FRS 102 Changes – Modelling solutions

The Financial Reporting Exposure Draft 82 (‘FRED 82’) proposes a suite of changes to UK GAAP. The proposed amendments seek to provide greater consistency and alignment to international accounting standards.

FRED 82 has an anticipated effective date of accounting periods beginning on or after 1 January 2026. Details of what exactly these changes are can be found here. 

KPMG’s Financial Modelling team are on hand to support you with adoption of changes to FRS 102. With the experience we gained in helping our clients for the adoption of changes to IFRS 15 and IFRS 16, we can offer an off-the-shelf solution or bespoke custom models for addressing your Lease accounting, revenue recognition and other transition needs.

Additionally, where required, we can provide a fully integrated team of experts (Accounting, Tax and Technology) to assist throughout the implementation journey. Do please reach out if you require support or require further information.

1. KPMG Off-the-Shelf Solution for Lease Accounting
   The accounting calculator will allow you to feed in your lease information and calculate both the transition impact and forecast future FRS 102 balances to optimise budgets on the basis of proposed changes to UK GAAP. If you are already developing a solution in-house, our calculator can also be used as a validation tool to help in the development process.
2. Impact Assessment and Quantification
   We can build bespoke calculation modules for Lease and Revenue contracts to calculate the impact on your financials and KPIs post transition so that you are better prepared when the transition happens. This can also help in your move to a sustainable long-term post-transition solution.
3. Tax Impact Calculator
   We can help you model the impact on your Tax commitments due to the changes to FRS 102 linking with your existing tax calculations/systems. We can also build customised solutions for you to use as a stop gap while you are in the process of building an in-house transition solution.
4. Post Transition
   Using experienced resources with sector and technical knowledge, we design and build complex models for reporting and decision making purposes. We can build financial models for budgeting and forecasting purposes post transition including effective management of working capital and Cash reserves. We can also support you with integration of solution to ERP systems; change processes and internal control; amendment to reporting requirements.

• Fast deployment – off the shelf solution, no further tailoring required;
• Cost effective – one-off payment for an ongoing solution;
• Versatile usage - Model can be used on transition to calculate transition impact and to support on going accounting either as the main Transition solution or on transition or Plan B before a software solution is implemented;
• Model built in Excel – known environment for finance people and easy to audit;
• Accounting and Budget/Forecast – model provides journal entries for posting in ERP and includes planning and forecasting functionalities;