IFRS 18 readiness in Odoo and NetSuite: what to change before 2027

IFRS 18 changes how companies that report under IFRS Accounting Standards lay out their income statement. It applies to annual reporting periods beginning on or after 1 January 2027, and it applies retrospectively. For a calendar-year company, that means the 2026 income statement must be restated in the new format and reconciled to what was reported before. If your ERP cannot produce 2026 figures in the new structure, your finance team will rebuild them by hand at year-end.

This guide covers what IFRS 18 changes, the ERP work it creates, and how to approach it in Odoo and NetSuite. Facts below were checked against the IFRS Foundation, the UK Endorsement Board, EU law, FRAS Canada and Oracle and Odoo documentation on October 30, 2026.

This guide is general information, not accounting advice. How each account is classified is an accounting policy decision for your finance team and your auditor.

Disclosure: OPS is an Odoo partner and a NetSuite partner, and earns fees from ERP work. OPS is not an audit or accounting firm.

What IFRS 18 changes

The International Accounting Standards Board (IASB) issued IFRS 18 in April 2024. It replaces IAS 1 and focuses on the statement of profit or loss. It changes presentation and disclosure, not how profit is measured. Your net profit stays the same, but how results are grouped, labelled and explained changes.

• Five categories. Every item of income and expense is classified as operating, investing, financing, income taxes or discontinued operations.
• Two new required subtotals. Operating profit, and profit before financing and income taxes.
• Management-defined performance measures (MPMs). If you use your own profit subtotals in public communications, such as an "adjusted" profit figure in an investor presentation, you disclose them in a single note. For each one, you explain why it is useful and how it is calculated, reconcile it to the closest IFRS subtotal, and show the income tax effect and the effect on non-controlling interests for each reconciling item.
• Expenses by nature. If your income statement presents expenses by function (for example cost of sales, selling and administration), you must also disclose totals for depreciation, amortisation, employee benefits, impairment losses and inventory write-downs, and how much of each sits in each function line.
• Better grouping. New aggregation and disaggregation rules include requirements for breaking down "other" balances.
• Cash flow statement. Amendments to IAS 7 make operating profit the starting point for the indirect method and remove the options for classifying interest and dividend cash flows.

Who it applies to and when

IFRS 18 applies to companies that report under full IFRS Accounting Standards. If you are not sure which framework your statements use, ask your auditor.

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Why 2026 matters now

IFRS 18 is applied retrospectively. In your first IFRS 18 annual statements, you must show, for each line item in the statement of profit or loss, a reconciliation between the restated comparative amounts and the amounts you previously presented under IAS 1.

If you publish condensed interim statements under IAS 34, the first year brings extra work. Your interim reports must show the headings and subtotals you expect to use under IFRS 18, with line-by-line reconciliations for the comparative periods.

In practice, your 2026 transactions need to fit the new categories. The cleanest route is to have the account mapping in place before the 2026 year-end close, so 2026 actuals, 2027 budgets and 2027 reporting share one structure. KPMG suggests parallel runs of the old and new reporting in 2026 and aligning 2027 budgets with IFRS 18.

What changes inside your ERP

Expect work in these areas:

• Chart of accounts. Accounts that mix categories need splitting. A single interest account that holds both interest on borrowings and interest earned on investments may need to land in different categories. Catch-all "other income" and "other expenses" accounts need breaking down. The right classification depends on your main business activities, so agree it with your auditor first.
• Function and nature data. If you present expenses by function, depreciation, amortisation, employee benefits, impairment and inventory write-downs must be traceable into each function line. Payroll and depreciation entries need to carry both the nature (the account) and the function (for example a department or analytic account).
• Report layouts. You need a new income statement layout with the five categories and the two subtotals. Keep the IAS 1 layout until the reconciliation is done.
• Cash flow statement. The indirect method now starts from operating profit, and interest and dividend classification may change.
• Consolidation. KPMG notes that groups may need extra consolidation adjustments when a parent and a subsidiary have different main business activities.
• MPM data. Adjusted figures used with investors or lenders need a documented source for each reconciling item, plus its tax and non-controlling interest effects. This often lives in spreadsheets today. Decide where it will live and who controls it.
• Downstream reports. Management reports, budgets, board packs and lender reporting packages that use the old layout need updating. Check whether any covenant definitions refer to income statement line items.

If you run NetSuite

Oracle added an IFRS18 Standard Income Statement Layout in the August monthly release of NetSuite 2026.2. According to Oracle's documentation:

• It has sections for operating, investing, financing, income taxes and discontinued operations, with subtotal rows for the IFRS 18 structure.
• The sections ship empty. You add filters, such as account name, to choose which accounts appear in each section.
• Only income and expense accounts can be used in the layout.
• You can add a formula row for gross profit in the operating section, after setting up separate rows for revenue and cost of sales.
• It works with supported income statement reports, including the Income Statement and Comparative Income Statement.
• NetSuite does not classify accounts for you. Your organization decides the classification and configures the layout.

