On 27 March 2024, the final version of the amendments to FRS102 were published by the FRC to implement the proposals in their Financial Reporting Exposure Draft 82 (FRED82).
What was in FRED 82?
The main goal of FRED 82 is to align FRS 102 with international standards, specifically IFRS 15 and IFRS 16, focusing on revenue from contracts and lease accounting.
The now implemented final version of the standard is effective for periods starting after 1st January 2026. It’s expected that this will apply to December 2026 year-ends onwards, although some shorter periods may also be caught.
But what do these changes mean for your reporting obligations?
Changes to revenue recognition
FRS102 will adopt a slightly simplified version of the 5-step revenue recognition model from IFRS15. This could change the timing of when revenue can be recognised.
Changes to lease accounting
Lease accounting is how we account for any lease transactions you enter into. The new standard sets out that all leases will be included on your business’ balance sheet. At the moment, future operating lease commitments are only disclosed in the notes to the financial statements, but going forward we will be required to recognise liability, right-of-use assets, and profit and loss impact on the balance sheet.
Preparing for implementation
As we anticipate the implementation of the revised standard, we want to help you to understand the potential impact on your business, and how we can best manage this change together. Understanding the proposed changes, conducting an impact assessment, and updating accounting systems are crucial steps.
With the support of our advisers, you’ll be able to navigate this transition smoothly, ensuring compliance and minimising stress. In the build up, we will help you to stay informed and proactive, empowering you to adopt the new standards seamlessly, maintaining efficient business-as-usual processes.
There is still plenty of time until the changes come into effect, and we will be able to offer the tools and assistance you need to navigate the change as it’s required.
However, if you have any immediate queries, please contact our Head of Corporate, Adam Buse at Adambuse@fiandertovell.co.uk for more information.