Where IAS 1's requirements went after IFRS 18
Which IAS 1 requirements moved to IAS 8 and IFRS 7 when IFRS 18 replaced it, and what preparers should change in references and policy wording.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
For years the basis of preparation note in almost every IFRS set opened with the same words: the statements have been prepared in accordance with IFRS and the requirements of IAS 1. Templates copied it, review checklists cited it, and engagement letters referred to it. When IFRS 18 takes over, that sentence and many like it point to a standard that is no longer in force.
Most commentary on IFRS 18 concentrates on the new profit subtotals. The quieter change is that the requirements preparers relied on in IAS 1 did not vanish; many of them moved house. Knowing where each one now lives saves a lot of hunting when the first IFRS 18 set is drafted.
Replaced, not rewritten
IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1 Presentation of Financial Statements. The IFRS Foundation is clear that the IASB did not reconsider every aspect of IAS 1 when it developed IFRS 18. Its focus was the statement of profit or loss.
What happened to the rest, according to the Foundation, falls into three groups: some IAS 1 paragraphs were retained in IFRS 18, some were moved to IAS 8, and some were moved to IFRS 7 Financial Instruments: Disclosures. The requirement still exists in most cases. Its reference has changed.
On timing, the IFRS Foundation's IFRS 18 page gives the effective date as annual reporting periods beginning on or after 1 January 2027. For a client with a calendar-year end, that is the year ending 31 December 2027; for other year ends, the first period starting on or after that date.
The foundations that moved to IAS 8
The biggest move concerns the ideas every set rests on. When IFRS 18 replaced IAS 1, the IASB moved to IAS 8:
- the concepts of fair presentation and compliance with IFRS Accounting Standards;
- the assessment of whether an entity is a going concern;
- the accrual basis of accounting;
- disclosure of how an entity selects and applies its accounting policies.
To reflect its wider role, the IASB renamed IAS 8 as Basis of Preparation of Financial Statements. The IFRS Foundation's IAS 8 page records the move and the new title, and is the place to check the current text.
One requirement shows why the references matter. Under IAS 1, an entity whose statements comply with IFRS must make an explicit and unreserved statement of that compliance in the notes. The IFRS Foundation's IAS 8 page states that the concepts of fair presentation and compliance were among those moved to IAS 8. The statement of compliance stays essential; the paragraph that a reviewer cites for it changes.
Material accounting policy information
In February 2021 the IASB amended IAS 1 so that entities disclose their material accounting policy information rather than their significant accounting policies. According to the IFRS Foundation's IFRS 18 page, those amendments now sit in paragraph B112 of IFRS 18 and paragraphs 27A-27G of IAS 8.
Two practical points follow:
- The test is unchanged by the move. A firm that already trimmed boilerplate policies under the 2021 amendment does not need to start again. It needs to update where it says the requirement comes from.
- Long policy notes remain a review point. The move is a natural moment to ask, policy by policy, whether each paragraph tells a reader something material about this client.
Updating references across a set
A quick audit of a typical set shows how many places cite IAS 1. A useful sweep, once a client is on IFRS 18:
| Where IAS 1 is usually cited | What to check |
|---|---|
| Basis of preparation note | Compliance statement, fair presentation and accrual basis now point to IAS 8 |
| Going concern paragraph | The assessment now sits in IAS 8 |
| Accounting policies introduction | Material accounting policy information: IAS 8 and IFRS 18 |
| Presentation of the primary statements | IFRS 18 |
| Other IAS 1 disclosure paragraphs the set relies on | Check whether each was retained in IFRS 18 or moved to IAS 8 or IFRS 7 |
| Directors' report, engagement letters, review checklists | Any line that names IAS 1 as the framework for presentation |
The last row is easy to miss. Engagement letters and the firm's own checklists often name the standards, and a new-year letter that still refers to IAS 1 sends the wrong signal to a client and to a reviewer.
How Achekam's Studio treats this wording
Achekam's Studio includes standard accounting policy wording based on IFRS for SMEs, labelled for review before issue, and staff can write their own policies. For a client on full IFRS moving to IFRS 18, the basis of preparation and policy wording that cites IAS 8 and IFRS 18 is text the firm writes or edits itself.
Two other facts shape the job:
- Rolling forward carries the old words. Staff can roll a set forward to the next year, carrying settings, policies, notes and wording and rebuilding every figure from the new trial balance. That is a time-saver, but it means a 2026 set that cites IAS 1 becomes a 2027 draft that still cites IAS 1 until someone edits it. Adjusting entries, typed comparatives and signatures are not carried forward.
- No live standards feed. Achekam does not pull a live feed of standards and regulatory changes; its Standards & Regulatory Updates page shows what its knowledge base records. The firm, not the software, is responsible for noticing that a reference has moved.
A practical routine: after rolling forward each full IFRS client into its first IFRS 18 year, search the draft for "IAS 1" before the set goes to review, and replace each reference with the standard that now holds the requirement.
A short plan for the transition year
- List the clients on full IFRS and the first year each will apply IFRS 18.
- Update the firm's own basis of preparation and compliance paragraphs once, and agree them with the technical partner.
- Re-read policy notes against the material accounting policy test while the references are being changed.
- Update engagement letter templates and review checklists at the same time.
- Keep a short note on the file recording when and how the references were changed.
Accounting policies and notes covers writing policies that earn their place, and rolling statements forward explains what the roll-forward keeps. For the profit-or-loss changes that drew the headlines, see the new IFRS 18 profit subtotals.
Start with one client: roll its set forward, mark every IAS 1 reference, and use that marked-up draft as the firm's guide for the rest.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
