from 1 January 2027, IFRS 18 applies to all companies using IFRS but the impact will be particularly significant for organisations in rate-regulated sectors, where performance is closely tied to regulatory mechanisms and pricing frameworks.

What’s Changing From IAS 1 to IFRS 18

Changes aim to eliminate non-standard KPIs and restore clarity to financial reporting, which is especially relevant for investors and regulators evaluating capital-intensive, infrastructure-heavy industries like energy and transport.

Key differences between IFRS 18 and IAS 1 include:

New required subtotals such as “operating profit”, “profit before financing and income taxes”, and “profit before tax”
Clearer definitions for operating, investing, and financing categories
Stricter rules on aggregation and labelling of income and expenses
MPMs must now be disclosed in a single note, reconciled to IFRS figures, and explained in terms of their purpose and calculation

What’s Next for IFRS 14 and Rate-Regulated Activities

IFRS 14, currently a temporary solution, allows first-time IFRS adopters in rate-regulated markets to continue recognising regulatory deferral accounts. But it’s on borrowed time. Once the IASB finalises its comprehensive Rate-regulated Activities standard, IFRS 14 will be withdrawn, replacing a transitional patch with a long-term framework.

This presents both risk and opportunity for organisations. Risk, because companies will need to unwind or restate legacy treatment of regulatory balances, and opportunity, because standardisation can enhance comparability and reduce investor uncertainty. Industries that will feel the most pressure from changes here include utilities, public transportation, and energy, especially where pricing is government influenced.

Why IFRS Standard Changes Drive Demand for Specialist Talent

When IFRS 16 was introduced, it triggered a wave of recruitment across finance functions, particularly in reporting, systems, and compliance. We expect IFRS 18 and changes to IFRS 14 to follow a similar pattern.

Rate-regulated businesses will likely need:

IFRS technical accountants with experience implementing new standards
Financial reporting leads to redesign income statements and disclosures
Project managers to coordinate compliance and systems updates
Systems analysts to reconfigure ERP or consolidation platforms
Transformation leads to support audit-readiness and stakeholder engagement

The competition for this talent will be fierce, and for many organisations, interim finance professionals or specialist project hires will be the most effective solution to manage transition risk.

Strategic Steps to Prepare Your Teams for IFRS 18

Transitioning to IFRS 18 requires the right people, processes, and systems in place. Here’s how to prepare:

Start With a Diagnostic Assessment

Understand where your current reporting and disclosures diverge from IFRS 18. Benchmark internal practices against IASB guidance to scope your gaps.

Hiring an interim IFRS specialist or financial reporting consultant can accelerate your readiness review. These professionals bring experience from similar transitions and can provide a clear roadmap for compliance.

Build a Cross-Functional Taskforce

Involve finance, reporting, systems, internal audit, and investor relations early. Changes to MPM disclosures and operating profit definitions affect not just finance, but how performance is communicated externally.

Securing talent in areas like investor relations, systems integration, or internal audit can ensure your taskforce has the depth of expertise required, without overburdening existing teams.

Assess and Upgrade Your ERP and Reporting Systems

Ensure your systems can support new subtotal structures and capture the required data for management performance measures.

Many businesses will need ERP analysts, systems accountants, or finance transformation leads to reconfigure reporting tools and build functionality that aligns with IFRS 18.

Plan for Education and Change Management

Educate your executive team, board, and auditors on what’s changing and why. Prepare internal teams for new reporting cycles well ahead of 2027.

Bringing in a Change Manager or L&D specialist with regulatory experience can help design and deliver tailored training programmes that build buy-in and capability across the business.

Secure Specialist Support Early

Whether via interim finance professionals, technical advisors, or project-based consultants, begin engaging talent now. Waiting until late 2026 will only increase competition and cost.

Partnering with a recruitment firm like Cedar allows you to access pre-vetted IFRS experts quickly, whether you need a short-term technical accountant or a long-term finance leader to guide the entire transition.

How Cedar Can Help

At Cedar, we specialise in connecting regulated businesses with the finance and transformation professionals needed to manage complex regulatory transitions. We’ve supported clients across the public and private sectors, delivering interim and permanent solutions tailored to IFRS, ESG, and transformation challenges.

Whether you need a short-term specialist to lead your IFRS 18 implementation or a longer-term partner to rebuild your reporting function, we’re here to help.

Contact Cedar today to discuss your talent strategy and secure the expertise you need to stay compliant, competitive, and confident heading into 2027.

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Preparing for IFRS 18: How Rate-Regulated Industries Can Navigate the Coming Change

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