Automated FRS 102 lease accounting you can rely on

FRS 102 Section 20 is the lease accounting section of FRS 102, the principal financial reporting standard for the UK and Republic of Ireland. Revised by the Financial Reporting Council and effective for accounting periods commencing on or after 1 January 2026, it requires lessees to recognise most leases on the balance sheet as a right-of-use (ROU) asset and corresponding lease liability. The approach mirrors IFRS 16, with some simplifications specific to FRS 102 entities.

Learn more in our guide: FRS 102: What UK businesses need to know about the new standard.

The revised FRS 102 Section 20 is mandatory for accounting periods commencing on or after 1 January 2026. Early adoption is permitted. No restatement of comparatives is required on transition, which simplifies first-year implementation significantly compared to the original IFRS 16 rollout.

Yes. LOIS automates the full FRS 102 Section 20 compliance process: right-of-use asset recognition, lease liability amortisation, depreciation and interest schedules, CPI and RPI remeasurements, and disclosure reporting. The platform generates locked journals for GL posting, maintains a complete audit trail for every modification, and produces the disclosure reports your auditors require. Our lease accounting module supports FRS 102, IFRS 16, AASB 16, and FASB ASC 842 within a single platform.

Both standards require on-balance-sheet lease accounting using the right-of-use asset model. FRS 102 includes simplifications: you can use an obtainable borrowing rate rather than the lessor's implicit rate, it provides examples of assets that are not low-value (so you know what does qualify for the exemption), and no restatement of comparatives is required on transition. IFRS 16 applies to listed companies and global groups; FRS 102 applies to UK and Irish entities not applying IFRS.

See a full comparison: FRS 102 vs IFRS 16: key differences finance teams need to know.

Transition involves five main steps: completing a lease inventory across all contracts including embedded leases in service agreements; selecting accounting policies and transition judgements; setting up your system with opening balances; completing your first-period close with the new calculations; and establishing ongoing processes for modifications and remeasurements as the portfolio changes. Our step-by-step guide covers this in detail: FRS 102 Section 20 transition guide: a step-by-step checklist.

Yes. LOIS offers a managed service that combines the LOIS platform with CA-qualified lease accounting experts who validate your data, run your FRS 102 calculations, prepare journals ready for posting, and deliver audit-ready reporting packs each period. This is available for organisations that want the compliance outcome without the operational overhead of managing it internally.

Yes. LOIS provides a free five-minute FRS 102 compliance health check that helps you identify where gaps exist in your current process and data before the standard takes full effect.

The change affects any UK or Irish entity that holds leases. Industries with the most material balance sheet impact include retail (large property portfolios), transport and logistics (significant fleet and vehicle leases), healthcare (equipment and property), construction (machinery and site leases), and hospitality (property-heavy operations). Across all sectors, embedded leases in service contracts are a common area where organisations undercount their FRS 102 exposure.

LOIS is built and supported by CA-qualified accountants who understand FRS 102 in practice, not just in principle. The platform unifies lease accounting, property management, and fleet management in a single system, eliminating the data handoffs and reconciliation gaps that create audit risk. It scales from 30 leases to over 10,000, is ISAE 3402 assured, and includes built-in GL integration so the subledger and your accounts agree automatically. For more detail: how to choose FRS 102 lease accounting software.