FRS 102
The 46 Most Pressing Lease Accounting Questions from your Peers
We have compiled answers to the most pressing questions asked by UK and Irish accounting professionals to help you navigate this shift with confidence.
The era of “off-balance sheet” financing is over for UK GAAP preparers. Under the recent amendments to FRS 102, the distinction between operating and finance leases has vanished, requiring nearly all leases to be recognised on the balance sheet.
While recognising a right-of-use (ROU) asset and lease liability seems straightforward, the operational reality involves significant hurdles—from identifying embedded leases to managing complex UK salary sacrifice schemes.
Download Now
What You’ll Learn:
- Scope and Applicability: Understand which entities are in scope (including “Small” entities under Section 1A) and how to handle complex intra-group rentals.
- The “Short-Term” and “Low-Value” Filters: How to strategically apply exemptions for assets under £4,000 to keep your balance sheet from becoming overburdened with immaterial items.
- Deciphering Lease Terms: How to look beyond the contract date to assess break clauses and “reasonably certain” extensions that act as multipliers for your liability.
- Mastering the Discount Rate: Technical guidance on determining your incremental borrowing rate (IBR) at the transition date—and why you should not use your “loss of interest” rate.
- The EBITDA Boost: How the shift from rental expenses to depreciation and interest fundamentally alters your P&L geography and business valuation.
