IFRS 18, future standard issued but not effective, IAS 8 para 30, disclosure of information relevant to assessing the future effect

Stora Enso Oyj – Annual report – 31 December 2025

Industry: forestry, manufacturing

Future standard changes not yet effective and not yet endorsed by the EU in 2025

• IFRS 18 Presentation and Disclosure in Financial Statements. The objective of the new IFRS 18 standard is to set out requirements for the presentation and disclosure of information in general purpose financial statements to help ensure they provide relevant information that faithfully represents an entity’s assets, liabilities, equity, income and expenses. The new Standard will give investors more transparent and comparable information about companies’ financial performance. IFRS 18 is effective for annual reporting periods beginning on or after 1 January 2027 (retrospective application is mandatory). IFRS 18 replaces current IAS 1 Presentation of Financial Statements. New standard carries forward many requirements from IAS 1 unchanged.

  • IFRS 18 introduces three sets of new requirements to improve companies’ reporting of financial performance.
  • Comparability in the income statement. IFRS 18 introduces defined categories for income and expenses – operating, investing, financing and taxes – to improve the structure of the income statement, and requires all companies to provide new defined subtotals.
  • Transparency of management-defined performance measures (often referred to as alternative performance measures). IFRS 18 requires companies to disclose explanations of company specific measures that are related to the income statement, referred to as management-defined performance measures. The new requirements will improve the discipline and transparency of management-defined performance measures.
  • Grouping of information in the financial statements. IFRS 18 sets out guidance on how to organise information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. IFRS 18 also requires companies to provide more transparency about operating expenses.
  • The Group is evaluating the impact of the new standard and expects it to have material impact on the Group’s income statement, cash flow statement, and certain notes to the consolidated financial statements. In relation to the income statement, the Group anticipates a decrease in the operating result (IFRS), primarily due to the results of associated companies being excluded from the operating result. In relation to the cash flow statement, the Group expects that the net cash from operating activities will increase (mainly due to interest paid being reclassified to financing activities). Net cash from investing activities is also expected to increase (primarily as interest and dividends received will be included in investing activities rather than operating activities). Net cash from financing activities is expected to decrease (mainly due to inclusion of interest paid).
  • Other published standards, standard amendments or interpretations are not expected to have any significant impact on the Group’s consolidated financial statements or disclosures.