"61% of Companies Report Impact on 'Management Profit and Loss and Performance Measurement Systems' Due to IFRS18 Implementation"

Domestic companies have been found to be inadequately prepared ahead of the introduction of the International Financial Reporting Standard IFRS 18 'Statement of Financial Performance and Disclosures.'

Global accounting and consulting firm EY Hanyoung announced on the 14th, "According to a survey conducted on the 6th, 61% of corporate executives and audit committee members expected that the 'management profit and loss and performance measurement-related processes and systems' would be most significantly affected by the introduction of IFRS 18." The survey was conducted with a total of 167 corporate stakeholders, including 52% from companies with assets exceeding 2 trillion won and 48% from companies with assets below 2 trillion won.

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IFRS 18, which will be implemented from 2027, is expected to bring changes to the basic structure of financial statements by introducing subtotal categories within the income statement and changing the method of measuring operating profit and loss. 88% of respondents believed that these changes would impact financial closing processes and systems.

Although the mandatory disclosure and certification of sustainability information are expected to be gradually introduced after 2026, only 44% of companies responded that they were prepared for this. There was a significant gap in preparedness between companies with assets over 2 trillion won (51%) and those with assets under 2 trillion won (18%).

The reasons for inadequate preparation included the absence of specialized organizations and lack of experts (55%), lack of processes and systems (49%), and insufficient impact analysis of regulatory and standard changes (35%). 91% of respondents answered that the establishment of an integrated management system for sustainability reporting is necessary.

Oh Chang-taek, Head of Financial and Accounting Advisory Services at EY Hanyoung's Audit Division, said, "IFRS 18 and sustainability information disclosure are important turning points that will directly affect companies," adding, "From a long-term perspective, it is necessary to strengthen disclosure infrastructure and establish a systematic information management system."

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