SAICA Issues Exposure Draft on Headline Earnings Circular 1/2026

Posted 14 August 2026 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The South African Institute of Chartered Accountants (SAICA), acting at the request of the JSE Limited, has published an Exposure Draft for proposed Circular 1/2026 – Headline Earnings to update headline earnings calculations in light of IFRS 18.

Under the JSE Listings Requirements, entities listed on the exchange have been required since 2000 to disclose headline earnings and provide a detailed reconciliation of headline earnings to basic earnings per share determined under IAS 33 (Earnings per Share). Headline earnings is a South African market-specific requirement and is not mandated by International Financial Reporting Standards (IFRS).

The proposed Circular 1/2026 amends Section B, Section E, and paragraphs 12–13 of the headline earnings guidance to ensure compatibility with the presentation, subtotal, and disclosure structure introduced by IFRS 18 (Presentation and Disclosure in Financial Statements).

Key Transition and Application Rules

  • Effective Date: Circular 1/2026 will take effect for the interim and/or annual financial reporting periods in which an entity first applies IFRS 18.
  • Transition Approach: The amended headline earnings rules must be applied consistently with the transition approach adopted by the entity for new or amended IFRS Accounting Standards and IFRIC Interpretations.
  • Superseded Guidance: Circular 1/2026 will replace Circular 1/2023. However, Circular 1/2023 will continue to apply to reporting periods prior to an entity’s mandatory or early adoption of IFRS 18.

Click here to download SAICA Exposure Draft: Proposed Circular 1/2026 – Headline Earnings.

What this means for you, your business, or your clients

  • For yourself: Preparers, registered auditors, and independent reviewers must study the detailed adjustments in Section B and Section E of the Exposure Draft to ensure auditing and accounting programmes reflect the revised reconciling items under IFRS 18.
  • For your business: JSE-listed entities and accounting firms must align their internal reporting templates and financial consolidation systems with the draft circular alongside their broader IFRS 18 implementation plans.
  • For your clients: Listed clients must review how newly defined operating profit subtotals and capital item exclusions under IFRS 18 will impact the reconciliation and presentation of their headline earnings per share (HEPS).

Originally published at https://accountingacademy.co.za/news/read/saica-exposure-draft-on-headline-earnings-circular-2026

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