IFRS Updates 2025-26: Key Takeaways for Irish Firms

The latest IFRS standards Ireland is bringing major changes to how businesses report their finances. Starting in 2026, Irish businesses will need to ensure their financial systems and processes fully comply with the updated IFRS and FRS 102 standards, affecting lease accounting, revenue recognition and financial instruments. These changes will significantly impact financial reporting, requiring careful planning and adaptation.

Understanding how latest IFRS changes affect Irish businesses is crucial for staying compliant and competitive. These updates align Irish accounting with global standards, creating both challenges and opportunities for organisations. This guide explains what changed & what to do.

These IFRS updates remain relevant for both the 2026 and 2027 reporting periods, with a continued focus on consistent application and high-quality disclosures.

Is IFRS used in Ireland?

Yes, IFRS is widely used across Ireland. Listed companies must follow full IFRS accounting standards Ireland for their financial statements. Meanwhile, many small and medium-sized businesses use FRS 102, which aligns with IFRS for SMEs Ireland principles.

The Irish accounting landscape relies heavily on international standards. This alignment ensures consistency and comparability across markets. Companies reporting for the 2026 financial year now operate under the amended version of FRS 102, effective for accounting periods beginning on or after 1 January 2026.

Overview of IASB IFRS updates relevant to Ireland

The International Accounting Standards Board (IASB) continues developing new standards. IASB IFRS changes introduced during 2025–2026 focus on enhancing transparency, comparability, and disclosure quality. Key developments include IFRS 18 and IFRS 19, both effective from January 2027.

These standards aim to enhance financial reporting improvements Ireland by providing clearer guidance on presentation and disclosure requirements. Early adoption is permitted, giving companies flexibility in implementation timing.

In addition to specific standard-level amendments, Irish firms should also be aware of broader IFRS reporting priorities as they move into the 2026 and 2027 reporting cycles.

IFRS Outlook for 2026

Looking ahead to 2026, the IASB has signalled a continued focus on improving disclosure effectiveness, consistent application of existing standards, and post-implementation reviews rather than introducing significant new standards. For Irish firms, this means greater scrutiny on judgement, assumptions, and clarity in financial reporting rather than wholesale changes to accounting frameworks.

See related post : Navigating Accounting in Ireland

What is FRS 102?

FRS 102 is the predominant accounting standard for Irish SMEs. It provides a simplified framework compared to full IFRS while maintaining high-quality reporting standards. The FRS 102 standard applies to thousands of businesses across Ireland.

FRS 102 latest version and key changes

The FRS 102 latest version was released in March 2024 by the UK Financial Reporting Council (FRC). These amendments are now effective from 1 January 2026, representing the second periodic review since the standard’s introduction in 2013.

Companies are now required to implement these updates for their 2026 financial statements, although early adoption was permitted if all amendments were applied simultaneously.

FRS 102 requirements overview

The updated FRS 102 requirements focus on three main areas:

1. Lease accounting alignment with IFRS 16 principles
2. Revenue recognition following IFRS 15 framework
3. Enhanced disclosures for various accounting topics

These changes bring FRS 102 guidance closer to international standards while avoiding unnecessary complexity for smaller businesses.

Major changes in IFRS Ireland

Unless otherwise stated, these amendments apply to the 2026 reporting period onward and are expected to remain relevant until further IASB updates are issued.

1. FRS 102 updates Ireland: Lease accounting transformation

The most significant change involves IFRS 16 lease accounting Ireland principles. From 2026, all lessees under FRS 102 must recognise leases on the balance sheet. The new model eliminates the distinction between finance and operating leases for lessees.

Key changes:

• All leases must be recognised on the balance sheet.
• Companies record right-of-use (ROU) assets and lease liabilities.
• Exceptions exist for short-term and low-value leases.
• Depreciation replaces straight-line rent expense.

Impact on financial statements:

Businesses should review their lease agreements and update accounting systems to recognise all leases on the balance sheet under the new FRS 102 lease model for 2026 reporting.

2. Revenue recognition: IFRS 15 for SMEs

The FRS 102 updates introduce the five-step model from IFRS 15, now effective for accounting periods beginning on or after 1 January 2026. This brings consistency to how companies recognise revenue from contracts with customers.

The Five-step model:

This represents a fundamental shift in IFRS 15 revenue recognition Ireland practices. Companies with complex contracts must carefully analyse their arrangements to determine proper timing.

Companies with complex sales contracts must carefully evaluate performance obligations under the new revenue recognition model.

3. Financial instruments changes

The FRS 102 amendments remove the option to apply IAS 39 recognition principles for new adopters. Entities already using IAS 39 can continue, but new entities must follow updated FRS 102 guidance. This requirement is now in full effect from 2026 onward.

This change affects how businesses measure and report financial instruments. Companies need robust processes for classification and measurement decisions.

Financial institutions need to adjust their classification and measurement processes for financial instruments in line with updated IFRS requirements.

