Top tips: lease accounting changes to FRS 102

As a major overhaul of UK GAAP lease accounting rules come into effect from January, Saskia Harrison, audit director at Gerald Edelman explains the key issues from classification to right-of-use assets and depreciation considerations

In March 2024, the Financial Reporting Council (FRC) issued amendments to FRS 102 as part of its Periodic Review 2024. The aim of these changes is to bring FRS 102 accounting in line with International Financial Reporting Standards (IFRS).

The effective date for these amendments will be periods beginning on or after 1 January 2026. However, companies can choose to be early adopters of these changes and apply them for periods beginning on or after 1 January 2025. If early adoption is applied, it must be applied to all the accounting standard changes, there is no option to be selective.

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