Comprehensive Financial Reporting

IFRS 18 IS HERE: USHERING A NEW ERA IN FINANCIAL STATEMENT PRESENTATION Starting 1 January 2027 (early adoption permitted), IFRS 18 will officially replace IAS 1 – Presentation of Financial Statements, marking a major milestone in the evolution of financial reporting. As a Finance Team Lead with deep hands-on experience in IFRS and international accounting standards, I’ve had the opportunity to dive into this transformative change — and it’s clear: this isn’t just about compliance. It’s about how we tell the financial story of our organizations to investors, regulators, and stakeholders. What’s Changing? At the heart of IFRS 18 is a more structured and standardized Statement of Profit or Loss, now categorized into three clearly defined sections: 1️⃣ Operating – Core business activities (e.g., revenue, cost of sales, admin expenses), now culminating in a mandatory “Operating Profit” subtotal. 2️⃣ Investing – Captures returns from associates and investments, helping users understand value creation beyond operations. 3️⃣ Financing – Reflects interest expense, FX losses, and the cost of capital, separated from business performance. Another key highlight: The introduction of “Profit Before Financing and Income Tax” – a new subtotal that gives clearer insight into core performance. Gone are the gray areas and inconsistent reporting practices. Now, CFOs and finance leaders must align internal systems, reporting structures, and the chart of accounts to reflect this new classification model. Practical Implications 1) Interest Expense on Lease Liabilities 🔹 Previously: Reported inconsistently under finance costs 🔹 Now: Must be classified under Financing 2) Investment in Associates 🔹 Previously: Placed variably across statements 🔹 Now: Clearly under Investing Revenue & Cost of Sales 🔹 Remain under Operating Why This Matters for CFOs & Finance Teams: ✅ Clarity – Standardization across industries improves comparability ✅ Discipline – Enhanced transparency for Management-Defined Performance Measures (MPMs) ✅ Confidence – Transparent reporting builds investor trust ✅ Future-Readiness – Aligning systems now avoids disruption later The time to prepare is now. Let’s not view IFRS 18 as just a new standard — but as a strategic opportunity to elevate financial storytelling with structure, consistency, and confidence. 👉 IFRS 18 is not just a compliance requirement — it's a communication tool for value. #IFRS18 #FinanceLeadership #FinancialReporting #AccountingStandards #IASB #FinanceTeamLead #IFRS #TransparencyInFinance #MPMs #OperatingProfit #InvestingActivities #FinancingActivities #FinancialStorytelling #CFOInsights #FutureOfFinance #ChartOfAccounts #ERPTransformation

Confusing financial reporting with casual bookkeeping? For one of my clients, it led to a $750K tax penalty that nearly bankrupted their promising startup. It started when they treated quarterly financial statements as optional paperwork rather than critical business intelligence. Their inexperienced team tracked day-to-day expenses meticulously. But while transactions were recorded, the company missed serious compliance issues and failed to recognize dangerous cash flow patterns. Then we helped them, here's how:  - Established clear reporting calendars with accountability  - Built comparative analysis tools for industry benchmarking.  - Developed dashboard systems for real-time financial visibility - Created executive summaries that highlighted critical metrics  - Implemented standardized reporting frameworks (GAAP/IFRS) After 6 months they: → Identified unnecessary expenses  → Reduced decision-making time by 67%  → Avoided $430K in additional compliance penalties Casual bookkeeping records transactions whereas proper financial reporting reveals opportunities. Neglecting structured financial reporting doesn't just risk penalties, it keeps you blind to the true health of your business. #bookkeeping  #finance  #financialreporting 