4. Fair value measurement standards

A new Section 2A introduces comprehensive fair value measurement guidance. This section is now active for reporting periods beginning on or after 1 January 2026, aligning with IFRS 13 principles.

The guidance covers:

• Fair value hierarchy definitions.
• Valuation techniques and inputs.
• Disclosure requirements.

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Guide to new IFRS Standards for businesses in Ireland

IFRS 18: Presentation and disclosure

IFRS 18 supersedes IAS 1 for periods starting 1 January 2027. The standard introduces a more structured statement of profit or loss with defined categories and enhanced aggregation guidance.

Major Features:

• Operating profit definition: Clear guidance on classifying items
• Management performance measures: New disclosure requirements for MPMs
• Expense analysis: Additional disclosures when presenting by function
• Enhanced comparability: Standardised presentation across entities

Companies applying full IFRS accounting standards Ireland must prepare for these presentation changes. The standard requires retrospective application with detailed reconciliation in the adoption year.

IFRS 19: Subsidiary financial statements

IFRS 19 offers eligible subsidiaries a simplified disclosure framework. This voluntary standard reduces reporting burden while maintaining IFRS compliance.

Eligibility criteria:

1. Entity must be a subsidiary
2. Cannot have public accountability

Key benefits:

• Reduced disclosure requirements
• Maintained IFRS compliance
• Lower preparation costs
• Streamlined reporting process

Subsidiaries considering IFRS 19 should evaluate cost-benefit implications carefully. The standard provides relief from extensive disclosures while preserving financial statement quality.

Additional FRS 102 Financial Reporting changes

Supplier finance arrangements

New Section 7 disclosures require companies to explain supplier financing arrangements. This includes impact on financial position and cash flows. These requirements take effect 1 January 2025.

Uncertain tax treatments

Section 29 now includes guidance aligning with IFRIC 23 principles. Companies must evaluate uncertain tax positions and determine appropriate recognition and measurement approaches.

Share-based payments

Enhanced Section 26 guidance covers:

• Vesting condition accounting
• Fair value determination methods
• Payments with cash alternatives

Going concern disclosures

Section 3 requires management to affirm consideration of future information. Companies must disclose significant judgements about going concern status.

Business combinations

Updated Section 19 provides clearer guidance on identifying acquirers in business combinations. This aligns with IFRS 3 principles.

Impact analysis: What is the impact of IFRS?

Financial statement effects

The IFRS impact on Irish businesses varies by sector and size. Companies with significant leases or complex revenue arrangements face the biggest changes.

Key impacts:

Operational implications

Changes to IFRS Ireland extend beyond accounting. Companies need updated systems, processes and controls to capture required information.

Required capabilities:

• Contract management systems for lease and revenue data.
• Discount rate calculations for lease accounting.
• Performance obligation tracking for revenue.
• Enhanced financial modelling capabilities.

Industry-specific considerations

Certain sectors face unique challenges:

Retail and hospitality:

• Extensive lease portfolios require significant work
• Store and property leases affect balance sheets materially
• ROU asset depreciation changes expense patterns

Technology and software:

• Complex licensing and subscription arrangements
• IFRS 15 for SMEs significantly impacts revenue timing
• Multi-element contracts require careful analysis

Manufacturing and distribution:

• Equipment leases and facility rentals
• Warranty and service contract accounting
• Variable consideration in sales agreements

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When did the most recent changes to IFRS 15 become effective?

IFRS 15 originally became effective for annual periods beginning on or after 1 January 2018. However, the incorporation of IFRS 15 revenue recognition standard principles into FRS 102 takes effect 1 January 2026.

Irish SMEs using FRS 102 have additional time to implement the five-step revenue model. This delayed timeline allows smaller businesses to learn from larger companies’ implementation experiences.

Early adoption is permitted if companies apply all FRS 102 amendments together. This flexibility helps businesses align implementation with strategic priorities.

Preparing for IFRS updates in Ireland 2025

Step 1: Impact assessment

Companies should conduct thorough assessments of how changes affect their specific circumstances. This includes reviewing lease portfolios, revenue contracts and financial instruments.

Assessment checklist:

• Inventory all lease agreements
• Catalogue revenue contracts and terms
• Review financial instruments portfolio
• Identify supplier finance arrangements
• Evaluate uncertain tax positions

Step 2: System and process updates

Implementing changes requires robust systems and processes. Companies need capabilities to capture contractual terms, perform calculations, and generate required disclosures.

Technology requirements:

Step 3: Financial analysis and planning

Companies must understand impacts on key metrics and covenant compliance. This requires detailed financial modelling and scenario analysis.

Key metrics to analyse:

• EBITDA changes from lease accounting
• Debt ratios including lease liabilities
• Revenue timing under new recognition rules
• Cash flow presentation differences

Step 4: Stakeholder communication

Clear communication with lenders, investors and other stakeholders is essential. Explain expected changes and manage expectations around financial metric movements.

