IFRS 18 is the biggest change to the presentation of financial statements in more than twenty years. Although it doesn’t change how transactions are measured, it changes how companies present and explain their financial performance, making financial statements more comparable and transparent.

The standard becomes mandatory for annual reporting periods beginning on or after 1 January 2027, replacing IAS 1. Because IFRS 18 is applied retrospectively, companies reporting under IFRS should already be preparing during 2026.

Why was IFRS 18 introduced?

Investors often complained that comparing companies was unnecessarily difficult.

One company would present “Operating Profit.”

Another would present “Adjusted Operating Profit.”

A third would report several versions of EBITDA without clearly explaining how they were calculated.

Even companies operating in the same industry could produce income statements that looked completely different.

IFRS 18 aims to solve this problem by introducing a more consistent structure for the Statement of Profit or Loss.

What changes?

1. A mandatory Operating Profit subtotal

For the first time, IFRS defines an operating profit subtotal that every company must present.

This should significantly improve comparability between companies.

2. New categories for income and expenses

Items in the Statement of Profit or Loss must be classified into specific categories, including:

• Operating

• Investing

• Financing

• Income Taxes

• Discontinued Operations

This creates a more consistent presentation across industries.

3. Greater transparency around management KPIs

Many companies publish measures such as:

• Adjusted EBITDA

• Underlying Profit

• Normalised Earnings

Under IFRS 18 these Management-defined Performance Measures (MPMs) don’t disappear.

Instead, companies must explain:

• how the measure is calculated;

• why management uses it; and

• how it reconciles to IFRS numbers.

This gives investors much better insight into the figures presented outside the financial statements.

Does IFRS 18 change accounting entries?

No.

This is probably the biggest misconception.

IFRS 18 does not change:

• revenue recognition;

• depreciation;

• inventory accounting;

• lease accounting;

• impairment calculations.

Instead, it changes how information is presented and disclosed.

The accounting stays largely the same.

The financial statements look different.

Why should accountants care today?

Although the mandatory application date is 2027, comparative information must also be presented under the new format.

That means companies should already be reviewing:

• chart of accounts;

• reporting structures;

• management reports;

• ERP systems;

• consolidation processes; and

• financial statement templates.

Waiting until 2027 will almost certainly be too late for many organisations.

Final thoughts

IFRS 18 isn’t about changing accounting principles.

It’s about making financial statements easier to understand.

For accountants, auditors and finance professionals, the challenge won’t be learning new journal entries—it will be adapting reporting processes, systems and disclosures.

The sooner organisations begin preparing, the smoother the transition will be.

After all, great financial reporting isn’t just about producing the correct numbers—it’s about presenting them in a way that everyone can understand.

GR/IR stands for:

• GR = Goods Receipt

• IR = Invoice Receipt

It is a temporary account used when:

• the goods arrive first,

• but the supplier invoice arrives later.

Or the other way around.

This happens all the time in real business.

A simple real-life example

Imagine your company orders frozen chicken from Thailand for €10,000.

The goods arrive on 28 March.

But the supplier invoice only arrives on 3 April.

Now accounting has a problem:

• Operations say:
  “We already received the goods.”

• Accounting says:
  “Okay… but where is the invoice?”

This is where GR/IR comes in.

Step 1 — Goods Receipt (GR)

When the warehouse confirms the delivery in SAP, the system posts something like this:

Debit Inventory €10,000

Credit GR/IR €10,000

What does this mean?

• Inventory increases because the goods physically arrived.

• But we still do not have the supplier invoice.

• So instead of posting Accounts Payable immediately, SAP parks the amount in GR/IR temporarily.

Think of GR/IR as:

“We received something, but paperwork is still missing.”

Step 2 — Invoice Receipt (IR)

A few days later, the supplier invoice arrives.

SAP posts:

Debit GR/IR €10,000

Credit Accounts Payable €10,000

Now:

• the GR/IR account clears,

• and the supplier liability is officially recorded.

Why do companies use GR/IR?

Without GR/IR, month-end accounting would become messy very quickly.

Companies need:

• inventory to be correct,

• liabilities to be correct,

• and expenses to be recorded in the proper period.

GR/IR helps match:

• physical movement of goods,

• with financial documents.

It is basically an accounting bridge between logistics and finance.

Why accountants reconcile GR/IR

This is the important part.

The GR/IR account should usually clear itself.

But in reality, things go wrong all the time:

• invoices never arrive,

• wrong quantities are invoiced,

• duplicate invoices happen,

• goods were returned,

• purchasing orders were incorrect,

• exchange rate differences appear,

• somebody forgot to post something in SAP.

This is why accountants review GR/IR balances during month-end close.

If old balances stay there for months, it usually means:

“Something in the process is broken.”

