ACCA SBR September 2026: IFRS 18 Is Now Examinable — And Most Candidates Left It Blank

IFRS 18 is now examinable in ACCA SBR — and in the September/December 2025 exam it was worth 9 marks that most candidates threw away. The examiner's verdict on the IFRS 18 requirement: many responses were "either absent or lacked any reference to IFRS 18."

What happened in the exam

Question 4 (Carroll Co) asked candidates to explain why "adjusted profit before income taxes" met the definition of a management-defined performance measure (MPM) under IFRS 18 — and why gearing did not — then outline the required disclosures. That was 7 technical marks plus 2 professional skills marks.

The examining team reported that weaker candidates did not know the MPM definition at all, and called this disappointing given that ACCA had published a technical article and Study Hub guidance specifically on IFRS 18. The flip side: candidates who had prepared scored well, and disclosure answers were polarised — close to full marks, or nothing. There was no middle ground. You either knew IFRS 18 or you scored zero.

What an MPM actually is

An MPM is a subtotal of income and expenses that: (1) the company uses in public communications outside the financial statements, (2) communicates management's view of an aspect of financial performance, and (3) is not a subtotal specifically listed in IFRS 18 or required by another IFRS standard.

Apply that test and Carroll Co answers itself. Adjusted profit before income taxes is a subtotal of income and expenses, published in the annual report, reflecting management's view of underlying performance — it is an MPM. Gearing is a ratio built from statement of financial position balances. It is not a subtotal of income and expenses, so it can never be an MPM, however prominently management quotes it.

Wrong answer vs correct answer

Wrong: "Adjusted profit is an alternative performance measure that management uses to show underlying performance, so it should be disclosed transparently." No definition, no test, no IFRS 18 reference — zero marks.

Correct: "Adjusted profit before income taxes is a subtotal of income and expenses used in Carroll's public communications, communicating management's view of underlying performance, and is not a subtotal specified by IFRS 18 — so it meets the MPM definition. Gearing fails the definition because it is a ratio derived from balances, not a subtotal of income and expenses." Definition, applied to the scenario — full-marks territory.

The disclosures the examiner wanted

IFRS 18 requires all MPMs to sit in a single note containing: why the measure communicates management's view of performance; how it is calculated; a reconciliation to the most directly comparable IFRS-specified subtotal (such as operating profit or profit before tax); the income tax effect and the effect on non-controlling interests of each reconciling item; and an explanation of any changes to the measure.

One more cheap win from the same report: in Question 3, candidates earned credit simply for stating which IFRS 18 category of the statement of profit or loss — operating, investing or financing — an adjustment landed in. One sentence, easy marks.

What to do before September

1. Learn the three-part MPM test cold. Subtotal of income and expenses + used in public communications + not IFRS-specified. Practise applying it to adjusted EBITDA, gearing and "underlying profit" until the yes/no is instant.

2. Memorise the single-note disclosures. Why, how, reconciliation, tax and NCI effects, changes. Five items — that is most of a 7-mark requirement.

3. Attempt Carroll Co on the ACCA Practice Platform. It is in the published September/December 2025 sample exam — and read ACCA's IFRS 18 technical article, because the examiner has told you it exists.

The bottom line

SBR's March 2026 pass rate was 50% — and Questions 3 and 4 are consistently where the fail happens. IFRS 18 is new enough that half the room won't have learned it properly. Nine marks for one definition and one note. Learn it, and the newest standard on the syllabus becomes the easiest marks on the paper.