South African finance teams involved in corporate reporting should take note of a new SAICA consultation linked to IFRS 18. SAICA is proposing amendments to its Headline Earnings Circular to align the guidance with the presentation and disclosure requirements introduced by IFRS 18. Comments on the exposure draft are due on 13 October 2026, according to SAICA’s technical update.

This is a proposal, not a final change to the reporting requirements. However, it signals that organisations will need to consider how new financial statement presentation requirements could affect performance measures, reporting processes and communications with stakeholders.

What is changing under IFRS 18?

IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1 and applies to annual reporting periods beginning on or after 1 January 2027, with earlier application permitted. The standard introduces new presentation requirements, including defined subtotals such as operating profit, as well as disclosures about management-defined performance measures. These measures are subtotals of income and expenses that are not specified by IFRS Accounting Standards but are used in public communications to explain management’s view of financial performance. The IFRS Foundation’s official overview provides further detail.

Headline earnings is a South African performance measure used in corporate reporting. SAICA’s proposed amendments are intended to help align the related guidance with the new presentation and disclosure framework. The precise final effect will depend on the consultation process and any amendments ultimately issued.

Who should pay attention?

The immediate impact is likely to be greatest for listed entities, larger groups and finance teams responsible for investor-facing reporting. Audit committees, financial reporting specialists and external auditors should also monitor the consultation outcome.

Smaller private companies may not be directly required to apply every aspect of headline earnings guidance. Nevertheless, businesses that prepare group reporting packs, use adjusted performance measures in funding discussions or provide financial information to investors should consider whether their current measures are clearly defined and consistently calculated.

What businesses should check

  • Identify the performance measures used in annual reports, management accounts, board packs and lender communications.
  • Document how adjusted earnings, operating profit and other non-IFRS measures are calculated.
  • Check whether exclusions and adjustments are applied consistently from one reporting period to the next.
  • Review whether supporting reconciliations and explanations are sufficiently clear for directors, auditors and users of the financial statements.
  • Confirm which entities in the group will first be affected by IFRS 18 based on their reporting periods.

Practical next steps

Finance teams should not wait until the first IFRS 18-compliant annual financial statements are due. Start by creating an inventory of reported performance measures and mapping each measure to the underlying general ledger accounts and reporting processes. This can highlight inconsistent definitions, manual adjustments or gaps in supporting documentation.

Companies affected by the SAICA consultation should review the exposure draft and submit comments through the process identified by SAICA by 13 October 2026. Other businesses can use the consultation as an early reminder to strengthen their reporting controls and discuss IFRS 18 readiness with their accountant or auditor.

For support with financial reporting processes, management accounts and accounting controls, explore Your Financial Partner’s accounting and advisory services.