FRC updates FRS 102 for UK and Irish companies: new lease and revenue rules from 2026
On 27 March 2024 the FRC issued the periodic review amendments to the UK and Ireland accounting standards, including FRS 102. They bring lease accounting and revenue recognition closer to IFRS and mostly apply to accounting periods beginning on or after 1 January 2026. The FRC estimates the standards are used by about 3.4 million businesses.
The Financial Reporting Council (FRC) issued amendments to the financial reporting standards used in the UK and the Republic of Ireland on 27 March 2024, following its five-yearly review of FRS 102.
What changed
- Leases: lease accounting moves closer to IFRS 16, so more leases come onto the balance sheet. The FRC made some changes to its original proposals after consultation.
- Revenue: a new revenue recognition model based on IFRS 15.
- Other improvements and clarifications to make the standards easier to apply.
When it applies
In most cases, accounting periods beginning on or after 1 January 2026.
Who is affected
Companies preparing accounts under FRS 102 and related standards in the UK and Ireland, which the FRC estimates at about 3.4 million businesses, and their finance teams and auditors.
What to do
Assess the effect on leases and revenue early. Lease changes can affect reported debt, EBITDA and covenants, and may affect where a company sits against size thresholds.