New accounting updates focus heavily on technology (AI, blockchain, cloud), new IFRS/Ind AS standards (IFRS 18 for presentation, SME updates), and increased focus on ESG disclosures, materiality, and clearer financial reporting for clarity, shifting accountants towards strategic roles. Key changes involve enhanced disclosure for supplier finance, clearer profit/loss presentation (IFRS 18), and defining “material” policies, all driven by evolving regulatory needs and investor demands.
Key Updates & Trends
- Technology Integration:
- AI & Automation: Increased use of AI for forecasting, data entry, and automation, moving accountants to advisory roles.
- Blockchain: For enhanced audit trails and transparency.
- Cloud Accounting: Continued shift to cloud-based systems for accessibility.
- International Standards (IFRS/IASB):
- IFRS 18 (Presentation): Effective 2026, standardizes profit/loss presentation, introduces specified subtotals (operating profit, PBIT), clarifies cash flow for interest/dividends, and enhances disclosure.
- IFRS for SMEs Update: Major revisions to revenue recognition, fair value, and business combinations for small/medium entities.
- IFRS 9/7 Amendments: Guidance on ESG-linked financial instruments and electronic payment settlements.
- Rate-Regulated Activities (Future): New standard expected in 2026 for utilities, effective 2029, for clearer reporting.
- Focus on Disclosures & Materiality:
- Material Accounting Policy Information: Companies must disclose policies that impact user decisions, replacing the vague “significant” policies.
- Enhanced Disclosures: More detail required for supplier finance programs (ASU 2022-04) and ESG-related financial instruments.
- Regulatory & Practical Shifts:
- ESG Reporting: Growing regulatory pressure for climate and sustainability disclosures.
- Real-Time Payments: Accounting systems adapting to faster transaction speeds.
What Accountants Need to Do
- Prepare for IFRS 18: Reassess income statement classification and system impacts.
- Master AI Tools: Embrace new tech for efficiency.
- Deepen ESG Knowledge: Understand climate-related financial disclosures.
- Focus on Materiality: Apply the new definition to disclosures.
- Stay Updated: Follow FASB, IASB, and local standards (like Ind AS in India) for specific changes.