Companies need to know the newest accounting rules and standards in order to stay in line with the law and keep their finances open. An essential change is the impending revision of FRS 102, the UK and Republic of Ireland’s financial reporting standard.
In this blog, we’ll talk about the main changes, how they affect businesses, and how TAXSTEINS LTD can help you easily deal with these changes.
Key Changes in FRS 102:
The recent amendments to FRS 102, effective from January 2026, aim to enhance consistency and alignment with international accounting standards. These changes include:
- Adopting a new model for recognizing income that is in line with IFRS 15.
- When lessees follow IFRS 16, they can use on-balance sheet leasing.
- Changes to how fair value is calculated, questionable tax situations, mergers and acquisitions, and more.
Impact on Businesses:
The transition to the new FRS 102 standards may have wide-reaching commercial implications for businesses. Key considerations include:
- Effects on key metrics such as EBITDA, profit, and net debt.
- Potential need to reset debt/pension covenants.
- Adjustments to remuneration and bonus schemes tied to financial performance.
- Restrictions on dividend payments due to impacts on distributable reserves.
How Businesses Can Prepare:
To effectively adapt to the upcoming changes, businesses are encouraged to:
- Conduct an initial impact assessment to identify areas of financial statement impact.
- Implement changes to systems and processes to ensure compliance by January 2026.
- Plan for increased disclosures related to revenue recognition and lease accounting.
How TAXSTEINS LTD Can Help
TAXSTEINS LTD’s Accounting Services team is well-equipped to support businesses through the transition to the new FRS 102 standards. Our tailored services include:
- Workshops for finance teams to understand and assess the impact of the changes.
- Impact assessments to review accounting policies and identify affected metrics.
- Guidance on quantification, systems, processes, tax implications, and financial reporting.
- Expert advice on preparing financial statement disclosures and navigating the transition period effectively.
Conclusion
Navigating through regulatory changes in accounting standards can be complex, but with the right support and expertise, businesses can adapt smoothly and ensure compliance with the latest FRS 102 amendments. By partnering with TAXSTEINS LTD’s Accounting Services, businesses can benefit from tailored solutions and expert guidance to successfully implement the upcoming changes and optimize their financial reporting processes.
For more insights on the upcoming changes to FRS 102 and how TAXSTEINS LTD can assist you, feel free to reach out to our team of experts for personalized support and guidance.
