19/02/2026
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MFRS 18 : A New Standard for Revamping Financial Performance
The Malaysian Accounting Standards Board (MASB) introduced the MFRS 18 “Presentation and Disclosure in Financial Statements” on June 14, 2024. This new standard will replace MFRS 101, significantly altering how entities present financial information, especially in the statement of profit or loss. The change is part of a broader initiative to enhance transparency, comparability, and the overall quality of financial reporting.
MFRS 18 aligns with the international IFRS 18 and introduces more structured requirements for presenting key financial subtotals, such as operating profit, which had previously been inconsistently reported across different entities.
The standard emphasizes greater consistency in how income and expenses are classified and how management-defined performance measures are disclosed. This shift aims to give investors clearer, more comparable insights into companies’ financial health.
Key updates in MFRS 18 include stricter rules for aggregating and disaggregating financial data to ensure material differences are clearly reported. It also offers entities flexibility in presenting expenses either by nature, by function, or a combination of both, depending on what best suits their operations. This is expected to facilitate more accurate and meaningful financial disclosures.
- the classification of income and expenses in the statement of profit or loss
- the presentation of subtotals in the statement of profit or loss, and
- the aggregation and disaggregation of information presented in the primary financial statements or disclosed in the notes.
MFRS 18 is set to take effect from January 1, 2027, with early adoption permitted. The standard will need to be applied retrospectively, meaning companies must restate their comparative financial information when implementing the new rules.
Sources : Crowe Malaysia, Grant Thorton Malaysia
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