FRS 102 2026 lease changes
The amendments to FRS 102 Section 20 effective for periods beginning on or after 1 January 2026, introducing a right-of-use model for lessees.
Definition
The FRC's 2024 periodic review amended FRS 102 to require lessees to recognise a right-of-use asset and lease liability for most leases, replacing the old operating/finance lease model. The changes are effective for periods beginning on or after 1 January 2026. For most UK entities this means the financial year to December 2026 is the first year of adoption.
Why it matters
The FRS 102 2026 changes will bring UK lease accounting onto the balance sheet for the first time for many companies. Finance teams need to identify all in-scope leases, set discount rates, prepare transition calculations, and prepare statutory note disclosures.
In AuditLease
AuditLease was built with FRS 102 2026 compliance in mind. It calculates both IFRS 16 and FRS 102 lease positions and produces the appropriate statutory note for each standard.
Related terms
Official sources
Put this into practice with AuditLease
AuditLease handles IFRS 16 and FRS 102 lease calculations, statutory note generation, journal entries, and audit evidence, so your team spends less time on spreadsheets and more time on judgements.
This definition is for general information only and is not accounting or legal advice. Definitions are based on IFRS 16, FRS 102, and associated guidance published by the IFRS Foundation and the Financial Reporting Council. Users should refer to the applicable accounting standards and their professional advisers for judgement-specific matters.