FRC Amendments to FRS102

Following extensive stakeholder consultation, the Financing Reporting Council (FRC) have completed their periodic review of UK GAAP. The following outlines the details of their new requirements.

Areas Affected by Changes

Effective for accounting periods starting on or after 1st January 2026, the key impacted areas include:

  • A new comprehensive five-step model for revenue recognition in FRS102 and FRS105, aligned with IFRS 15. This entails identifying goods or services promised to customers and determining when the obligation to transfer them has been fulfilled.

  • Adoption of a new lease accounting model based on IFRS 16, necessitating that lessees recognise all leases on their balance sheet. This is subject to limited exemptions relating to short term and low value leases.

  • Leases will be recognised to reflect the right to use the asset over the lease term, along with a corresponding liability for lease repayments. This applies specifically to FRS102, while FRS105 will retain its lease accounting model distinguishing between operating and finance leases.

Improvements and Clarifications

Additionally, there are several incremental improvements and clarifications to FRS102, including:

  • Enhanced clarity for small entities applying Section 1A Small Entities of FRS 102 regarding disclosure requirements for a true and fair view.

  • Revision of Section 2 (Concepts and Pervasive Principles) to align with the IASB’s Conceptual Framework for Financial Reporting issued in 2018.

  • Introduction of a new Section 2A (Fair Value Measurement) to replace the Appendix to Section 2, updated to adhere to the principles of IFRS 13.

The removal of the option for entities to newly adopt the recognition requirements of IAS 39 Financial Instruments: Recognition and Measurement (unless needed for consistency in group accounting policies).

The FRC is hosting a Webinar on 15th May 2024 to provide further insights into the new standards.

Further Information

If you would like more information regarding the amendments to FRS102, please contact your usual NRB advisor.

Click here to find out more about our services.


Integrity is at the forefront of everything we do as we apply the strongest ethical and moral rigour across how we work and assist our clients.

At NR Barton we understand the importance of trust and through our integrity we make sure this underpins absolutely everything we do.

We like to do the best for our clients and this isn’t always easy. We aren’t afraid to use our integrity to confront difficult situations. We firmly believe that acting with our utmost integrity those difficult conversations will help to build our trust with our clients. Sometimes the difficult option is the best.

It is also our integrity that has helped us to build a strong local relationship in our market place and the thrive as a business for the last seventy years.

We’re here for the long term and our integrity will help us to achieve that.