Preparing for IFRS 18 in NetSuite: What Finance Teams Need to Know

For NetSuite users, preparation should begin now. IFRS 18 applies to reporting periods beginning on or after January 1, 2027, and comparative information for prior periods must also follow the new presentation requirements. To help organizations prepare, the NetSuite 2026.2 release includes new reporting functionality designed to support IFRS 18 reporting.

New IFRS 18 Reporting Functionality in NetSuite

The NetSuite 2026.2 release introduces a new IFRS 18 income statement layout as part of its accounting updates. This format helps IFRS reporters begin aligning financial statement presentation with IFRS 18 requirements, including the categorization of income and expenses and the presentation of new mandatory subtotals such as operating profit and profit before financing and income taxes.

For finance teams, this provides a valuable starting point for evaluating how existing account groupings, financial statement rows, and reporting hierarchies may need to be remapped or refined before IFRS 18 takes effect.

Organizations should not assume the new layout provides a complete out-of-the-box compliance solution. Instead, they should evaluate it against their chart of accounts, segment structure, Multi-Book configuration, and management reporting framework to determine what additional configuration, mapping, and disclosure support may be necessary.

A More Structured Income Statement

One of the most visible IFRS 18 changes is the introduction of standardized categories and subtotals within the statement of profit or loss. Under IAS 1, organizations had greater flexibility in how they presented profit and loss statements, which often resulted in inconsistent subtotals across companies.

Example: IAS 1 vs. IFRS 18 Presentation

Under IAS 1 (current guidance), a company might present:

• Revenue
• Cost of Sales
• Gross Profit
• Selling & Administrative Expenses
• Interest Income
• Interest Expense
• Profit Before Tax

Under IFRS 18, the same company must classify items into defined categories such as Operating, Investing, and Financing and present two mandatory subtotals:

• Operating Profit
• Profit Before Financing and Income Taxes

For example, interest income that may have previously appeared within operating results could now fall within the investing category, changing how stakeholders evaluate business performance.

Expanded Disclosure Requirements for Management Performance Measures

Another significant IFRS 18 change focuses on Management Performance Measures (MPMs).

Organizations must provide enhanced disclosures for management-defined performance measures by:

• Explaining what each measure represents
• Disclosing why management uses the measure
• Reconciling each measure back to the most directly comparable IFRS subtotal

These requirements aim to improve transparency and help investors better understand the metrics management uses to assess performance.

Six Steps NetSuite Users Should Take Now

1. Review your chart of accounts and financial statement mappings. Ensure account structures, captions, and underlying trial balance mappings align with the new operating, investing, and financing categories.
2. Assess comparative reporting impacts. Remember that 2026 comparative-period information will also require IFRS 18 presentation.
3. Evaluate Multi-Book Accounting and reporting configurations. Determine whether existing configurations can support IFRS 18 reporting without significant manual workarounds.
4. Identify Management Performance Measures (MPMs). Review the measures used in board, investor, and management reporting. Determine whether NetSuite currently captures the level of detail needed to support required disclosures and reconciliations.
5. Update reports, dashboards, and analytics. Modify financial statements and reporting tools to accommodate new subtotals and presentation requirements. Use the new 2026.2 income statement layout as a foundation for classifying accounts and dimensions under the IFRS 18 framework.
6. Develop an IFRS 18 readiness roadmap. Include system enhancements, accounting policy updates, testing, training, and change management activities to support a smooth transition.

Start Preparing Before the Deadline

Organizations that begin preparing now will be better positioned to meet compliance requirements while minimizing disruption to reporting processes.

For NetSuite users, IFRS 18 represents more than a compliance obligation. It offers an opportunity to improve reporting consistency, strengthen transparency, and enhance financial governance across the organization.