The landlord perspective For landlords, accounting treatment under FRS 102 will remain largely unchanged, with most leases continuing to be treated as operating leases. However, where a lease qualifies as a finance lease, the revised recognition and measurement rules will apply. Landlords should also be aware that their tenants may also need more information under the new model, such as unguaranteed residual values and fair value data, to support their own accounting. This could increase administrative and data-sharing requirements between landlords and lessees.
Preparing for 2026 January 2026 is not far away, so key things to consider now include:
These changes to lease accounting under FRS 102 represent a fundamental shift in how businesses in the property and construction sector report their financial position. Understanding the impact now will help ensure a smooth transition and avoid unexpected issues later. For further information on how we can support you through these changes, get in contact with one of the team by calling 0330 058 6559 or by emailing hello@scruttonbland.co.uk
Finance team readiness : making sure that your teams understand both the accounting and disclosure requirements of the revised FRS 102. Systems and data : reviewing whether your existing accounting systems can capture and report the necessary lease data and whether the chart of accounts needs to be updated. Covenants and tax : modelling how the changes will affect net debt, profits and tax payments, and discussing these with lenders and stakeholders early. Wider business implications : considering any impact on remuneration policies, performance-related pay or corporate transactions where financial metrics are a factor.
•
•
•
•
P R O P E R T Y A N D CONSTRUCTION | SCRUTTON BLAND | 1 3
Made with FlippingBook Learn more on our blog