FRS 102 SECTION 20
FRS 102 Section 20 is now in effect.
The 2026 FRS 102 updates bring significant changes to how entities in the UK and Ireland account for leases. More leases on balance sheet. New classification rules. Increased disclosure requirements. Here's what that means in practice, and how Crunchafi is building to solve it.
What has changed under FRS 102
The FRC revised Section 20 to align more closely with IFRS 16, bringing significant changes to how leases are recognised, measured, and disclosed for entities in the UK and Ireland.
On-balance-sheet recognition
Most operating leases must now be recognised on the balance sheet as a right-of-use asset and corresponding lease liability. The old off-balance-sheet treatment for operating leases is gone for most entities.
Expanded lease definition
The revised standard brings a broader definition of what constitutes a lease, including many embedded leases within IT contracts and service agreements that were not previously captured under Section 20.
Increased disclosure requirements
Statutory accounts must now include materially expanded disclosure notes, covering maturity analyses, weighted average discount rates, and a reconciliation of the opening and closing lease liability balance.
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