When a new IFRS standard applies in Nigeria
Why new IFRS Standards apply in Nigeria without separate FRC adoption, which clients IFRS 18 reaches first, and how a firm prepares them for it.
By Achekam · · 4 min read · For Accountants & audit firms in Nigeria
IFRS 18 replaces the rules on how financial statements are presented and what they disclose, and Nigerian clients reporting under full IFRS will meet it on the same date as everyone else. A finance director who asks whether the FRC must first adopt it before it applies in Nigeria is asking a reasonable question. The answer, on the IFRS Foundation's account of Nigeria's adoption, is no, and that has practical consequences for when the firm needs to start preparing.
This article explains why a new standard applies without a separate Nigerian step, which clients IFRS 18 reaches, and how a firm can organise the preparation across its client list.
A 2010 decision that covered later standards
The IFRS Foundation's jurisdiction profile for Nigeria states that on 28 July 2010 the Nigerian Federal Executive Council approved 1 January 2012 as the effective date for adoption of IFRS Standards in Nigeria. The profile adds that this action covered not only the IFRS Standards then issued but also all new and amended IFRS Standards issued subsequently, so specific endorsement of each new or amended Standard is not needed.
The profile was last updated on 16 June 2016, so it is the IFRS Foundation's description as at that date. A firm should keep an eye on FRC pronouncements for anything that changes the position, but on the profile's account a new Standard such as IFRS 18 needs no separate Nigerian adoption to take effect.
The FRC's statutory authority
The same profile states that the Financial Reporting Council of Nigeria, established by the Financial Reporting Council of Nigeria Act, 2011, has statutory authority to establish financial reporting standards for all public interest entities. The FRC has, in the profile's words, adopted IFRS Standards and the IFRS for SMEs Standard. That is why IFRS applies in Nigeria through the FRC's authority rather than through a statute that reproduces each Standard.
Which Nigerian clients IFRS 18 reaches first
IFRS 18 Presentation and Disclosure in Financial Statements is effective for annual reporting periods beginning on or after 1 January 2027, with earlier application permitted. The IASB issued it in April 2024. Its page on the IFRS Foundation's site is the place to read the Standard's requirements and supporting material.
IFRS 18 is part of full IFRS Accounting Standards, so it reaches the clients that report under full IFRS. IFRS has been mandatory for Nigerian listed and other publicly accountable entities since 1 January 2012, and the IFRS Foundation's profile describes "public interest entities" broadly: quoted and unquoted companies, governments and government organisations, and not-for-profit entities required by law to file returns with regulatory authorities. SMEs, by contrast, are required to apply IFRS for SMEs, a separate Standard.
A worked example in words. A client with a 31 December year-end reporting under full IFRS first applies IFRS 18 for the year beginning 1 January 2027. Its first IFRS 18 statements are therefore those for the year ending 31 December 2027, unless it chooses to apply the Standard earlier. A client with a 30 June year-end first applies it for the year beginning 1 July 2027. The firm's preparation work should therefore start well before those years begin, not when the statements are drafted.
Recording each client's framework in Achekam
The first step is knowing which clients are affected. Each client's profile in Achekam has a Jurisdiction section with the client's own country and identifiers, and each Nigerian engagement shows its governing basis of regulator, standards, framework, company law and tax authority. A jurisdiction override is decided by a different person.
Recording the framework there, client by client, turns the question "which of our clients does IFRS 18 affect?" into a list rather than a memory exercise. A workspace registered as Nigerian at sign-up makes the Nigeria pack, NG_FRC_2026, its default and, on activation, sets the naira and the Africa/Lagos time zone unless already set; the pack set-up is described in setting up the Nigeria or Kenya pack.
On presentation, Achekam lets a firm add its own statement lines and groups and change the wording of any row title, and later builds keep those choices. Each custom line still totals into a standard line, so notes and cash flow stay consistent. Whether that is enough for a given client's IFRS 18 presentation is a judgement to make on a trial set, well before the first IFRS 18 year-end; the new subtotals themselves are discussed in IFRS 18's new profit subtotals.
Keeping a manual watch on effective dates
Achekam does not pull a live feed of standards and regulatory changes; its Standards & Regulatory Updates page shows what its knowledge base records. So the firm keeps its own watch:
- Keep a short register of IASB Standards and amendments with their effective dates.
- Check the IFRS Foundation's site, and FRC announcements, on a fixed day each quarter.
- For each new item, list the clients whose framework it reaches, using the framework recorded on each client's profile.
- Plan the client conversations for the year before the effective date.
| Client type | Framework | Reached by IFRS 18 from |
|---|---|---|
| Listed and other publicly accountable entities | Full IFRS | Periods beginning on or after 1 January 2027 |
| Other public interest entities on full IFRS | Full IFRS | The same date |
| SMEs | IFRS for SMEs | Not through IFRS 18 itself |
Clients on full IFRS should hear about IFRS 18 from their accountant before they hear about it from their auditors or lenders. The framework question for smaller clients is covered in the Nigerian SME financial reporting framework.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
