We began 2026 with a revised version of FRS 102 accounting standards, which introduced a number of new rules.
The reforms, affecting accounting periods starting on or after 1 January 2026, which means that many businesses are currently getting to grip with these new reforms.
However, the Financial Reporting Council (FRC) has now announced further amendments to FRS 102 and FRS 105, affecting how certain businesses present their financial statements for accounting periods on or after 1 January 2027.
These wide-ranging reforms, which take place over the next two years, will require businesses to understand what is coming and how it could affect them.
How will the FRS 102 rules change from 2027?
The FRC’s decision to amend the UK’s accounting standards again follow the follow the introduction of IFRS 18, which replaces IAS 1 on the presentation of financial statements.
These further changes will ensure that the country remains aligned with international accounting standards and will also include amendments to UK GAAP.
What specifically is changing under the latest FRS 102 reforms?
Under the new rules, entities using updated Companies Act formats must ensure that their accounts include:
These new reforms build on the changes that came into force from 1 January 2026, which include revisions to 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?
For the current set of FRS 102 reforms, you must now review your contracts and lease liabilities and ensure you have the correct presentation formats.
Looking further ahead to 2027, you should seek professional advice if you are unsure how the further revisions to FRS 102 affect your business.
For further support, contact our team today.
