IFRS Accounting Standards

UKEB endorses IFRS 18 for use in the UK

In December 2025, the UK Endorsement Board (UKEB) endorsed IFRS 18 Presentation and Disclosure in Financial Statements for use in the UK. Issued by the International Accounting Standards Board (IASB) in April 2024, IFRS 18 replaces IAS 1 and establishes overarching presentation and disclosure requirements across the primary financial statements and notes, without altering recognition or measurement principles.

The Standard becomes effective for annual reporting periods beginning on or after 1 January 2027, with early application permitted. However, IFRS 18 requires retrospective application, meaning the accounting period starting in 2026 will be the comparative accounting period. Entities should ensure their preparations for the introduction of IFRS 18 reflect this requirement.

The Corporate Reporting Faculty has published several additional resources on IFRS 18, including this factsheet, a webinar introducing IFRS 18, and an article exploring how the new IFRS® Accounting Standard will support the analysis of financial performance.

IASB issues illustrative examples on reporting uncertainties

In November 2025, the IASB released final illustrative examples to help companies apply IFRS Accounting Standards when reporting the effects of uncertainties in their financial statements. These examples build on the near‑final drafts published in July, which were intended to support early planning for 2025 annual reports. While the illustrations use climate‑related scenarios, the underlying principles apply broadly to all types of uncertainty.

The examples do not have a formal effective date, but entities are expected to implement them on a timely basis. If this is not achievable for the 2025 financial statements, entities should consider disclosing this fact.

IASB issues amendments for translating financial information into hyperinflationary currencies

The IASB issued narrow-scope amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates in November 2025, clarifying how companies should translate financial statements from a non-hyperinflationary currency into a hyperinflationary one. Aimed at improving usefulness and reducing diversity in practice, the amendments respond to stakeholder feedback and provide a clearer basis for reporting. They are effective from 1 January 2027, with early application permitted.

The comment period is open until 31 July 2026, during which the IASB is seeking practical feedback from financial institutions and other stakeholders that are able to test the model using their own data.

IASB ED on new interest rate risk management accounting model

The IASB has proposed a new Risk Mitigation Accounting model in an Exposure Draft issued in December 2025. The new model is designed to better reflect how financial institutions manage interest rate risk across their portfolios, improving transparency and aligning accounting more closely with actual risk management practices.

The proposals include amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures, along with consultation on withdrawing certain requirements of IAS 39 Financial Instruments: Recognition and Measurement.

The comment period is open until 31 July 2026, during which the IASB is seeking practical feedback from financial institutions and other stakeholders that are able to test the model using their own data.

UKEB invites engagement on the draft endorsement assessment of IFRS 19

The UKEB published its [Draft] Endorsement Criteria Assessment (ECA) of IFRS 19 Subsidiaries without Public Accountability: Disclosures ([Draft] ECA) in November 2025, and is inviting stakeholder feedback as explained in this article. IFRS 19 provides reduced disclosure requirements for eligible subsidiaries. The [Draft] ECA has tentatively concluded that IFRS 19 meets the UK’s statutory endorsement criteria, supports the long-term public good, and is not contrary to the true and fair view. Accordingly, the UKEB’s tentative view is that it will endorse IFRS 19 for use in the UK.

Stakeholders are encouraged to submit comments by 26 February 2026 to help determine whether the Standard is suitable for UK endorsement.

UKEB statement of cash flows research paper - Net Debt

UKEB is conducting a research project to influence the IASB’s work on improving IAS 7 Statement of Cash Flows (previously Cash Flow Statements) along with related matters. The latest paper on net debt was published in November 2025 and covers the prevalence of net debt disclosures globally, their importance to users, and how the IASB might improve the accessibility and comparability of this key financial performance metric.

ICAEW’s response to post-implementation review of IFRS 16

ICAEW’s response to the IASB’s post-implementation review of IFRS 16 believes that, from the perspective of providing relevant information that faithfully represents leases in financial statements, IFRS 16 is working as intended. However, ICAEW identified a need for some targeted improvements aimed at improving transparency and comparability, in the form of clarifications and additional guidance. In addition, ICAEW highlighted further issues that could be resolved with limited effort, to improve consistent application of IFRS 16 in practice.

Sustainability reporting

ISSB issues targeted amendments to IFRS S2

The International Sustainability Standards Board (ISSB) issued targeted amendments to IFRS S2 Climate-related Disclosures in December 2025 to address specific challenges companies face when applying greenhouse gas emissions requirements. Based on stakeholder feedback, the amendments introduce reliefs and clarifications to ease implementation while preserving the usefulness of information for investors. The amendments intend to support jurisdictions implementing ISSB™ Sustainability Disclosure Standards and apply to reporting periods beginning on or after 1 January 2027, with early adoption permitted.

ISSB welcomes TNFD's support as it advances nature-related disclosures

The ISSB has welcomed the Taskforce on Nature-related Financial Disclosures’ (TNFD) decision to complete its current technical work by Q3 2026 and pause commencement of further guidance. The ISSB plan to advance disclosures on nature related risks and opportunities using the TNFD framework. To meet investor needs, ISSB will develop incremental disclosure requirements not already covered in ISSB Sustainability Disclosure Standards, considering options such as guidance, amendments or a new Standard, subject to public consultation.

The ISSB is aiming to have an Exposure Draft of incremental disclosure requirements ready by the Convention on Biological Diversity COP17 in October 2026.  

