FRS 102 Periodic Review 2024: Transition, Disclosures and What Else Changed

If you've only heard about two things from the FRC's overhaul of FRS 102, they're probably revenue recognition and lease accounting — and with good reason, since those are the changes with the biggest impact on the primary financial statements. But the exercise behind them, the Periodic Review 2024, touches far more of the standard than that. For accountants and finance teams preparing for periods beginning on or after 1 January 2026, the practical challenge isn't just the two headline topics — it's the transition mechanics, the disclosure changes, and a set of amendments the FRC is still fine-tuning as late as early 2026.

One correction worth making up front: this exercise is officially the Periodic Review 2024, not the "triennial review." That name belongs to the FRC's previous overhaul, completed in 2017. The FRC deliberately dropped "triennial" this time round because it no longer commits to reviewing FRS 102 on a fixed three-year cycle — so if you're reading older commentary or internal notes that still say "triennial review 2026" or similar, treat that as outdated terminology rather than a different project.

The headline changes, in brief

Revenue recognition sees FRS 102 move to a five-step model closely based on IFRS 15, replacing the old risks-and-rewards approach with one built around identifying performance obligations and recognising revenue as they're satisfied. It's a genuine shift in how contracts with customers are analysed, particularly for entities with bundled products, long-term contracts, or variable consideration. We've covered the detail — including transition choices — in a dedicated post on how revenue recognition is changing under FRS 102.

Lease accounting is the other big one: Section 20 moves lessees to an on-balance-sheet model much closer to IFRS 16, bringing most operating leases onto the balance sheet as a right-of-use asset and a lease liability for the first time. For most SMEs and their advisers, this is the change with the most visible impact on gearing and covenant calculations. We've written a full practical guide to the lease changes in detail, including how to handle the transition.

This post won't repeat that ground. Instead, it's about everything else in the Periodic Review 2024 — and about the mechanics of getting through the transition itself.

It's not just revenue and leases: the full scope of the Periodic Review 2024

As KPMG UK put it in its own commentary on the changes, "it's not just revenue and leases." A genuinely wide set of sections has been amended, and several of them will catch out practitioners who assume the Periodic Review 2024 begins and ends with the two headline topics.

• Fair value measurement (new Section 2A): a new section replaces the old scattered appendix guidance and aligns FRS 102's fair value framework much more closely with IFRS 13, including a clearer fair value hierarchy. It's applied prospectively, so there's no need to restate prior fair value measurements.
• Concepts and pervasive principles (Section 2): rewritten to align with the IASB's 2018 Conceptual Framework, updating the definitions of assets, liabilities, income and expenses that underpin the rest of the standard.
• Business combinations (Section 19): incorporates IFRS 3 concepts, including clearer guidance on identifying the acquirer in a combination and on recognising and measuring contingent consideration.
• Uncertain tax treatments (Section 29): new guidance based on IFRIC 23 principles gives preparers a structured approach to recognising and measuring uncertain tax positions — an area FRS 102 previously said very little about directly. This is generally applied prospectively.
• Financial instruments: the option for entities to newly adopt IAS 39's recognition and measurement rules is withdrawn for new adopters going forward. IFRS 9 remains available as an accounting policy choice, alongside the existing Sections 11/12 approach.
• Supplier finance arrangement disclosures: new disclosures covering the terms of supplier finance arrangements, the carrying amounts involved, and payment dates. This one is worth flagging separately because it moves faster than the rest — it applies to periods beginning on or after 1 January 2025, a full year ahead of the main Periodic Review 2024 changes.

Grant Thornton NI's guidance for practitioners makes the same point in different words: treat this as a whole-standard update, not a two-topic update, when you're scoping out client impact.

Transition mechanics: the method depends on the topic

One of the more confusing aspects of the Periodic Review 2024 is that "transition" doesn't mean the same thing for every section. Deloitte's IAS Plus "Need to know" guidance is useful here because it lays the differences out topic by topic rather than treating transition as a single blanket rule:

• Leases: modified retrospective transition only. There's no option for full retrospective restatement — lessees recognise a lease liability and right-of-use asset at the date of initial application, with no restatement of comparatives.
• Revenue: here entities get a genuine choice — full retrospective application (restating comparatives as if the new model had always applied) or modified retrospective application (applying the new model only from the date of initial application, with a cumulative catch-up adjustment to opening equity).
• Fair value measurement and business combinations: both are applied prospectively. There's no restatement of prior transactions or measurements — the new guidance simply applies from the effective date forward.
• Uncertain tax treatments: generally applied prospectively too, with any transition adjustment taken through opening equity rather than restating prior periods.

