Applying IFRS 18 (Presentation and Disclosure) in Saudi joint-stock companies
IFRS 18 replaces IAS 1 and changes the income statement and disclosures. We prepare the impact study, restate the comparatives, and build the disclosures and the board and audit-committee briefing, with the partner on the file.
The short answer
IFRS 18 Presentation and Disclosure in Financial Statements applies to annual periods beginning on or after 1 January 2027 and replaces IAS 1; SOCPA endorsed it for use in Saudi Arabia on 26 December 2024. The Capital Market Authority requires listed joint-stock companies to disclose a preliminary assessment of its expected impact in statements for periods beginning on or after 1 April 2026. Entry Post prepares the impact study, the new presentation and the disclosures.
Reviewed by Noura Alderaan, SOCPA Fellow (No. 1379) ·
Official sources: Capital Market Authority: applying IFRS 18 to listed joint-stock companies (30 June 2026, Arabic) ↗IFRS Foundation: IFRS 18 Presentation and Disclosure in Financial Statements ↗IFRS Foundation: use of IFRS Standards in Saudi Arabia ↗IFRS Foundation: IFRS for SMEs Accounting Standard ↗
What changes in your financial statements
- Two defined subtotals in profit or loss: operating profit, and profit before financing and income taxes.
- Income and expenses are classified into categories, including operating, investing and financing.
- A new disclosure of management-defined performance measures: the subtotals management uses in public communications.
- New principles for aggregation and disaggregation, setting when items are shown separately in the statements or the notes.
- The standard applies retrospectively, so you will need the comparative year on the new basis.
Who applies it
- Joint-stock companies listed on the Saudi Exchange: mandatory for periods beginning on or after 1 January 2027, with a preliminary impact disclosure in statements for periods beginning on or after 1 April 2026.
- Other publicly accountable entities, which must use full IFRS as endorsed in Saudi Arabia.
- Unlisted joint-stock companies and LLCs that prepare their statements under full IFRS.
- Companies using the IFRS for SMEs Standard follow that standard instead; its new edition also takes effect on 1 January 2027. We confirm which framework applies to you before starting.
Timeline
- 12026Listed companies disclose a preliminary assessment of the expected impact in interim and annual statements for periods beginning on or after 1 April 2026. During 2026 they may also announce IFRS 18 statements on the Tadawul website, alongside their statutory statements under IAS 1.
- 21 January 2027Mandatory application for annual periods beginning on or after this date, retrospectively.
- 3Financial year 2027The first annual statements under IFRS 18 for calendar-year companies, with 2026 figures presented on the new basis.
Our work plan
- 1Gap analysisWe review your current income statement, chart of accounts and disclosures against the standard.
- 2Impact studyWhat will change in presentation, subtotals and disclosures, and what you need for the preliminary impact disclosure.
- 32026 figures restatedA pro-forma on the new basis, so the comparatives are ready.
- 4Disclosure templatesMapping the chart of accounts to the new categories, and the management-defined performance measures note.
- 5Board and audit-committee briefingOn the expected impact, the decisions needed and progress tracking.
- 6Support during the auditWe answer your auditor’s questions and provide the supporting working papers.
Most IFRS 18 impact studies are completed in 4–6 weeks.
Audit and independence
We also audit the financial statements of joint-stock companies. Because independence rules stop an auditor from preparing what it audits, we agree the role with you at the start:
- If another firm is your auditor: we work with your finance team on IFRS 18, alongside your auditor.
- If we are your auditor: our IFRS 18 role is limited to what independence rules allow, and preparing the statements stays with management.
What we need from you to start
- Your latest audited annual statements, and latest interim statements if any.
- The trial balance and chart of accounts.
- Any performance measures you publish to shareholders or in investor presentations.
- Your year end and the accounting framework you apply.
Start with the impact study
Tell us about your company and its year end, and the partner will reply with the scope.
Frequently asked questions
When does IFRS 18 take effect in Saudi Arabia?
For annual periods beginning on or after 1 January 2027, with earlier application permitted. SOCPA endorsed it for use in Saudi Arabia on 26 December 2024.
Do listed companies need to do anything before 2027?
Yes. The Capital Market Authority announced that listed joint-stock companies must disclose a preliminary assessment of the expected impact of IFRS 18 in interim and annual statements for periods beginning on or after 1 April 2026, and may announce IFRS 18 statements on the Tadawul website during 2026 alongside their statutory statements.
What changes in the income statement?
IFRS 18 adds two defined subtotals, operating profit and profit before financing and income taxes, classifies income and expenses into categories, requires disclosure of management-defined performance measures and sets new aggregation and disaggregation principles.
Does IFRS 18 apply to unlisted joint-stock companies?
Yes, if they report under full IFRS as endorsed in Saudi Arabia. A company using the IFRS for SMEs Standard follows the new edition of that standard instead. We confirm which framework applies before starting.
Do you also audit joint-stock companies?
Yes. We keep the roles separate: if we are your auditor, we do not prepare the statements we audit, and our IFRS 18 work stays within what independence rules allow.
How long does an IFRS 18 impact study take?
Most are completed in 4–6 weeks, depending on the size of the company, the number of segments and how complete the documents are.
Official sources
- Capital Market Authority: applying IFRS 18 to listed joint-stock companies (30 June 2026, Arabic)
- IFRS Foundation: IFRS 18 Presentation and Disclosure in Financial Statements
- IFRS Foundation: use of IFRS Standards in Saudi Arabia
- IFRS Foundation: IFRS for SMEs Accounting Standard
General information based on the official sources listed. It is not professional advice for your company.