What to do:

• Agree the account mapping with finance and your auditor before you configure anything.
• Split mixed accounts first. Financial Report Builder can also filter sections by class, department, location and, in NetSuite OneWorld, subsidiary, but a clean account structure is easier to audit.
• Run the Comparative Income Statement for 2026 in both the IFRS 18 layout and your current layout. That gives you the base for the line-by-line reconciliation.
• Plan the expenses-by-nature note, the MPM note and the cash flow statement separately. Oracle's documentation for this layout covers the income statement only.

If you run Odoo

Odoo's accounting reports are built with its custom reports engine. According to Odoo's documentation, a report is made of report lines, and each line uses expressions to pull amounts. One engine matches accounts by the prefix of their account codes. Formulas can also match accounts by account tags, which helps when the same code prefix is used for different purposes. You can create variants of an existing report.

When we checked the Odoo 20 release notes on October 30, 2026, they did not list an IFRS 18 income statement. They did list a redesigned UAE chart of accounts that Odoo says complies with IFRS and UAE Commercial Companies Law.

What to do:

• Build an IFRS 18 variant of your profit and loss report, with the five categories and the two required subtotals. Keep your current report for the IAS 1 reconciliation.
• Where your account codes do not line up with the new categories, use account tags to group accounts by IFRS 18 category.
• If you present expenses by function, check that payroll and depreciation entries carry the function, for example through analytic accounts, so you can produce the expenses-by-nature note.
• Check your Odoo version's support window before building new reports on it. Odoo 17 left standard support in September 2026. See our Odoo 17 end of support guide.

Readiness checklist

1. Confirm with your auditor that IFRS 18 applies to you and when your first IFRS 18 period starts.
2. Name an owner in finance and one in ERP or IT.
3. Agree your main business activities and classification policy with your auditor.
4. Review the chart of accounts. Split accounts that mix categories and break up "other" lines.
5. Map every income and expense account to an IFRS 18 category, and record who approved the mapping.
6. Check that you can produce the five expenses-by-nature totals for each function line.
7. Build the IFRS 18 income statement in your ERP and keep the IAS 1 version.
8. Restate 2026 in both layouts and reconcile them line by line.
9. Update the cash flow statement starting point and the classification of interest and dividends.
10. List the adjusted measures you use publicly and prepare the MPM note, including tax and non-controlling interest effects.
11. Update management reports, budgets, board packs and lender packages.
12. If you report quarterly under IAS 34, prepare the first-year interim headings and reconciliations.

Common questions

When does IFRS 18 take effect?

For annual reporting periods beginning on or after 1 January 2027. Earlier application is permitted.

Does IFRS 18 change our net profit?

No. IFRS 18 changes presentation and disclosure. Profit is measured the same way, but it is grouped and explained differently.

Do we need to restate 2026?

If 2027 is your first IFRS 18 year, yes. IFRS 18 applies retrospectively, and you must reconcile each line of the restated comparative income statement to the amounts previously presented under IAS 1.

Does NetSuite support IFRS 18?

NetSuite 2026.2 includes an IFRS18 Standard Income Statement Layout. You still decide how accounts are classified and configure each section yourself.

Does Odoo support IFRS 18?

We did not find an IFRS 18 income statement in the Odoo 20 release notes. Odoo's custom reports engine can be used to build an income statement with the IFRS 18 categories and subtotals.

Do we need a new ERP for IFRS 18?

Not necessarily. Most of the work is account mapping, report layouts and data for the new notes. Start by checking what your current system and version can do.

Sources

All checked October 30, 2026.

• IFRS Foundation, IFRS 18 Presentation and Disclosure in Financial Statements
• IFRS Foundation, IFRS 18 standard text, paragraphs 83 and 117 to 123
• UK Endorsement Board, IFRS 18 project page
• EUR-Lex, Commission Regulation (EU) 2026/338
• FRAS Canada, Effective dates for IFRS Accounting Standards
• PwC Viewpoint, Transition from IAS 1 to IFRS 18
• PwC Viewpoint, IFRS 18 amendments to IAS 7
• KPMG, Transition to IFRS 18: how to get started
• Oracle, Using the IFRS 18 Income Statement Layout
• Oracle, NetSuite 2026.2 August monthly release
• Oracle, Income Statement report
• Odoo, Custom reports documentation
• Odoo, Release notes September 2026 (Odoo 20)

Related: ERP solutions at OPS and UAE e-invoicing readiness.