Redefining the Income Statement: A Critical Literature Review of IFRS 18 and Global Financial Statement Comparability

The global financial reporting landscape is currently undergoing a transformative shift with the issuance of IFRS 18: Presentation and Disclosure in Financial Statements, which replaces the long-standing IAS 1. This new standard addresses critical deficiencies in income statement consistency and the proliferation of non-GAAP measures that have historically hindered investor transparency. The purpose of this critical literature review is to synthesize the emerging discourse on IFRS 18 and evaluate its capacity to enhance global financial statement comparability. Utilizing a qualitative narrative synthesis of 17 impactful sources, the review benchmarks the prospective mandates of IFRS 18 against longitudinal evidence from previous major transitions, such as IFRS 15, 16, and 17. The findings are organized into four primary themes: the structural standardization of subtotals, the formal regulation of management-defined performance measures, the institutional determinants of reporting quality, and the practical barriers to regional implementation. The synthesis reveals that while IFRS 18 provides a superior technical framework for "apples-to-apples" performance benchmarking, its ultimate efficacy is moderated by the strength of local legal enforcement and the mitigation of country-specific modifications. This review contributes to the field by providing a conceptual roadmap for regulators and practitioners, highlighting that structural uniformity is a prerequisite for, but not a guarantee of, true global comparability.

Accounting

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