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FRS 102: New Lease Accounting Model

Lorraine Keogh
  • Updated

Overview
The Financial Reporting Council (FRC) has introduced significant amendments to FRS 102 to incorporate a New Lease Accounting model, aimed at enhancing transparency and comparability in financial reporting related to lease arrangements. This new model has been implemented in Bright Accounts Production and will be applicable for accounting periods beginning on or after 1 January 2026.

Prerequisites
To utilise this option, the following prerequisites should be met:

  • Jurisdiction Requirement: The Country of Incorporation should be Ireland, United Kingdom, or Northern Ireland.
  • Financial Reporting Standard: Either FRS 102 or Follow FRS 102 Section A should be selected.
  • Compliance Database Option: A new option will be available in the Compliance Database.
    Navigate to:
    Compliance Database > Legislation, Compliance and Disclosure > Accounting Options
    and enable the checkbox:
    Follow FRS 102 Lease Accounting Standard for Accounting Periods Commencing on or After 1 January?

Note: The above option will be available if any assets are acquired on lease, and postings should be made under Nominal 922 (Long Term Lease Obligations).

Implementation
When the Compliance Database option is properly configured, the system will automatically:

  • Incorporate the appropriate Right-of-Use Assets disclosure under the Balance Sheet, based on the selection of the Compliance Database option:
    Compliance Database > Legislation, Compliance and Disclosure > Accounting Options > Show Right-of-Use Assets separately on face of Balance Sheet?
  • Display the Lease Accounting Policy under the Accounting Policies section
  • Present two separate notes under the Notes to Accounts section, breaking down between Right of Use Assets and Other Assets

Note: A dedicated Right of Use Assets section in the Compliance Database will be available under:
Compliance Database > Intangible and Tangible Fixed Assets > Tangible Assets
from where Right of Use Assets can be disclosed in the accounts.

Conclusion
Bright Accounts Production will reflect the new lease accounting model under FRS 102 based on the selection of the relevant Compliance Database options or Nominal postings. The system will ensure that all relevant disclosures are automatically presented throughout the accounts. Further enhancements and updates related to this new lease accounting module will be shared in upcoming releases.