Lease accounting (ASC 842 / IFRS 16)

The FRS 102 Periodic Review 2024 changes apply for accounting periods starting on or after 1 January 2026, and short-term leases can often still be excluded under a practical expedient, confirmed lease by lease.

Where a renewal is reasonably certain to be exercised, it is included in the lease term used to calculate the liability.

It is closely aligned. Companies already on UK-adopted IFRS use IFRS 16 directly; the FRS 102 Periodic Review brings FRS 102 reporters onto a similar on-balance-sheet model from 1 January 2026.

The lease liability and right-of-use asset are remeasured to reflect the new expected term once a break is exercised or becomes reasonably certain, rather than running out the original schedule against a lease that has effectively shortened.

Variable payments not based on an index or rate are generally expensed as incurred rather than included in the initial lease liability calculation, so a turnover-linked rent clause is treated differently from a fixed monthly payment, and we flag which portion of your lease falls into each category.

Short-term leases can often be excluded under a practical expedient available in both standards; we confirm this lease by lease.

We use your incremental borrowing rate where it is known, or a reasonable estimate agreed with you where it is not, and document the basis in the schedule.

If your records are behind, we scope a catch-up first so lease accounting (ASC 842 / IFRS 16) starts from a clean, reconciled base. That catch-up is priced and timed separately from the ongoing engagement, so you always know what each part costs.

Every deliverable under lease accounting (ASC 842 / IFRS 16) is reviewed by a senior reviewer before it reaches you. You keep access to the underlying file at every stage, so nothing about the work happens somewhere you cannot see it.