FRS 102 overview and key changes
Understanding the FRS 102 Periodic Review 2024 amendments, transition requirements and their impact on financial reporting.
Preparing for the FRS 102 Periodic Review 2024 amendments
The FRS 102 Periodic Review 2024 amendments represent the most significant changes to UK GAAP in recent years, introducing major revisions to lease accounting, revenue recognition and several other areas of financial reporting.
With most requirements becoming effective for accounting periods beginning on or after 1 January 2026, businesses should now assess the potential impact on their financial statements, systems, processes, and governance arrangements. Early planning can help reduce implementation risk, support compliance, and improve readiness for transition.
This guide, developed by Crowe UK's Financial Reporting Standards specialists, outlines the key FRS 102 amendments, transition requirements and practical considerations businesses should address ahead of implementation.
Overview
FRS 102 Periodic Review 2024 amendments explained
The FRS 102 amendments introduce a number of important changes to UK GAAP financial reporting, including revisions to lease accounting, revenue recognition and disclosure requirements. Understanding the scope, effective dates and transition requirements will help businesses assess the potential impact on their financial reporting and compliance obligations.
What is changing?
The revised standard includes several significant updates:
- Revisions to lease accounting and revenue recognition through updated versions of Section 20 (Leases) and Section 23 (Revenue from Contracts with Customers).
- Most amendments apply from 1 January 2026, while new disclosure requirements for supplier finance arrangements take effect from 1 January 2025.
- Early adoption is permitted, provided all amendments are applied at the same time.
- Application of the revised standard may result in opening reserves and balances being adjusted and, in some cases. Comparative figures recalculated, subject to specific practical expedients.
Why does it matter?
These changes are designed to improve consistency, transparency and alignment with international standards. However, they may also affect reported profits, balance sheets and key performance measures.
Early assessment of the amendments can help businesses identify the areas most affected, review existing reporting processes and plan an effective transition.
Who is affected?
Any entity reporting under FRS 102 will need to consider these amendments. While not all changes will apply to every business, a full review of the revised standard is essential to identify which areas are relevant and what actions are required.
Key changes
Areas of focus under the revised FRS 102 standards
Other transitional considerations
Additional changes introduced by the FRS 102 amendments
The amendments also introduce changes in several other areas:
- Fair value measurement: Updated guidance applies prospectively.
- Supplier finance arrangements: Disclosure requirement apply for accounting periods beginning on or after 1 January 2025. Comparatives are not required.
- Business combinations: Historic acquisitions are not reassessed unless prior accounting was incomplete.
- Uncertain tax positions: A choice between full or modified retrospective application is available.
While these changes are more targeted, they still require careful review to ensure correct application and disclosure.
Planning ahead
Practical steps for implementing the FRS 102 amendments
Early action can help reduce implementation risk, maintain compliance with evolving financial reporting requirements and build stakeholder confidence through clear and consistent reporting. Businesses should therefore take practical steps now to understand the amendments and prepare for implementation.
Navigating the transition to the revised FRS 102 standard
The FRS 102 Periodic Review 2024 amendments represent an important step in the evolution of UK GAAP, bringing greater consistency, transparency and alignment with international reporting standards.
For many businesses, the changes to lease accounting, revenue recognition and disclosure requirements will require careful planning, robust data and clear communication with stakeholders. Early action to assess the impact of the amendments, select appropriate transition approaches and review supporting systems can help reduce implementation challenges and support ongoing compliance.
Crowe UK's Audit team can help businesses understand the implications of the revised standard, assess readiness and support a smooth transition to the new requirements.
For further guidance on specific areas of FRS 102, explore our related resources covering key accounting and financial reporting requirements.
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