It's as simple as that: FRS 102

By Priti Mistry
on 23 Nov 2025

Big changes are coming to UK Generally Accepted Accounting Practice (GAAP); some of the most significant in recent years. From 1 January 2026, new rules under the Financial Reporting Standard 102 (FRS 102) will apply to most businesses.

Young woman standing confidently in a modern office lounge area, smiling at the camera. She is wearing a blue and white striped blouse with beige trousers, with her hands in her pockets. The background features shelves, books, and modern furniture in a relaxed, contemporary setting.

It's as simple as that, our ongoing series, is designed to make sense of complex accounting and tax topics. From regulatory changes to industry-specific insights, we will break it all down into clear, practical advice that you can not only understand but implement immediately if required.

In this edition, we discuss the latest FRS 102 changes coming into effect on 1 January 2026 - what the changes are, and why it matters.

The two biggest changes to note are:

Most leases will move onto the balance sheet as a right-of-use (RoU) asset and a matching liability.
Revenue will be recognised using a new five-step model, making the timing and treatment clearer and more consistent.

Leaving planning too late risks last-minute surprises, disruption and unnecessary strain on your finance team.