IASB Updates 2026: What CFOs Need to Act On Now
For CFOs and finance directors managing IFRS reporting across GCC, Europe, and APAC, a monthly digest of every active IASB change, who it hits, and what action is required before your next close.
✓ Written by Prima Consulting’s advisory team · ✓ Serving GCC, Europe & APAC · ✓ Actuaries + CPAs + CFAs
TL;DR
The IASB updates 2026 have already started hitting financial statements. Four amendments became mandatory on 1 January 2026, covering IFRS 9, IFRS 7, IAS 21, and Annual Improvements Volume 11. This digest covers what each change requires, who is in scope, and the status of active exposure drafts, including the Risk Mitigation Accounting proposal open for comment until 31 July 2026. IFRS 18 replaces IAS 1 from 1 January 2027, but your 2026 numbers are already the comparative period. Start your IFRS 18 mapping now.
What the IASB Updates 2026 Mean for Your Next Reporting Date
If your team filed its 31 December 2025 financial statements without a full pass on the January 2026 mandatory changes, you’re already behind. Four sets of amendments took effect on 1 January 2026. They’re not optional. They’re not transitional. They apply now.
Most of the noise in the market is about IFRS 18, the big income statement restructure coming in 2027. That’s fair, but it’s also a distraction if your current-period filings haven’t addressed the 2026 mandatory package. Get those right first.
Here’s the thing: not every update carries equal weight for every business. A bank running an IFRS 9 portfolio has very different priorities than a manufacturing group with long-term decommissioning liabilities. This digest breaks it down by update so you can assess relevance quickly and move on.
For GCC-based entities, the IFRS updates GCC 2026 page on the Prima Consulting site covers the regional overlay, including how Saudi SOCPA and UAE regulatory guidance interact with these IASB changes.
- What this article covers: the four amendments effective 1 January 2026 and what action each requires
- The status of every active IASB exposure draft you need to track through mid-2026
- Why IFRS 18 preparation belongs in your 2026 work plan, not your 2027 panic list
Status Table: Where Each Change Stands Right Now
| Update | Status | Effective Date | Who Is Affected |
|---|---|---|---|
| IFRS 9 & IFRS 7 — Classification and Measurement | Final Standard — Effective | 1 Jan 2026 | All entities with financial instruments |
| IFRS 9 & IFRS 7 — Nature-Dependent Electricity Contracts (PPAs) | Final Standard — Effective | 1 Jan 2026 | Energy sector, utilities, corporates with renewable PPAs |
| IAS 21 — Lack of Exchangeability | Final Standard — Effective | 1 Jan 2025 (retrospective) | Entities operating in restricted-currency jurisdictions |
| Annual Improvements Volume 11 | Final Standard — Effective | 1 Jan 2026 | All IFRS preparers — covers six standards including IAS 7 |
| IFRS 18 — Presentation and Disclosure | Final Standard — Not Yet Effective | 1 Jan 2027 (2026 comparative required) | All IFRS preparers — replaces IAS 1 |
| IFRS 19 — Subsidiaries without Public Accountability (updated) | Final Standard — Not Yet Effective | 1 Jan 2027 | Eligible subsidiaries of IFRS parent companies |
| IAS 37 Provisions — Targeted Improvements (ED/2024/8) | Exposure Draft — Redeliberation Active | TBC | Entities with large provisions, decommissioning liabilities, levies |
| Risk Mitigation Accounting — IFRS 9 & IFRS 7 (ED/2025/1) | Exposure Draft — Comment Period Open to 31 Jul 2026 | TBC | Financial institutions managing interest rate risk |
| IAS 28 — Equity Method (ED/2024/7) | Exposure Draft — Redeliberation Active | TBC | Investors in associates and joint ventures |
| IAS 28 — Fair Value Option (ED/2026/1) | Exposure Draft — Issued February 2026 | TBC | Entities using fair value option for investments in associates/JVs |
| IFRS 16 Leases — Post-Implementation Review | Review In Progress — Decisions Q3 2026 | N/A (review, not amendment) | All entities with lease arrangements |
Not sure which of these apply to your entity?
See how Prima Consulting’s IFRS advisory team maps your exposure to the 2026 mandatory package and builds your IFRS 18 transition plan → IFRS changes 2026
IFRS 9 and IFRS 7 Amendments — Effective 1 January 2026
Two separate IFRS 9 and IFRS 7 amendment packages took effect on 1 January 2026. Finance teams often treat these as one update. They’re not.
