Data models designed for better financial analysis

Introduction

In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements in replacement of IAS 1. IFRS 18 sets out overall requirements for the presentation and disclosure in financial statements.
IFRS 18 is effective from 1 January 2027 and applied retrospectively. Early adoption is permitted.

Why it matters

IFRS 18 changes how companies communicate their financial performance.

Financial performance is structured across Operating, Investing and Financing categories.
For data users and analysts, this improves the clarity of performance drivers but only if the underlying data are consistently structured for analysis.
As a data provider, our models are designed to be IFRS 18-ready and analysis-ready, enabling clearer insight generation across financial datasets.

Key changes

New presentation focusing on Income Statement

Income and expenses are classified into 5 categories:
- Operating
- Investing
- Financing
- Income taxes
- Discontinued operations
New defined sub-totals:
- Operating profit
- Profit before financing and income taxes

IFRS 18 marks a step toward greater consistency of income and expense presentation, setting a more credible foundation for comparative financial analysis and performance tracking.

Illustrative Income Statement

Other consideration

To classify income and expenses into the categories of operating, investing and financing, entities need to assess if they have specified main business activities such as investing in assets (eg: investment companies, investment property companies, insurers) or providing financing to customers (eg: banks, lessors).
Income and expenses from the derecognition of assets and liabilities are classified in the same category as income and expenses from those assets and liabilities immediately before the derecognition. Eg: Income/expenses from derecognition of fixed assets are generally classified in the operating category.
Foreign exchange differences are included in the Income Statement in the same category as the income and expenses from the items that gave rise to the foreign exchange differences. Eg: foreign exchange differences arising from accounts receivable are classified in the operating category.
Gains/losses on derivatives are classified in relevant category based on the purposes of using derivatives and hedging designation.

Categories	Illustrative Income Statement
Operating Income/expenses from main activities and any income/expenses not classified as other remaining categories	Revenue
	Cost of sales
	Gross profit
	Other operating income
	Selling expenses
	General and administrative expenses
	Other operating expenses
	Operating profit
Investing Income/expenses from investments independently of main activities	Share of profit or loss from associates and joint ventures
	Interest income from cash and cash equivalents
	Profit or loss before financing and income taxes
Financing Income/expenses relating to obtaining finance for the entity or interest from other liabilities	Interest expense on borrowings and lease liabilities
	Interest expense on pension liabilities
	Profit or loss before income taxes
Income taxes In accordance with IAS 12	Income tax expense benefit
Income taxes In accordance with IAS 12	Profit or loss from continuing operations
Discontinued operations In accordance with IFRS 5	Profit or loss from discontinued operations
Discontinued operations In accordance with IFRS 5	Profit or loss

New Categories New Sub-totals

What it means for data analysis

Cleaner analytical segmentation

Analysts can now evaluate performance across:

core operations – Operating
investment returns – Investing
financing impacts – Financing

This improves clarity in driver-based analysis.

Key data item reclassification in Income Statement

Under IFRS 18, operating category is considered as a “default” or “residual” category (including volatile or non-recurring items). The nature and purpose of assets/liabilities is a key consideration in Income Statement item classification. Below are some examples for items that require reclassification under IFRS 18 in a company without specified main business activities.

Illustrative item reclassification
Income/expense item	Category
Interest income	Investing
Interest expense	Financing
Dividend income	Investing
Rental income from investment properties	Investing
Foreign exchange differences	Operating / Investing / Financing
Fair value gains/losses	Operating / Investing / Financing

Comparative analysis and restatement capability

To support meaningful year-on-year analysis under IFRS 18, our data models also enable:

Comparative year restatement/reclassification of financial data
Consistent tracking of operating, investing and financing performance over time

This ensures analysts can perform like-for-like comparison across reporting periods, even where classification structures have changed.

Why data structure matters for analysis

Data structure is an essential foundation for systematic data management and analysis.

Without consistent data classification, analysts can face the risks of:

distorted operating performance trends
inconsistent margin analysis
weak comparability across periods or peers
misinterpretation of financing impacts

Structured and properly restated data enables:

cleaner trend analysis
better peer and period comparison
more reliable performance tracking

Our approach: IFRS 18-ready analytical data models

Our data models are designed to support downstream analysis, not just reporting, by providing:

consistent transaction-level classification
stable historical comparability of datasets
clear mapping from raw data to homogenized templates
ability to separate operational, financial and investment flows

Key takeaway

IFRS 18 aims to reduce fragmentation in reporting and provide investors with a clearer, more comparable view of a company’s financial performance. IFRS 18 represents a strategic shift toward more disciplined and transparent performance communication.

IFRS 18 improves financial performance comparability but its analytical value is unlocked only when the data are structured for analysis over time, consistently classified and historically comparable.

Need IFRS 18-ready analytical data?

We provide structured data models designed to support consistent financial analysis, performance tracking and insight generation under IFRS 18 frameworks.

Contact us: inforequest@wvb.com

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