From 2026, the accounting standard FRS 102 is undergoing its biggest shake-up in a decade.

These changes are wide-reaching, and if your business prepares accounts under UK GAAP, they could have a big impact on how your finances are handled.

We’re here to guide you through what’s coming, what it means, and how to get ready.

What’s changing with FRS 102?

At present, many businesses recognise revenue when they pass over risks and rewards to a customer.

The changes to FRS 102 will see the focus shift to control. A new five-step model, inspired by international standards, will require businesses to dig deeper into the details of their contracts.

Whether you’re offering goods, services, or a blend of both, you’ll need to track what’s being delivered and when.

This could change the timing of when revenue appears in your accounts.

This is paired with a change in the way that leases are being handled.

Most leases will soon need to be recognised on the balance sheet as both an asset and a liability.

This will create a more transparent view of your financial obligations, but it will also increase your reported liabilities.

FRS 102 and Section 1A are also being updated to bring them closer to international standards.

There’s a new section dedicated to how fair value is measured, along with updates to the overarching concepts used across the standard.

If your business relies on valuations for assets, investments, or financial instruments, this provides more structure and may also mean more disclosure.

How can I stay compliant with the changes to FRS 102?

As the changes are far-reaching, it is going to be important to conduct a thorough review of all of your financial processes.

These changes are designed to heighten transparency and are aimed at cutting back on erroneous or fraudulent financial dealings.

It might be beneficial to seek professional support and guidance to fully understand what you will need to update to keep your business running smoothly.

We are on hand to give everything a look over for you to help you identify any areas of potential risk.

As the guidelines, and your responsibilities, continue to change over the coming months, we can help you prepare accordingly so that you are ready for the January 2026 deadline.

There is an option to voluntarily adopt many of the changes, so it may be worth getting ahead of them while the pressure is not as high.

Keep up with the changes to FRS 102 by speaking to our team today or download our handy guide!