The first covers classification and measurement of financial instruments. The IASB added application guidance and examples to address inconsistency in how entities apply the SPPI (Solely Payments of Principal and Interest) test — particularly for ESG-linked loans where interest rates are tied to sustainability metrics. The question the IASB was answering: does a variable interest rate linked to an ESG performance target fail the SPPI test? Their answer, via new guidance: not automatically. But the assessment requires deliberate analysis, and the new examples make clear what that analysis must cover.
The second package covers Power Purchase Agreements, or PPAs. Energy companies and corporates with renewable energy contracts have been dealing with classification questions for years. The amendment clarifies the “own-use” exemption, permits hedge accounting when PPAs are used as hedging instruments, and adds new IFRS 7 disclosure requirements so investors can see the effect on financial performance and cash flows. Renewable energy procurement is expanding fast across the GCC and Europe — this update is directly relevant to any entity that has signed, or is considering, a nature-dependent electricity supply contract.
Who Is Actually Affected by This
Every entity that holds financial instruments is technically in scope of the classification and measurement amendment. In practice, the companies with the most work to do are banks and financial institutions with large portfolios of ESG-linked loans, and any corporate or utility that has entered into a long-term renewable PPA.
If your entity isn’t in either of those categories, you likely need a short confirmation review rather than a full implementation project. Don’t overengineer it.
What Your Team Needs to Do Before Year-End
- Review your classification assessments for any financial assets with ESG-linked features under the updated SPPI guidance.
- Assess whether any PPA contracts fall within the scope of the new IFRS 9 “own-use” clarification or hedge accounting rules.
- Update IFRS 7 disclosures to reflect the new PPA requirements if in scope — this is a mandatory disclosure addition, not optional.
- Document your conclusions. Auditors are reviewing this carefully in 2026 year-end engagements.
The IASB’s amendments also received overwhelming support during consultation. According to the IASB’s September 2024 update, over 80% of respondents backed the classification clarifications in IFRS 9. That’s notable, it means the direction of travel is settled. There’s no realistic prospect of reversal.
Annual Improvements Volume 11 — Six Standards, One Package
Annual improvements cycles don’t generate headlines. They should.
Volume 11 of the Annual Improvements to IFRS Accounting Standards took effect on 1 January 2026. It covers six standards, including IAS 7 Statement of Cash Flows. The amendments address clarifications, corrections of minor conflicts, and simplifications, but “minor” doesn’t mean “skip the review.” Inconsistencies in how IAS 7 cash flow classifications are applied across entities have been a persistent audit issue. The Volume 11 amendments tighten that up.
The Changes Most Finance Teams Are Skipping
Here’s a question worth sitting with: when did your team last do a structured review of your IAS 7 classification policies?
Most groups run a once-a-year standards update process and check the big-ticket items. Volume 11 tends to fall through the gap because it’s labeled “narrow-scope.” But narrow scope doesn’t mean zero impact. If your cash flow statement has been applying a prior interpretation that Volume 11 corrects, your 2026 comparative restatement obligation applies.
Check against the full list of six standards covered. If any of the affected areas touch your entity’s accounting policies, book a review now rather than catching it during audit fieldwork.
Download: Prima Consulting’s 2026 IFRS Mandatory Changes Checklist
A one-page self-assessment covering all four mandatory January 2026 amendments and your IFRS 18 readiness status.
Email info@primaconsulting.org with subject line “2026 Checklist” to receive it.
IFRS 18 Is Coming in 2027 — Your 2026 Numbers Are Already in Scope
IFRS 18 replaces IAS 1. It’s effective 1 January 2027. And if you think you have a full year before this becomes your problem, you don’t.
Retrospective application is required. For calendar year-end entities, the 2026 financial year is the comparative period. That means when you publish your 2027 financial statements, your 2026 income statement needs to be restated under IFRS 18’s classification framework. Your 2026 data has to be captured in a way that supports that restatement — and that means your systems, chart of accounts, and classification policies need to be IFRS 18-ready by 1 January 2026. Not 2027. Now.
According to a March 2024 IASB fact sheet, over 60% of surveyed entities currently use inconsistent operating profit definitions. IFRS 18 ends that. Every entity will present operating profit using the same mandatory definition. That change alone will affect analyst models, covenant calculations, and management KPIs for most groups.