Initiative to facilitate ISSB Standards as global passport

At its IFRS Sustainability Symposium, the ISSB announced the expansion of the Jurisdictional Adopters Working Group to support global “passporting” of ISSB compliant reports, helping to reduce fragmentation and costs while enhancing comparability. With around 40 jurisdictions planning adoption, the ISSB also unveiled a new Jurisdictional Rationale Guide. The guide reflects on jurisdictions’ experiences and their reasons for introducing the ISSB Sustainability Disclosure Standards, such as strengthening capital markets by informing investors’ capital allocation decisions.

Simplified EU sustainability reporting and due diligence rules

The European Parliament approved a provisional agreement to simplify EU sustainability reporting and due diligence rules in December 2025. The agreement limits reporting requirements to only the largest companies and eases administrative demands to boost competitiveness.

Sustainability reporting will apply to firms with over 1,000 employees and €450 million net turnover, while due diligence obligations will only apply to very large corporations with over 5,000 employees and €1.5 billion net turnover. Reporting requirements will be streamlined, sector specific disclosures made voluntary, and smaller business partners protected from additional data requests. Firms with fewer than 1,000 employees will not have to provide information to their bigger business partners beyond what is included in the voluntary reporting standards. Due diligence rules will apply from July 2029 as part of the EU’s wider effort to cut red tape through the Omnibus I simplification package.

EFRAG unveils draft simplified ESRS to the European Commission

In December 2025, the European Financial Reporting Advisory Group (EFRAG) submitted its technical advice to the European Commission on draft simplified European Sustainability Reporting Standards (ESRS). Developed as part of the Commission’s wider Omnibus simplification initiative, the revised ESRS aim to significantly streamline reporting by introducing greater flexibility, phased implementation and reliefs, while cutting mandatory data points by around 61%. Some of the key proportionality and transitional reliefs include the use of information available without undue cost or effort, one-year deferrals for acquisitions, partial metric reporting where data is lacking, and exclusions for immaterial activities or non-controlled joint operations.

The next step will be the Commission’s preparation of a Delegated Act to implement these revised standards, marking a major move towards streamlining sustainability reporting under the Corporate Sustainability Reporting Directive.

Implementation resources from EFRAG

In December, EFRAG launched the ESRS Knowledge Hub, a user friendly online platform consolidating all key sustainability reporting materials, including the 2023 ESRS, the Voluntary Sustainability Reporting Standard for non-listed Small and Medium-sized Enterprises (SMEs) standard and the forthcoming simplified ESRS. It provides interactive access, links to EU legislation and international standards and insights into ongoing standard setting, supporting consistent implementation and enhancing transparency.

EFRAG has also issued three new guides to support SMEs in sustainability reporting.

UK GAAP

FRC latest thematic review

The Financial Reporting Council (FRC) has published a thematic review of smaller listed UK companies, outlining four areas where smaller listed companies can improve the quality of their corporate reporting: revenue recognition, cash flow statements, impairment of non financial assets, and financial instruments. Drawing on annual reports from 20 companies outside the FTSE 350, the report provides practical insights, illustrative examples, and common triggers for FRC enquiries. It is designed to help companies enhance the quality of their reporting, leading to more transparent and consistent information for users of financial statements. It also supports investors by improving the clarity and comparability of the disclosures they rely on.

ICAEW response to draft amendments to FRS 102 adapted formats

The FRC proposed amendments to FRS 102 to reflect the subsequent replacement of IAS 1 with IFRS 18, specifically for companies that use adapted balance sheet or profit and loss formats permitted under UK company law.

ICAEW broadly supports the proposed amendments to the definitions of current and non-current assets and of current liabilities, but has concerns about the proposed changes to the line items required in the adapted formats of the balance sheet and statement of profit or loss. The FRC is proposing to amend the required line items, such as adding “operating expenses” and removing “finance costs”, without adopting the full category-based classification system from IFRS 18 that explains how income and expenses should be categorised. ICAEW’s response highlights concerns that this approach could require preparers to exercise excessive judgement when classifying income and expenses, potentially reducing consistency and comparability across entities.

UK regulation for company accounts

Identity verification is now a legal requirement

From 18 November 2025, identity verification became a legal requirement, with a 12 month transition period to ensure all directors and people with significant control (PSCs) are verified. To prove their identity for Companies House using GOV.UK One Login, individuals should start on the companies house service page. Individuals will then be guided through the process and presented with options related to the documents they hold and preferences on how they wish to share them. This may involve being directed to an app and instructions for this will be provided at the relevant point within the service.

The process links verified identities to GOV.UK One Login accounts and safeguards are emphasised to prevent fraud. Directors, PSCs and Authorised Corporate Service Providers (ACSP) must verify within set timeframes. These measures aim to reduce fraud and improve transparency in UK company reporting.

Increase to Companies House fees

Companies House fees will rise significantly from 1 February 2026, with some increasing by more than 50%. Companies House fees are set on a cost recovery basis and the higher fees will fund its expanded powers under the Economic Crime and Corporate Transparency Act, as well as to support Insolvency Service enforcement; measures that aim to boost transparency, economic confidence, and combat misuse of UK corporate structures. More details can be found in this article with key increases listed below.

• Digital incorporation filings will double from £50 to £100, while paper incorporations will cost £124.
• Confirmation statement fees will rise from £34 to £50 for digital and £110 for paper filings.
• A new £63 fee will also apply for registering as an ACSP.