The revised version of FRS 102 accounting standards has already brought new reforms for accounting periods starting on or after 1 January 2026 and now the rules are changing again.
The Financial Reporting Council (FRC) has announced further amendments to FRS 102 and FRS 105, affecting how certain businesses present their financial statements.
With the changes taking effect over the next two years, now is the time to understand what is coming and how it could affect you.
Why are the FRS 102 rules changing again?
The updates follow the introduction of IFRS 18, which replaces IAS 1 on the presentation of financial statements.
To ensure they are aligned with international accounting standards, the FRC has introduced amendments to UK GAAP.
However, after consultation, it stopped short of adopting the full IFRS 18 model.
What are the new FRS 102 changes?
The latest amendments apply to entities using updated Companies Act formats. They include:
- Revised presentation requirements for businesses applying adapted balance sheet and profit and loss formats
- Moving presentation requirements into new appendices within Sections 4 and 5
- Updated definitions of current assets, non-current assets and current liabilities, plus additional application guidance
These changes are taking effect for accounting periods beginning on or after 1 January 2027.
Alongside this, earlier reforms came into force from 1 January 2026 and changed revenue recognition and lease accounting.
Revenue must now follow a five-step control-based model and businesses must reassess customer contracts.
Most leases must also now be recognised on the balance sheet as a right-of-use asset with a corresponding lease liability.
Instead of a single lease expense, businesses will record depreciation and interest separately.
How can you prepare?
To prepare for the current FRS 102 changes, you should now be reviewing contracts and lease liabilities and ensuring you have the correct presentation formats.
If you are unsure how the new FRS 102 rules will affect your business, now is the time to seek professional advice.
For further support, contact our team today.