Step 5: Training and development

Finance teams need comprehensive training on new requirements. This ensures accurate implementation and ongoing compliance.

Training topics:

• Lease identification and measurement
• Five-step revenue model application
• Fair value measurement techniques
• Enhanced disclosure preparation

Practical Impact of IFRS Updates on Irish Firms

• Loan covenant classification
• Lease accounting implications
• Disclosure quality expectations
• Audit and group reporting readiness

Irish firms should always refer to the latest IASB publications and auditor guidance when applying IFRS updates.

Role of Financial Accounting Advisory Service

Many businesses benefit from external financial accounting advisory service support during transition. Professional advisers provide expertise in interpreting and applying complex standards.

Advisory services include:

• Impact assessments and gap analysis
• Policy development and documentation
• System implementation support
• Training and knowledge transfer
• Ongoing technical accounting support

Engaging advisers early helps companies avoid implementation pitfalls and ensure smooth transitions.

IFRS Sustainability Reporting Ireland

Beyond traditional financial reporting, IFRS sustainability reporting is gaining more importance. The International Sustainability Standards Board (ISSB) issued IFRS S1 and IFRS S2 effective from 2024, and the EU Corporate Sustainability Reporting Directive (CSRD) now applies from the 2025 financial year onward for large Irish companies. This means many Irish entities must begin sustainability reporting for their 2026 reporting period.

While smaller entities are not yet mandated, wider adoption of IFRS S1/S2 is expected by 2027, with gradual alignment under EU and Irish implementation frameworks.

Understanding these differences helps companies choose appropriate frameworks and prepare for potential future changes.

IFRS Audit considerations

The changes to IFRS Ireland create implications for IFRS audit processes. Auditors must evaluate management’s judgements and verify compliance with
new requirements.

Audit focus areas:

Companies should discuss implementation plans with auditors early. This ensures alignment on interpretation and documentation requirements.

Practical impact of IFRS amendments on Irish SMEs

Cost considerations

Implementing changes involves costs for:

• System upgrades and new software
• External advisory support
• Staff training and development
• Additional audit fees

Smaller businesses may find costs disproportionately high relative to size. Planning and budgeting for these expenses is crucial.

Benefit realisation

Despite costs, the updates bring benefits:

• Improved financial information quality
• Enhanced comparability with peers
• Better stakeholder understanding
• Alignment with global standards

Timing strategy

Companies should develop clear implementation timelines. Consider:

• Early adoption for competitive advantage
• Phased approach for complex changes
• Coordination with other business initiatives
• Adequate testing and validation time

IFRS Financial statements: Enhanced quality

The changes ultimately improve IFRS financial statements quality. Enhanced disclosures provide stakeholders with better information for decision-making.

Quality improvements:

• Greater transparency on lease commitments
• Clearer revenue recognition policies
• Consistent fair value measurements
• Comprehensive performance metrics

These improvements benefit investors, lenders, and other users of financial statements.

What are the common pitfalls and how to avoid them?

Failing to address the updates properly can lead to material errors, restatements, and audit qualifications.

Future outlook

Beyond the immediate changes of FRS 102 (2026) and IFRS 18/19 (2027), Irish businesses must monitor ongoing developments from the IASB and related regulatory bodies:

• IFRS Sustainability Reporting developments under ISSB and CSRD will increasingly affect large and medium-sized Irish companies.
• IFRS 17 Insurance Contracts: Effective from 2023, IFRS 17 replaces IFRS 4 with a unified approach to insurance accounting. It introduces current value measurements, risk adjustments, and new disclosure obligations, significantly impacting insurers and related entities.
• IASB continues post-implementation reviews of IFRS 9 and IFRS 16 during 2026, potentially leading to clarifying amendments thereafter.

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Conclusion

The impact of latest IFRS updates on Irish businesses is substantial and far-reaching. From FRS 102 amendments effective in 2026 to IFRS 18 and 19 impacting listed companies from 2027, organisations face significant changes.

Understanding how latest IFRS changes affect Irish businesses helps companies prepare effectively. The guide to new IFRS standards for businesses Ireland emphasises the importance of early planning and systematic implementation.

As of 2026, Irish entities must ensure compliance with revised FRS 102 and begin preparing for IFRS 18, IFRS 19, and sustainability-disclosure obligations under CSRD and ISSB reporting frameworks.

Companies should begin preparing now for these financial reporting standards Ireland changes. Conducting thorough assessments, updating systems, training staff and engaging advisers ensures successful transitions.

The practical impact of IFRS amendments on Irish SMEs includes both challenges and opportunities. While implementation requires investment, the resulting improvements in financial reporting quality benefit all stakeholders.

By following this overview of IASB IFRS updates relevant to Ireland and taking proactive steps, businesses can successfully navigate these changes and emerge with stronger financial reporting capabilities.

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