Dear Reader,

My personal story today is not about how to succeed. It is about how not to lose yourself after you have achieved success.

A decade ago, I found myself in an accounting team of a German corporation. Soon after I started, I was given an impossible task: to prepare a comprehensive slide deck for the Audit Committee.

The presentation should have wrapped up all important accounting and legal topics of a quarter. The task also involved communication and word-battles among multiple stakeholders, most of them at a management level. Needless to say, all in a language I was by no means proficient in. My German could pass for an episode of a home renovation show, but not for high-stakes professional communication. People who gave me the task might have been "lebensmüde" ("there is nothing more to lose").

Despite the tears of frustration and shame, I ground hard and eventually mastered the game. Surprisingly, I rose through the ranks of what it meant to be "successful" in that environment. I was doing great. And unfortunately, I started to believe it a little too much.

I became comfortable. Slightly arrogant even. Laid back.

I remember the day when my then-boss went white with fury as I came to the meeting with Audit Committee members just on time, with no printouts ready. I did not extend enough care to come early and print out the decks. An intern — who appeared an hour earlier than needed — saved the situation. He was motivated. I was too good to care.

That incident was the first step down towards change. I left the company after one more year in that role. Not because I had to. I still received great reviews; I was still a success. But I needed to hit rock bottom to get my values straight. Too much comfort and praise was not good for me. Something new was ahead.

What is ahead for IFRS preparers — and something you should not postpone anymore — is getting ready for new disclosures under IFRS 18 Presentation and Disclosure in Financial Statements. One of them — paragraph 83 — has been the subject of an IFRIC submission named Scope of the Requirement to Disclose Expenses by Nature. I wrote about it in my Thursday's post — a short summary can be found on LinkedIn in case you missed it: https://shorturl.at/MAhmq

A note under IFRS 18.83 requires disclosure of:

i) The totals of specified expense categories by nature, in particular:

- Depreciation expense for the period for property, plant & equipment under IAS 16, investment property under IAS 40 and right-of-use assets under IFRS 16;

- Amortisation expense for the period for intangible assets under IAS 38;

- Expense for the period for emplyoee benefits (IAS 19) and services; received from employees which are entitled to share-based payments under IFRS 2;

- Impairment losses and reversals of impairment losses for the period disclosed in accordance with IAS 36; and

- Write-downs and reversals of write-downs of inventories as disclosed in accordance with IAS 2;

ii) Reconciliation of those totals to each operating category line item, and

iii) Identification of any amounts outside the operating category.

How this requirement looks like in a real-world example can be illustrated by using the Annual Report 2025 of BMW Group. BMW presents expenses in its operating category using a function-of-expense format, categorizing operating expenses into: i) Cost of sales (including research and development expenses), ii) Selling & administrative expenses and, iii) Other operating income and expenses. (in the Notes 08-10 of Group Financial Statements 2025)

In the first step, BMW will list totals of specified nature expenses, such as amortization of intangible assets (IFRS 18.83 a) (ii)):

BMW presents that current-year 2025 amortization for intangible assets totals € 3,304 million as stated in the Note 20 of its Annual Report 2025:

- Amortisation of development costs (€ 1,956m) is included in within research and development expenses, which form part of cost of sales;

- Amortisation of other intangible assets (€ 1,348m) is included primarily in cost of sales;

- No amortization is included in line items outside the operating category;

- No impairment losses or reversals on intangible assets were recognized in 2025.

The second step in accordance with paragraph 83 of IFRS 18 is to establish the link between those totals (par. 83 (a)) to line items in the operating category of expenses or outside this category (IFRS 18.83 (b) (i) and (ii)):

Illustrated on totals for employee benefits at BMW Group 2025 - allocation to operating line items:

Employee benefits are distributed across cost of sales (manufacturing and financial services personnel), selling and administrative expenses (commercial, IT, marketing personnel), and research and development expenses (included within cost of sales). The BMW Group does not separately quantify the split between individual income statement line items in the notes. In this regard: IFRS 18 is effective for periods beginning on or after January 1st, 2027.

Identification of line items outside operating category:

No employee benefit expense is included in line items outside the operating category.

Tip: Preparation of a disclosure note is a great use case of LLM (Large Language Model) in the process of getting your financials ready for IFRS 18. My tips for prompting: i) Control inputs (upload proven reports, upload or copy extracts of the latest IFRS standards, restrict exact pages to select from for both public and, if applicable, internal documents); ii) Ask for referenced outputs to be able to track and check the outcome manually and iii) Perform a completeness check by asking which information might have been omitted and why.

Tariffs, Tariffs

In February 2026 the US Supreme Court held that tariffs imposed by the US President to target "drug influx from Mexico" and "US trade deficit" are illegal and shall be refunded.

The Consolidated Administration and Processing of Entries, or CAPE, which processes the refunds, opens for refund applications on Monday, 20 April 2026.

For entities, this is good news connected with uncertainty and the necessity to exercise judgement. In particular, entities shall consider disclosure of a contingent asset in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

A well-summarized accounting implications and areas of judgement can be found in this article by KPMG:

https://kpmg.com/xx/en/our-insights/ifrg/2026/frut-import-tariff-refunds.html

I wish you a great accounting week.

Best,

Barbora