Month-End Activities for Financial Statement Preparation Month-end closing activities are essential for producing accurate and reliable financial statements. A comprehensive breakdown of the steps: 1. Pre-Month-End Preparations Review Open Transactions: Ensure all revenue, expense, and asset transactions are recorded. Set Deadlines: Communicate closing deadlines to all relevant departments. 2. Reconcile Accounts Reconciliation is crucial to ensure the accuracy of financial data. Bank Reconciliations: Match all bank account balances to the general ledger. Subledger Reconciliations: Verify AR, AP, and inventory balances against respective subledgers. Intercompany Reconciliations: Ensure transactions between entities are matched and recorded correctly. 3. Record Accruals and Adjustments Accurate financial reporting requires capturing all relevant expenses and revenues. Accrued Expenses: Record any incurred but unpaid expenses (e.g., salaries, utilities). Deferred Revenue/Expenses: Adjust for revenue or expenses recognized but not yet due. Prepaid Expenses: Allocate monthly portions of prepaid items (e.g., insurance). 4. Depreciation and Amortization Fixed Assets: Post depreciation journal entries based on asset schedules. Intangible Assets: Record amortization expenses as per the company’s accounting policy. 5. Revenue Recognition Review and recognize revenue in compliance with applicable accounting standards (e.g., ASC 606 or Ind AS 115). Ensure revenue is correctly matched with expenses (matching principle). 6. Variance Analysis Compare actual results against budgets or forecasts. Investigate and document significant variances for review by management. 7. Inventory Valuation Perform inventory counts (if applicable). Adjust for shrinkage, obsolescence, or write-offs. 8. Consolidate Financial Data Consolidate data from all business units or entities. Eliminate intercompany transactions during consolidation. 9. Review General Ledger (GL) Accounts Trial Balance Check: Ensure the trial balance is balanced. Adjusting Entries: Post-correcting entries for identified errors. GL Reconciliation: Match balances with supporting documentation. 10. Tax-Related Adjustments GST/VAT Reconciliation: Match tax filings with the GL. Deferred Taxes: Calculate and record deferred tax assets/liabilities. 11. Prepare Financial Statements Income Statement: Summarize revenues and expenses to calculate net income. Balance Sheet: Ensure all assets, liabilities, and equity are accurately recorded. Cash Flow Statement: Compile operating, investing, and financing activities. 12. Final Review and Approvals Management Review: Provide draft financial statements for managerial review. Audit Trail: Ensure all entries have supporting documentation. Approval: Obtain necessary approvals from department heads or senior management. #rtr #accounting #finance #brs

IFRS 18 is Here: A New Era for Financial Statement Presentation A significant shift in financial reporting is on the horizon. The International Accounting Standards Board (IASB) has issued IFRS 18, a new standard for the presentation and disclosure in financial statements, which will officially replace the long-standing IAS 1. This marks a pivotal moment for preparers and users of financial statements, aiming to enhance comparability and transparency in financial reporting worldwide. Key Changes to Expect: IFRS 18 introduces several key changes designed to improve the structure and content of the statement of profit or loss. The most notable changes include: Defined Categories in the Statement of Profit or Loss: IFRS 18 mandates the classification of income and expenses into three main categories: operating, investing, and financing. This structured approach is intended to provide a more consistent and comparable view of a company's performance. New Required Subtotals: The new standard will require the presentation of two key subtotals in the statement of profit or loss: Operating profit or loss Profit or loss before financing and income tax These defined subtotals will offer a clearer picture of a company's core operational performance. Enhanced Disclosures for Management-Defined Performance Measures (MPMs): Companies will now be required to provide more transparent disclosures about any non-GAAP or alternative performance measures they use. This includes a reconciliation to the nearest IFRS-defined total, bringing greater clarity and discipline to the use of such metrics. Improved Aggregation and Disaggregation: IFRS 18 provides more detailed guidance on how to group and separate information in the financial statements, aiming to strike a better balance between providing sufficient detail without overwhelming users with immaterial information. What This Means for Businesses and Investors: The implementation of IFRS 18 will require companies to review and potentially revise their financial reporting systems and processes to align with the new presentation requirements. This may involve changes to chart of accounts, internal controls, and financial statement templates. For investors and other users of financial statements, IFRS 18 is expected to bring significant benefits. The standardized presentation and enhanced disclosures will facilitate more meaningful analysis and comparison of companies across different industries and jurisdictions. The clearer distinction between operating, investing, and financing activities will provide deeper insights into a company's value creation process. The transition to IFRS 18 presents both a challenge and an opportunity. By embracing these changes, companies can enhance their financial storytelling and provide stakeholders with a more transparent and coherent view of their performance in the new era of financial reporting. #IFRS18 #IFRS #IAS1

Consolidated reporting in family offices is often seen as a single software fix. The truth is, it demands a sophisticated blend of technology and human expertise to transform raw data into meaningful insights. Family offices oversee diverse assets—real estate, art, private equity, and more—each with unique reporting challenges. Many platforms struggle to handle illiquid investments or accurately calculate unrealized gains. Double-entry bookkeeping, a centuries-old method, often falls short in capturing the complexities of modern portfolios, especially alternative investments. Relying solely on software results in incomplete reporting, missing critical nuances without proper asset documentation and governance. Unrealized gains in private funds, lacking clear market prices, further complicate performance tracking, creating a gap between expectation and reality that frustrates teams and stakeholders. The solution lies in a comprehensive reporting system, combining robust software with a dedicated team to reconcile data and provide context. All assets should be documented in governance policies like Investment Policy Statements. Regular qualitative and quantitative analysis, through weekly, monthly, and quarterly reports, ensures families grasp their portfolio’s true value. This approach empowers informed decision-making, giving families clarity on their wealth. Follow #TFOA. Repost to help others. https://lnkd.in/gjJvt7-U