8 September 2026
By:
Katie Shannon,
Partner, Authorised Translator (Swedish to English)
For listed companies reporting under IFRS, 2027 is not a distant deadline. It is the year IFRS 18 becomes mandatory, and companies need to start preparing now – including translation and terminology updates.
IFRS 18 Presentation and Disclosure in Financial Statements was published by the International Accounting Standards Board (IASB) in April 2024. It replaces IAS 1 for annual reporting periods beginning on or after 1 January 2027, with retrospective application required – meaning companies with a December year-end will need to restate their 2026 comparative figures under the new rules.
What changes structurally
For those who are less familiar with the details of the new standard, the core change is a fundamental restructuring of the income statement. Under IAS 1, companies had considerable flexibility in how they presented their income and expenses. IFRS 18 replaces that flexibility with a defined structure, requiring all income and expenses to be classified into five categories: operating, investing, financing, income taxes and discontinued operations.
The three newly defined categories – operating, investing and financing – form the backbone of the new structure. Two new mandatory subtotals must be presented: operating profit or loss and profit or loss before financing and income taxes. The first of these is arguably the most significant change: for the first time under IFRS, operating profit becomes a defined term, not one that each company can interpret and present in its own way.
IFRS 18 also introduces mandatory disclosure requirements for management-defined performance measures (MPMs), meaning metrics, such as adjusted EBITDA or adjusted operating profit, that companies use in their external communications. Where these measures are used, they must now be disclosed in the financial statements and reconciled back to IFRS-defined totals.
The terminology challenge
For companies reporting in both Swedish and English, IFRS 18 brings a terminology challenge that is easy to underestimate. The standard introduces new terms, redefines existing ones and in some cases replaces terminology that has been in use for decades. Getting this right in both languages – and getting it right consistently – matters even more under IFRS 18 than it did under IAS 1, precisely because the standard places greater emphasis on defined terms and structured labelling.
In English, the terminology is set by the standard itself. Operating profit or loss, profit or loss before financing and income taxes and management-defined performance measures are not suggestions. They are the terms the standard uses, and financial statements are expected to reflect them.
In Swedish, things are somewhat more nuanced. Swedish accounting bodies and major advisory firms have been working through the terminology, and certain translations are becoming established: rörelseresultat for operating profit, resultat före finansiering och inkomstskatt for profit before financing and income taxes, and resultatmått definierade av företagsledningen or the abbreviated MPM for management-defined performance measures. But Sweden lacks a single regulatory body that formally mandates translated IFRS terminology in the same way the English standard does, which means variation is possible – and variation is where challenges arise.
The case for a terminology strategy
This is where we see an opportunity that many companies have not yet fully considered. The question is not only how to translate the new IFRS 18 terms into Swedish – it is how to apply those translations consistently across every document your company produces, in both languages.
Consider the typical workflow for a listed company. The annual report may be drafted primarily in Swedish, translated into English, and then reviewed and adjusted. Press releases, interim reports and investor relations materials may follow different paths. Management’s commentary on the company’s operating performance – now subject to MPM disclosure requirements – may be prepared in English first, or in Swedish, depending on who is writing it.
In each of these scenarios, the terminology choices made in one document become the reference point for subsequent documents. If operating profit is rendered as rörelseresultat in one place and rörelsens resultat in another, the inconsistency will eventually surface – in an investor presentation, in a translation query or in an audit review of MPM disclosures.
It is often the translator who spots this first. Working through a Swedish source text with an eye to consistent English terminology has a way of surfacing inconsistencies in the source text – two terms used for what should be a single concept, or one term applied inconsistently to two genuinely distinct things. The translator cannot resolve this alone; only the client knows which reading was intended.
Our strong recommendation is to agree on your Swedish IFRS 18 terminology, as far as possible, before your 2026 comparative figures are finalised, and to document those choices in a way that everyone working on your financial communications can access. This applies not just to your finance and IR teams, but to your auditors, your communication agency, your legal advisers and your translators.
When we work on a company’s financial reports, we maintain consistent terminology across every document we handle. Where we notice an inconsistency in the source text, we flag it to the client/agency rather than resolving it silently. Under IFRS 18, that kind of continuity becomes more valuable, not less – because the new standard makes defined terms mandatory and comparability across periods a reporting requirement.
A practical starting point
The new IFRS 18 terms to lock down in Swedish include, at a minimum: the five income statement categories (rörelse, investering, finansiering, inkomstskatt and avvecklad verksamhet), the two mandatory subtotals (rörelseresultat and resultat före finansiering och inkomstskatt), and your company’s specific MPMs (how you will describe them in Swedish when they appear in regulated documents and how you want them translated to English).
For companies that use alternative performance measures extensively in their investor communications, the MPM disclosure requirement will generate new text – explanations, reconciliations, labels and so forth – that will need to be consistent in both languages. That is new territory for many IR teams, and it is worth planning for it in advance rather than playing catch up while working to meet your reporting deadlines.
Are you ready?
It is tempting to treat IFRS 18 as a 2027 problem. But the effective date alone doesn’t tell the full story. With retrospective application required, comparative figures for 2026 will need to sit alongside the first IFRS 18-compliant statements, which makes early preparation valuable well before the standard formally applies. Companies that get ahead of this – with a clear, agreed and consistently applied terminology strategy – will find that first set of IFRS 18-compliant financial statements considerably easier to produce, and the comparability the standard is designed to achieve considerably easier to demonstrate.
Getting ahead of IFRS 18 is easier with the right terminology in place. Get in touch if we can help.
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