Top tips: revenue recognition accounting changes to FRS 102

Significant changes to FRS 102 come into effect in January with a major overhaul of revenue recognition accounting rules. Hitesh Khulbe, audit director at Gerald Edelman, explains the key changes with tips and advice on potential complexities and pitfalls

In March 2024, the Financial Reporting Council (FRC) issued amendments to FRS 102 and other FRSs as part of the Periodic Review 2024. The aim of these changes is to bring FRS 102 accounting in line with International Financial Reporting Standards (IFRS) and they introduce major changes to accounting for revenue recognition.

The effective date for these amendments is periods beginning on or after 1 January 2026. However, companies can choose to early adopt 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.

What does this mean for businesses?

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