Understanding
Financial Reporting Standard (FRS) 102
What is FRS 102?
Understanding the updated UK financial reporting standard
FRS 102 is the core accounting standard used by medium and large entities in the UK and Republic of Ireland under UK GAAP.
From 1 January 2026, the Financial Reporting Council (FRC) introduced significant amendments following its 2024 periodic review to enhance transparency, comparability and alignment with international standards.
Key updates include a new five-step model for revenue recognition and revised lease accounting that brings most leases onto the balance sheet, alongside other enhancements to fair value measurement and disclosures. These changes aim to improve the quality and clarity of financial reporting for users.
Sign up for our upcoming FRS 102 webinars
Financial reporting revenue accounting under FRS 102
27th May: 9am - 10am
FRS 102 is the core accounting standard used by medium and large entities in the UK and Republic of Ireland under UK GAAP.
From 1 January 2026, the Financial Reporting Council (FRC) introduced significant amendments following its 2024 periodic review to enhance transparency, comparability and alignment with international standards.
Join us for this Financial Reporting Webinar specifically focussing on Revenue Accounting and what they mean for your business.
This practical and engaging session will provide clear guidance, expert insight and key considerations to help you and your business prepare with confidence.
Revenue recognition deep dive for Higher Education
16th June: 9am - 10am
This webinar will explore the application of FRS 102 revenue recognition requirements within the Higher Education sector. We will focus on common income streams and areas requiring judgment, helping institutions understand the practical impact on financial statements.
Key areas covered will include:
Key revenue requirements under FRS102 and HE SORP
Consideration of exchange and non-exchange transactions
5 Step model, including performance obligations, determining transaction price, and timing of recognition
Practical examples for Higher Education providers
Practical considerations and common pitfalls
Revenue recognition deep dive for charities
1st July: 9am - 10am
This webinar will explore the application of FRS 102 revenue recognition requirements within the Higher Education sector. We will focus on common income streams and areas requiring judgement, helping institutions understand the practical impact on financial statements.
Key areas covered will include:
Key revenue requirements under FRS102 and HE SORP
Consideration of exchange and non-exchange transactions
5 Step model, including performance obligations, determining transaction price and timing of recognition
Practical examples for Higher Education providers
Practical considerations and common pitfalls
Deep dive into lease accounting for higher education
8th July: 9am - 10am
This webinar will provide a detailed look at lease accounting under FRS 102 for Higher Education institutions, addressing sector‑specific challenges and practical application issues.
Topics will include:
Overview of lease accounting requirements under FRS 102 and the HE SORP
Identifying lease arrangements and Non-Exchange leases
Recognition and measurement considerations
Practical examples for Higher Education providers
Impact on financial statements and key ratios
Deep dive into lease accounting for charities
15th July: 9am - 10am
This session will focus on lease accounting for charities, addressing sector‑specific challenges and practical application issues.
We will discuss:
Identifying and accounting for leases under FRS 102 and the Charity SORP
Identifying lease arrangements and Non-transaction leases
Disclosure requirements
Practical examples commonly encountered in the charity sector
Fair Value and other FRS 102 changes for corporates
9th September: 9am - 10am
This webinar will explore fair value measurement and other key FRS 102 changes affecting corporate entities, with a focus on practical application and areas of judgement.
Key topics include:
Overview of fair value principles under FRS 102
Assets and liabilities commonly measured at fair value
Recent and forthcoming changes impacting corporates
Practical considerations for year‑end reporting
Fair Value and other changes impacting the SORP for higher education
16th September: 9am - 10am
This session will consider how fair value requirements and other SORP changes apply within the Higher Education sector.
We will cover:
Fair value considerations relevant to universities and colleges
Specific issues relating to investment properties and financial instruments
Other recent SORP developments
Practical examples and disclosure considerations
Fair Value and other changes impacting the SORP for charities
23rd September: 9am - 10am
The final webinar in the series will focus on fair value and other SORP changes relevant to charities, highlighting practical challenges and sector‑specific considerations.
Topics include:
Fair value measurement in a charity context
Common assets and liabilities affected
Wider SORP changes impacting charities
Preparing for upcoming reporting periods
Watch now: FRS 102
Preparing for 2026
This webinar provides a clear overview of FRS 102 and the key changes currently impacting UK financial reporting, explaining what FRS 102 is, why it matters, and how the latest updates may affect your organisation. Our host highlights the most important amendments, practical implications, and areas businesses should start preparing for now.
FRS 102 FAQs
- Do these changes affect all businesses?
- What’s the biggest change I need to prepare for?
- How will this affect my financial statements?
- Will this impact my bank loans or covenants?
- What about charities and not-for-profits?
- Should my business consider switching to FRS 105?
- When should I start preparing?
- What practical steps should I take?
- Where can I find more guidance?
Do these changes affect all businesses?
Not all. If you report under FRS 105 (micro-entities regime), you are not directly affected. Most SMEs using FRS 102 will need to comply.
What’s the biggest change I need to prepare for?
Two areas stand out:
- Leases: If you rent property, vehicles, or equipment, you’ll now need to show these on your balance sheet. Please note there are some minor exemptions.
- Revenue: If you have complex or long-term contracts, the timing of when you recognise revenue may shift.
How will this affect my financial statements?
Your balance sheet may show higher assets and liabilities. Profit and EBITDA may look different due to lease costs being split between depreciation and interest.
Revenue may move between periods, affecting reported results.
Will this impact my bank loans or covenants?
Potentially, yes. Changes to gearing and EBITDA could affect covenant calculations. Early discussions with your bank or lender are recommended.
What about charities and not-for-profits?
Grant income recognition and related disclosures may need review. Trustees should consider how results will be presented to funders and regulators.
Should my business consider switching to FRS 105?
Possibly, if you qualify as a micro-entity. However:
- FRS 105 has fewer disclosures, which some lenders and investors may not accept.
- You may lose flexibility and transparency.
It’s important to weigh the benefits and drawbacks before deciding.
When should I start preparing?
Now! Assessing contracts, leases, and covenants early will avoid last-minute disruption. Early adoption is also an option.
What practical steps should I take?
- Review leases and long-term contracts
- Model the potential impact on your accounts
- Update accounting systems if needed
- Train your finance team
- Speak to your advisers to plan ahead
Where can I find more guidance?
We will be publishing blogs, sector-specific guides, and hosting webinars over the next year. Our team can also provide tailored advice for your business.
Latest FRS 102 articles
Understanding the Tax Implications of FRS 102 Changes
From 1 January 2026, some important updates to FRS 102 come into effect. This is the accounting standard most UK companies use, and the upcoming changes - especially around how leases are shown in your accounts - will also impact how much Corporation Tax you pay, and crucially, when you pay it. As we move
FRS 102 Amendments: What Businesses Need to Know Ahead of January 2026
The Financial Reporting Council (FRC) has completed its periodic review of FRS 102 – The Financial Reporting Standard applicable in the UK and Republic of Ireland. These are the most significant changes since the standard was introduced almost a decade ago. The amendments will apply to accounting periods beginning on or after 1 January 2026,
