Practical accounting insight: The International Accounting Standards Board (IASB) is preparing proposed amendments to IFRS 18 that could affect the presentation and disclosure of certain government-imposed charges. The proposals are not yet final or effective, but finance teams should begin monitoring the project and consider whether their reporting processes can identify these charges separately.

The IASB discussed the matter at its meeting on 23 September 2026 and expects to publish an exposure draft during the fourth quarter of 2026. The discussion forms part of the wider implementation and maintenance work around IFRS 18 Presentation and Disclosure in Financial Statements.

What is being proposed?

The proposed amendments would require certain tax charges imposed by a government as a direct substitute for income taxes to be classified in the income taxes category of the statement of profit or loss.

For eligible subsidiaries applying IFRS 19, the IASB also tentatively agreed that entities would need to disclose the nature and amount of these charges, the basis on which they are calculated, and their effect on items included in the tax reconciliation required by IFRS 18.

These are tentative decisions rather than enacted requirements. The IASB intends to issue an exposure draft with a 120-day comment period, and the final outcome may differ from the current proposals.

Why this matters to South African finance teams

South African groups and subsidiaries reporting under IFRS may need to distinguish more clearly between ordinary income tax expense and other government charges that operate in a similar economic manner. This could affect the chart of accounts, tax reconciliations, consolidation packs and the supporting schedules prepared for annual financial statements.

The effect will depend on the final wording, the entity’s reporting framework and the nature of the charges applicable to that entity. Smaller entities using the IFRS for SMEs Accounting Standard should not assume that the IFRS 18 proposals automatically apply to them. The IFRS Foundation continues to publish separate implementation material for the third edition of the IFRS for SMEs Accounting Standard, including updated modules on income tax and related topics.

What businesses should check now

  • List government-imposed charges currently recorded within tax, operating expenses or other expense categories.
  • Confirm the legal basis and calculation method for each material charge.
  • Check whether the general ledger can report these amounts separately from normal income tax expense.
  • Review the information available for tax reconciliations and deferred tax working papers.
  • Ask the group reporting team whether current consolidation templates can accommodate additional disclosure fields.
  • Monitor the exposure draft before making changes to accounting policies or published financial statements.

Practical next steps

Finance teams should avoid treating the IASB’s tentative decisions as a current reporting requirement. Instead, use the upcoming exposure draft as an opportunity to test data quality and improve the documentation supporting tax-related balances.

Businesses with complex group structures, significant government charges or cross-border reporting obligations may benefit from an early technical review. A disciplined review now can reduce the risk of last-minute data gathering if the proposals are finalised.

For support with reporting processes, management accounts and finance administration, businesses can explore Your Financial Partner’s accounting and advisory services.