The practical upshot: don't assume a single transition approach will do for a whole set of clients. Leases and revenue need a specific, documented transition decision each; the other sections mostly just need a clean prospective cut-over, which is simpler but still needs to be recorded and explained.

Disclosure requirements are changing too

The Periodic Review 2024 also brings a set of disclosure changes that are easy to overlook next to the recognition and measurement changes, but which affect every entity reporting under FRS 102, including small companies under Section 1A. Per KPMG UK's analysis, the key shifts are:

• A move from disclosing "significant" accounting policies to disclosing "material" accounting policy information — a subtle wording change with a real effect, since it pushes preparers towards entity-specific judgement rather than boilerplate policy notes.
• New guidance distinguishing between a change in accounting estimate, a change in accounting policy, and the correction of a prior period error — three categories that are treated very differently in the financial statements but have often been muddled in practice.
• Explicit disclosure of the judgements management has made in assessing going concern, not just the going concern conclusion itself.
• Expanded minimum disclosures for small entities reporting under Section 1A, covering going concern, provisions, contingent liabilities, share-based payments, deferred tax and transition — a meaningful increase in what was previously a fairly light-touch disclosure regime.

For firms with a large small-company client base, that last point deserves particular attention: Section 1A accounts have traditionally been short, and the expanded minimum disclosures mean templates and checklists need updating well before the first affected year-end.

A moving target: FRC clarifications into 2026

Here's something worth building into your planning: the Periodic Review 2024 amendments aren't frozen as originally published in March 2024. The FRC issued further clarifications to the amendments on 18 February 2026, and ICAEW guidance published in March 2026 flags additional points practitioners should be aware of as the effective date approaches. In other words, the standard has kept moving in the two years between the original amendments and their effective date.

Separately — and it's important not to conflate the two — the FRC has also issued an "adapted formats" amendment, a presentation-only change to the statutory formats available to small and micro-entities, which applies to periods beginning on or after 1 January 2027. That's a different amendment, on a different timeline, dealing with presentation rather than recognition, measurement or disclosure substance. Don't let the two run together in your planning documents.

The practical takeaway is simple: work from the current FRC factsheets and application guidance, not from your notes or client briefings based on the original March 2024 documents. If you or your firm produced technical guidance in 2024 or 2025, it's worth a quick check against the latest FRC versions before the 2026 year-end reporting season gets underway.

A practical 2026 readiness checklist

With the effective date now live for periods beginning on or after 1 January 2026, Thomson Reuters UK/EMEA and KPMG both frame readiness around four broad workstreams:

• Impact and gap assessment: work out which clients or entities are most exposed. Priority candidates include those with material property or vehicle leases, complex or bundled customer contracts, active supplier finance arrangements, uncertain tax positions, and Section 1A small-entity reporters who'll feel the expanded disclosure requirements most acutely relative to their previous reporting.
• Policy development and judgement documentation: new accounting policies need to be drafted and approved, and — particularly for fair value measurement, business combinations and uncertain tax treatments — the judgements behind them need to be documented as you go, not reconstructed after the fact.
• Systems and data readiness: lease registers, contract data for revenue analysis, and the data needed to support new disclosures (supplier finance terms, going concern judgements) all need to exist in a usable form before the first affected reporting cycle closes.
• Early stakeholder and client communication: balance sheet changes — particularly from lease capitalisation — can move gearing ratios and trip covenant thresholds. Flagging that to clients, lenders and other stakeholders well ahead of the first affected accounts avoids awkward conversations at signing.

None of this is a one-off technical read-through. It's a genuine change programme, even for firms whose clients are mostly straightforward small companies — arguably more so for those firms, given how much the Section 1A disclosure requirements have expanded. If you want a structured way to get your team up to speed on the full Periodic Review 2024 scope, Learnsignal's CPD courses cover the standard in depth, alongside the practical transition and disclosure points that tend to get missed when the focus stays fixed on revenue and leases alone.