FRS 102 Section 20
The section of FRS 102 that governs lease accounting for UK and Irish entities applying UK GAAP.
Definition
FRS 102 Section 20 was substantially amended by the FRC's 2024 periodic review to introduce a right-of-use asset and lease liability model for lessees, broadly aligned with IFRS 16. The amendments are effective for accounting periods beginning on or after 1 January 2026, with early adoption permitted. This replaced the old operating/finance lease distinction for lessees.
Why it matters
Most UK private companies preparing statutory accounts apply FRS 102. The 2026 amendments to Section 20 are the most significant change to UK lease accounting in a generation. First-time adoption requires a transition adjustment and specific disclosures.
In AuditLease
AuditLease fully supports FRS 102 Section 20 calculations and generates the FRS 102 statutory note including transition disclosures for first-year adopters.
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.