Example of a GR/IR issue

Let’s say:

• Goods received: €10,000

• Invoice received: €9,500

Now GR/IR still has €500 remaining.

Accounting needs to investigate:

• Was the invoice wrong?

• Was delivery incomplete?

• Was there a pricing issue?

• Was freight missing?

This is why GR/IR reconciliations are so important.

Is GR/IR an asset or a liability?

This confuses many beginners.

The answer is:

It can behave like both.

• Credit balances often represent goods received but not invoiced yet.

• Debit balances may represent invoices received before goods arrived.

That’s why many companies present GR/IR separately during reconciliation reviews.

The easiest way to understand GR/IR

Forget the technical SAP language.

Just remember this:

GR/IR is a temporary holding account used when goods and invoices arrive at different times.

That’s it.

Once both sides are posted correctly:

• the account should clear,

• and everybody is happy.

Well… at least until month-end starts again.

VLOOKUP was something that was used at least 50 times per day, it became so used that I even had dreams about it. Jokes aside, VLOOKUP is a lookup and reference function that is used by all financial professionals, from juniors to seniors to manager and maybe even partners.

=VLOOKUP(lookup_value, table_array, col_index_num, [range_lookup])

The function works pretty straight forward, you input the lookup value, then you select the table array from where you want to get the results and finally you specify from which column you want the results to be displayed.

All works fine until you realize that this search only works from left to right, then you must always count the columns manually and completely breaks if columns are inserted or deleted.

So the question is quite simple, is there a way to fix these issues? The answer will always be yes because if you are an excel wizard, you will know that there are many solutions for one problem.

However, back in march 2020, Microsoft updated Excel with a brand new function that was set to revolutionize the world of boring accountants: the XLOOKUP!

Just like VLOOKUP, XLOOKUP is a lookup and reference function but BETTER because:

1. there is no column counting involved

2. can look left OR right (hell yes)

3. has built-in exact match by default

4. it is cleaner and easier to read

5. handles errors nicely (praise the lord)

6. can return arrays (dynamic results)

7. and is more robust for automation

Mainly, these are the 7 reasons why this formula should replace and make you forget about VLOOKUP. It is definitely better, more versatile and can make your work faster and more efficient.

=XLOOKUP(lookup_value, lookup_array, return_array)

Have you heard about XLOOKUP? Do you think it is genuinely better than VLOOKUP? If yes, please do leave your thoughts in a comment below.

We are excited to invite you to our annual Microsoft Excel webinar. Whether you’re starting your career in accounting, finance, or any role where Excel is essential, this session will give you a strong and confident start.

You’ll learn the key fundamentals to build your skills, as well as practical shortcuts and clever techniques that you won’t typically find on most educational websites.

You can find out event on Linkedin here. You can also sign up directly on our submission form here.

Before anyone manages a company, invests in shares, or allocates public funds, they first learn consciously or not how to manage their own money. Personal finance is the training ground for general finance.

What Personal Finance Really Is

Personal finance is the daily management of income, spending, saving, investing, and risk. It answers five simple questions:

How do I earn?

How do I spend?

How do I save?

How do I grow money?

How do I protect myself financially?

It’s not about wealth; it’s about control and direction.

Why It Comes First

The same principles used in corporate and public finance are learned personally:

Budgeting - managing cash flows

Saving - building capital

Debt control - managing liabilities

Investing - allocating resources

Risk planning - financial protection

If you can’t manage a personal budget, managing a business balance sheet becomes difficult.

The Core Areas

Income management – Know your sources and improve them.

Spending discipline – Track and control where money goes.

Saving habit – Pay yourself first and build security.

Investment mindset – Let money grow instead of staying idle.

Risk awareness – Prepare for uncertainty and emergencies.

Together, these create financial stability and opportunity.

From Personal to General Finance

General finance is simply personal finance scaled up.

Individuals manage wallets, companies manage cash flows, and governments manage budgets—but the logic is the same: plan, control, grow, and protect resources.

Mastering personal finance builds the skills needed to handle bigger financial responsibilities.

Final Thought

Before building wealth in markets or businesses, build discipline at home.

Because every strong financial system begins with one person making smart choices about money…

We’re building accountingeducation.eu, a blog that explains accounting and finance in a simple, friendly way — and we’re looking for students or anyone who would like to contribute.

If you’re studying accounting, finance, or preparing for ACCA and you enjoy writing, learning, and explaining concepts to others, this could be a great experience. You don’t need to be an expert — just curious, willing to research, and happy to share what you’re learning.

This is a collaborative, unpaid opportunity for now. In return, you’ll get your name on your articles, you’ll build a real portfolio, and you’ll gain experience writing about topics that matter in your studies and future career.

If you’d like to be part of it, send me a message at florin@mailbox.org and tell me a bit about yourself. I’d love to hear from you.

Flo