Why “Effective 2027” Is a Finance Team Problem Right Now
Think about what retrospective application actually requires. You’re not just changing a label on a line item. You’re reclassifying every income and expense item into one of five categories, building a new operating profit subtotal using the IASB’s definition, and adding mandatory disclosure of Management-Defined Performance Measures (MDPMs) when you present non-IFRS metrics.
That’s an ERP project. It’s a chart of accounts project. It’s a disclosure redesign project. None of that starts in December 2026.
KPMG’s Q4 2025 update stated it directly: all companies should prepare for IFRS 18 on presentation and disclosure, effective 2027, requiring comparative figures that must be ready from 1 January 2026. That’s where you are right now.
The Five Categories You Need to Map Before December
Under IFRS 18, every income and expense line goes into one of five categories:
- Operating — the default category; includes all items not classified elsewhere
- Investing — returns on investments not integral to the main business
- Financing — costs of raising and managing finance
- Income taxes — as defined under IAS 12
- Discontinued operations — as defined under IFRS 5
The hard part isn’t the categories. It’s the judgment calls at the boundaries. An entity with an investment property portfolio, treasury operations, and a financing subsidiary has classification questions across all five categories simultaneously. Map those before year-end. Don’t leave it for the transition year.
Prima Consulting has been working through IFRS updates GCC 2026 with clients across Saudi Arabia, UAE, and Bahrain. The classification mapping work — particularly for mixed-business conglomerates common in the region — is where most of the time goes.
What the IASB January–April 2026 Meetings Decided
The IASB met monthly from January through April 2026. Here’s what moved.
IFRS 16 Post-Implementation Review: What the IASB Found
The IASB has been reviewing IFRS 16 Leases since it published a Request for Information in 2024. IFRS 16 came into effect in January 2019, and the review is now in its final stages. At the January 2026 meeting, the Board reviewed feedback on transition requirements. At the April 2026 meeting, it decided to explore requiring lessees to disclose the components of total cash outflow for leases, together with where each component sits in the statement of cash flows.
That’s a narrower change than many expected. The IASB isn’t reopening the standard wholesale. Final decisions are expected in Q3 2026, with a project report and feedback statement before end of 2026. If you run a significant lease portfolio — retail, logistics, energy infrastructure — watch this space. The disclosure additions could affect how your lease cash flow information is presented from 2027 onwards.
IAS 28 Equity Method Exposure Draft — Redeliberations Continue
The Equity Method of Accounting Exposure Draft (IAS 28 revised) has been in redeliberation through Q1 2026. At the March 2026 meeting, the IASB retained its proposal on how to handle increases in ownership interest without loss of significant influence. Eight of 13 members backed the decision — which means it’s not settled unanimously, and the final standard will likely carry some dissenting opinions worth reading.
If you hold investments in associates or joint ventures, this is the update to track through H2 2026. The equity method changes affect how you account for partial disposals, step-up acquisitions, and changes in ownership percentage. No effective date confirmed yet.
IAS 37 Provisions Targeted Improvements — Still in Motion
The Provisions Targeted Improvements Exposure Draft has been in redeliberation since early 2025. February 2026 saw decisions on the “transfer condition” within the present obligation recognition criterion, and how it applies to levies. The IASB added a constraining presumption to help entities identify the economic benefit or activity that triggers a levy — all 13 members agreed.
This matters most for entities with asset decommissioning obligations, environmental levies, or government-imposed charges. The amendments would require earlier recognition of some provisions and more standardised measurement of long-term obligations. No effective date set yet, but the direction is toward tighter, earlier recognition. If your balance sheet carries large long-term provisions, start assessing the gap now rather than waiting for the final standard.
Risk Mitigation Accounting Exposure Draft — Comment by July 2026
The IASB published its Risk Mitigation Accounting Exposure Draft in December 2025. It proposes a new accounting model to reflect how financial institutions manage interest rate risk — specifically, macro hedging of portfolios rather than item-by-item hedging. The comment period closes 31 July 2026.
Banks and financial institutions: this is one to prioritise. If your institution currently applies portfolio-level interest rate hedging and you’re finding IFRS 9’s hedge accounting requirements a poor fit for how you actually manage risk, the Risk Mitigation Accounting model may change that materially. Submit a comment letter. The IASB reads them. Your operational experience has direct value to the standard-setting process here.
