Operating lease commitment
The future minimum lease payments disclosed under the old FRS 102 standard, now used as a starting point for transition calculations.
Definition
Under the old FRS 102, operating leases were kept off the balance sheet and only the future minimum lease payments were disclosed in the notes. Under the 2026 amendments, these commitments become the basis for transition calculations — the total commitment is discounted at the transition-date IBR to arrive at the opening lease liability.
Why it matters
The operating lease commitment disclosure in the last pre-transition accounts provides the starting data for transition calculations. Finance teams should reconcile their transition liability back to these disclosures.
In AuditLease
AuditLease's FRS 102 transition note includes a reconciliation from operating lease commitments to the opening lease liability recognised at transition.
Related terms
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.