Navigating IFRS 18 from an FX perspective: Why corporate treasurers need to act now
3 min to read
The new accounting standard becomes mandatory in January 2027—and it’s set to fundamentally change how foreign exchange impacts your financial statements.
While IFRS 18 may sound like just another accounting update, corporate treasurers are discovering it has real implications for how they structure hedging strategies and how their financial performance is reported and understood by investors.
At a recent seminar hosted by Nordea Markets in partnership with Deloitte, treasury professionals from leading Danish companies gathered to understand the practical impact of this change. The key message? IFRS 18 isn’t primarily an FX standard, but FX can cause visible changes to your P&L (profit and loss statement).
The fundamental shift: FX differences follow the underlying asset
Under the new standard, foreign exchange differences will no longer be neatly tucked away in financial income or expenses. Instead, FX classification will follow the underlying item or risk being managed.
“The operating profit will be different from historically. The key reason for that is FX,” explained Thomas Hjøllund Simonsen, a partner at Deloitte, who specialises in treasury-related accounting matters. “FX differences on trade receivables and payables will go to operating. FX differences on bank loans and bonds go to financing. FX differences on cash and cash equivalents go to investing.”
This creates a challenge: Even if your treasury team has perfectly hedged your FX exposure on a net basis, you may still see volatility across different P&L categories.
Pictured from left to right: Thomas Hjøllund Simonsen (Deloitte), Thomas Lindqvist Nielsen (DSV), Thomas Madsen (Nordea Markets)
Real world lessons from DSV
Thomas Lindqvist Nielsen, Director of Group Treasury at DSV, shared his company's journey navigating these changes. As a global transport and logistics company, DSV initially considered whether to implement hedge accounting to manage the new presentation requirements.
"When this topic first surfaced, the question was: do we want to do anything on the hedge accounting side? In our industry, EBIT is key—it drives all the key ratios," Nielsen explained.
After thorough analysis with external consultants, DSV concluded that for their business model—a service company with decentralised subsidiaries—hedge accounting wouldn't provide the expected benefits. "Except for the way it's presented, we're not doing anything different than we do today," Nielsen said. "We try to keep it as simple as possible."
What treasurers should do now
The standard becomes effective for annual reporting periods beginning after January 1, 2027, which means Q1 2027 interim statements will be the first impacted—including comparative figures from Q1 2026.
Key actions for treasury teams:
Engage your IFRS experts early. As Nielsen advised: "Stay calm and contact your IFRS experts."
Review your risk management policies. How you document what risks you're managing will directly impact P&L classification.
Assess your systems. Most entities will need to modify how they capture and tag FX differences to enable proper classification under the new categories.
Model the impact on key metrics. Understand how EBITDA and EBIT will be affected before stakeholders ask.
Consider your hedging strategy. Some companies may need to revisit their approach, though wholesale changes aren't always necessary.
Communicate with stakeholders. Board members, audit committees and investor relations teams all need to understand the changes.
Nordea Markets regularly hosts seminars on topics relevant to corporate treasury professionals. For more information on how IFRS 18 may impact your hedging strategy and risk assessment, contact your local Nordea representative.
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