IFRS 18 in Business Central – Is your company prepared?
With International Financial Reporting Standard (IFRS) 18, the IASB (International Accounting Standards Board) has published a new standard for presenting income statements. The aim is to make financial statements more comparable internationally and to increase the transparency of the presentation of results. The focus is on new, clearly defined subtotals and a clear separation between operating, investing, and financing results.
Specifically, IFRS 18 requires a structured presentation with categories such as operating, investing, and financing. Companies must structure their income statements in such a way that these components of earnings are comprehensible and reported consistently, especially in consolidated financial statements.
The new standard is mandatory for fiscal years beginning on or after January 1, 2027, and must be implemented retrospectively. Due to the necessary adjustment of prior-year figures, early implementation is advisable. For many companies, this raises the question: How can IFRS 18 be implemented in Microsoft Business Central?
No out-of-the-box solution – IFRS 18 must be conceptualized
Important note: Business Central does not come with ready-made IFRS 18 functionality. There is no switch that automatically activates the new P&L structure.
Implementation is not achieved through changed posting logic, but through a well-thought-out functional and technical concept. IFRS 18 is primarily a structural and presentation standard – and this is exactly where the concept in the system comes in.
The chart of accounts as a foundation
The basis for any IFRS 18 implementation is a clearly structured chart of accounts. Each relevant income statement account must be clearly assigned to an IFRS 18 category. Mixed accounts or historically grown collective accounts quickly lead to problems here – especially in the group.
A consistent group chart of accounts ensures that subtotals can be formed correctly and that the presentation remains audit-proof. The quality of subsequent evaluations stands and falls with this structure.
Dimensions as a key management tool
In addition to the chart of accounts, dimensions play a central role in Business Central. Using an additional dimension—for example, "IFRS18_Category"—you can systematically assign postings to the categories Operating, Investing, Financing, or, if applicable, Discontinued Operations.
If this dimension is mandatory, you will have a consistent database across all companies. This is particularly important for consolidated accounting. The structure is not "adjusted" during reporting, but is already created during posting.
Reporting and group structure
The actual presentation is then carried out via financial reports (account schedules). Here, the new subtotals are structured in accordance with IFRS 18. At the same time, you can continue to map local accounting standards – the same postings, but different views.
For consolidation, it is crucial that all companies are structured according to the same logic. Uniform dimensions, clean elimination accounts, and a coordinated chart of accounts are prerequisites for functioning consolidated financial statements.
Business Central provides the tools – but the structure must be developed in a targeted manner.
Automation and process optimization
One of the key advantages of Business Central is its automation capabilities. For example, postings can be assigned to IFRS 18 categories based on rules. Check routines ensure that no postings are made without the correct dimension. Financial reports can be prepared and standardized in terms of structure.
This reduces your manual effort, minimizes sources of error, and significantly improves data quality.
Individual developments as a strategic lever
Beyond the standard functionalities, it is possible to supplement and optimize processes in a targeted manner through individual developments. These include adjustments to the program code, extensions to the booking logic, or specific validation mechanisms.
However, such extensions do not arise by chance, but are designed in a structured manner. The goal is to seamlessly integrate IFRS 18 requirements into existing processes while achieving efficiency gains.
Custom developments allow you to tailor Business Central precisely to the requirements of your group—instead of aligning processes to system limitations.
Our conclusion
The implementation of IFRS 18 is not purely an IT issue, nor is it purely an accounting issue. It is the interface between the two. IFRS 18 sets out clear requirements for the structure of the income statement. Business Central offers all the necessary tools—but no ready-made solution.
Only through a well-thought-out concept, a clean system structure, targeted automation, and, if necessary, individual developments can a viable and audit-proof implementation be achieved.
Get support from our experienced IT and finance experts
We work with you to develop the technical structure, design the technical implementation in your Business Central system, and support automation and custom enhancements. Our goal is to create a solution that is not only formally correct, but also practical, efficient, and audit-proof.
As an experienced consulting partner, we have extensive project experience in the conceptual and technical implementation of complex accounting requirements such as IFRS 18 in Business Central – practical, structured, and audit-proof. We support you with an eye for the big picture.
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About the author
Nicole Dyck · TEAM Lead Functional Consultant
I come from financial accounting on the customer side and am familiar not only with the figures, but also with all related processes: controlling, cost accounting, asset accounting, accruals, valuation, group accounting, and financial statement organization.
Today, I bring this broad business expertise to Business Central projects. With an eye for the big picture, not just individual bookings.
In short: Business administration degree, over 30 years of experience with Business Central, and numerous annual financial statements under my belt. (So I'm a real BC dinosaur...)
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