Applying FRS 102 Updates
For SMEs, adapting your organisation to a rapidly evolving professional landscape can feel like chasing a moving goalpost, and the 2026 FRS 102 updates are proving no different. From recalculating lease liabilities to reassessing revenue recognition, the upcoming changes are certainly set to keep finance teams on their toes.
Associated Risks Include:
- Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) Impact
- Bank Covenants
- Stakeholder Reporting
At Fiander ETL, our goal is to help you find clarity amid complexity and provide structure and practical guidance at every stage of the transition so that SME owners can navigate the updates with confidence.
Three Steps to Get You Started
By breaking the process into clear steps, finance teams can start the transition and implement these 2026 FRS 102 changes with ease.
- Lease Mapping: Identify all contracts that contain leases, classify them correctly, and calculate both the right-of-use (ROU) asset, and liability.
- Revenue Recognition: Apply the five-step model to understand performance obligations, determine transaction prices, and recognise revenue at the right time.
- System and Process Alignment: Adjust your accounting systems, reporting templates, and workflows to integrate new requirements seamlessly.
Turn Challenges into Opportunities
We’ve predicted some of the most common pitfalls which will arise from the FRS 102 updates, but don’t worry – here are some ways you can avoid them, while streamlining your process at the same time.
Problem: Miscalculating lease liabilities or right-of-use (ROU) assets.
Solution: Build a complete lease register early and validate all inputs before modelling, using consistent discount assumptions across contracts to ensure accuracy.
Fiander’s Top Tip: Reconcile your lease register with your general ledger at the start, as even minor discrepancies can now cause major reporting issues later.
Problem: Misapplying the five-step model
Solution: Review your contracts in detail to identify distinct performance obligations and document your judgments.
Fiander’s Top Tip: Record your revenue recognitions as you go along; clarity today avoids confusion later down the line – particularly when you get to year-end.
Problem: Overlooking stakeholder communications
Solution: Prepare clear, future-proof summaries demonstrating how FRS 102 changes can affect key metrics, e.g. EBITDA and covenants
Fiander’s Top Tip: Proactive updates strengthen stakeholder confidence and minimise surprises.
Solution: Build a complete lease register early and validate all inputs before modelling, using consistent discount assumptions across contracts to ensure accuracy.
Fiander’s Top Tip: Reconcile your lease register with your general ledger at the start, as even minor discrepancies can now cause major reporting issues later.
Problem: Misapplying the five-step model
Solution: Review your contracts in detail to identify distinct performance obligations and document your judgments.
Fiander’s Top Tip: Record your revenue recognitions as you go along; clarity today avoids confusion later down the line – particularly when you get to year-end.
Problem: Overlooking stakeholder communications
Solution: Prepare clear, future-proof summaries demonstrating how FRS 102 changes can affect key metrics, e.g. EBITDA and covenants
Fiander’s Top Tip: Proactive updates strengthen stakeholder confidence and minimise surprises.
The Fiander ETL Solution
With bespoke templates, clear communication and specialist advice, Fiander ETL provides the guidance SMEs need to stay compliant. We understand that you’re best equipped to focus on growth when everything else falls into place, which is where we can help.
When we first start working together, we’ll conduct a fixed-price readiness review to assess your current compliance status and identify any gaps. From here, we can provide transition support, including map leases, contract reviews, and accounting policy updates. From system updates right through to audit preparation, you’ll receive support from start to end.
When we first start working together, we’ll conduct a fixed-price readiness review to assess your current compliance status and identify any gaps. From here, we can provide transition support, including map leases, contract reviews, and accounting policy updates. From system updates right through to audit preparation, you’ll receive support from start to end.