What Changed in January and February 2026 IASB Meetings
January’s meeting added one important decision to the agenda: the IASB moved the Financial Instruments with Characteristics of Equity project from the research programme to the standard-setting work plan. All 13 members agreed. That’s a meaningful signal. It means the IASB has committed to producing a standard, not just a discussion paper, on equity classification. There’s no effective date yet — but the project is now formally in the pipeline.
The January meeting also cleared two IFRIC agenda decisions for publication: one on Embedded Prepayment Options (IFRS 9) and one on Determining and Accounting for Transaction Costs (IFRS 9). Neither required a vote from IASB members, meaning no member objected. Both were published in an addendum to IFRIC Update November 2025.
February brought a tentative decision on what constitutes a “modification” of a financial instrument under IFRS 9. The IASB clarified that a modification is a change in contractual terms that affects the nature, timing, amounts, or uncertainty of contractual cash flows. Simple as that sounds, this matters for entities that have been restructuring debt arrangements or amending loan agreements — and the definition now has clearer boundaries.
What’s interesting is the IAS 28 Fair Value Option Exposure Draft that landed in February 2026 (ED/2026/1). It proposes that entities be permitted to use the fair value option for investments in associates and joint ventures in more circumstances. If your group consolidates a number of investments using the equity method but would prefer fair value through profit or loss for some of them, watch this one. Comment period details are on the IASB website.
What You Now Know — and What to Do This Quarter
- Four amendments are already mandatory. IFRS 9, IFRS 7, IAS 21, and Annual Improvements Volume 11 all took effect 1 January 2026. If your team hasn’t confirmed compliance with each, that review is overdue.
- IFRS 18 preparation starts in 2026, not 2027. Your 2026 income statement is the comparative period. Category mapping, ERP adjustments, and disclosure design belong in your current project plan.
- Three exposure drafts need your attention before August. Risk Mitigation Accounting closes 31 July 2026. IAS 28 (Equity Method) and IAS 37 (Provisions) are in active redeliberation with no effective dates confirmed yet.
See how Prima Consulting’s IFRS advisory team handles your 2026 mandatory compliance review and IFRS 18 gap assessment →
Start your IFRS 2026 readiness assessment
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Frequently Asked Questions
What are the key IASB updates 2026 that are already mandatory?
Four updates took effect on 1 January 2026: IFRS 9 and IFRS 7 amendments on classification and measurement, IFRS 9 and IFRS 7 amendments on nature-dependent electricity contracts (PPAs), Annual Improvements to IFRS Accounting Standards Volume 11, and IAS 21 amendments on lack of exchangeability (effective 1 January 2025). All apply to calendar year-end entities from 2026 financial statements.
What accounting standards changed in January 2026 for finance teams?
The January 2026 mandatory package covers IFRS 9 classification guidance for ESG-linked loans and Power Purchase Agreements, plus six narrow-scope improvements in Annual Improvements Volume 11. The IASB also held its January 2026 meeting covering IFRS 16 post-implementation review feedback and new IFRIC agenda decisions on IFRS 9 financial instrument modifications.
What is the effective date of IFRS 18, and why does it affect 2026 reporting?
IFRS 18 is effective 1 January 2027 and replaces IAS 1 for financial statement presentation. It requires retrospective application, meaning the 2026 financial year becomes the mandatory comparative period. Your 2026 income statement data must support the IFRS 18 five-category classification when you publish 2027 financial statements — so preparation starts in 2026.
What IASB exposure drafts are currently open for comment in 2026?
The Risk Mitigation Accounting Exposure Draft (proposed amendments to IFRS 9 and IFRS 7) is open for comment until 31 July 2026. The IAS 28 Equity Method Exposure Draft and the IAS 28 Fair Value Option Exposure Draft (ED/2026/1, issued February 2026) are also active. The IAS 37 Provisions Targeted Improvements Exposure Draft is in redeliberation with the comment period already closed.
How do the IASB updates 2026 affect GCC companies specifically?
GCC entities applying IFRS face all the same mandatory 2026 amendments as global preparers. Regional considerations include SOCPA endorsement timelines in Saudi Arabia, UAE Central Bank guidance on IFRS 9 credit loss models, and the increasing pace of renewable energy PPA adoption across the Gulf — which puts the IFRS 9 PPA amendment directly in scope for many regional corporates and utilities.
