FRS 102

How frs 102 works

The applicable standard and reporting regime depend on the entity. Significant amendments from the 2024 periodic review generally apply for accounting periods beginning on or after 1 January 2026, including changes to lease accounting and revenue recognition.

Practical UK business example

A company’s accountant explains why a new reporting period recognises lease-related assets and liabilities that were not presented in the same way previously.

Illustrative example only; not a finance quotation or a client case study.

Why it matters

Changes in accounting can affect ratios, EBITDA and covenant calculations without producing equivalent changes in cash. Comparisons therefore need the accounting basis explained.

Limitations and common misconceptions

FRS 102 does not apply identically to every business and is not the same as IFRS 16. Exemptions, transition and the entity’s reporting framework must be checked.

Discuss business borrowing to discuss how the structure relates to your business.