The key changes are the revised FRS 102 requirements for leases and revenue recognition, higher company size thresholds, the introduction of IFRS 18, and mandatory software-only accounts filing at Companies House. Together, these changes can affect financial reporting, audit requirements, banking arrangements, KPI reporting, and compliance processes. Businesses should assess which changes apply to them and start planning well before their reporting periods are affected.

Any business preparing accounts under FRS 102 should assess the impact of the updated standard. The most significant effects are typically seen where a company has property leases, equipment leases, vehicle fleets, or complex customer contracts. Even where reported profits do not change significantly, the accounting treatment may alter how assets, liabilities, revenue, and performance measures appear in the financial statements.

Bringing most leases onto the balance sheet can increase reported liabilities and change key financial ratios. As a result, existing banking covenants, borrowing limits and internal KPIs may produce different results even where the underlying business has not changed. Businesses with significant leased property or equipment should discuss potential impacts with lenders early to avoid unexpected covenant issues.

Not necessarily. The change is primarily an accounting change rather than a change in commercial reality. Businesses have always had contractual lease commitments, but many operating leases were previously reported off the balance sheet. The revised rules bring these obligations into the financial statements as lease liabilities, making them more visible to investors, lenders, and other stakeholders.

Revenue recognition is moving to a more structured five-step model that focuses on contracts, performance obligations, pricing and the timing of delivery. For straightforward transactions, the impact may be limited. However, businesses with long-term contracts, multiple service components, subscription arrangements, or bespoke customer agreements may need to review how and when revenue is recognised. Contract reviews can help identify areas where accounting treatment may change.

Potentially, yes. Some companies that previously exceeded the thresholds for a statutory audit may fall into a lower size category under the revised limits. However, eligibility depends on meeting at least two of the relevant criteria for the required period, and the rules can be complex. Businesses close to the thresholds should seek advice, particularly if growth, restructuring, or accounting changes may affect their classification.

Yes. This is a commonly overlooked consequence of the FRS 102 amendments. Recognising lease assets on the balance sheet can increase gross assets, which may affect company size calculations. In some cases, a business could move into a larger reporting category despite the increase in the statutory size thresholds. The interaction between these two changes should be reviewed carefully.

  IFRS 18 is a new financial reporting standard that replaces IAS 1 for affected businesses from accounting periods beginning on or after 1 January 2027. It applies mainly to organisations reporting under IFRS and has implications for entities using FRS 101. The standard introduces new presentation requirements, categories of income and expenses, and additional disclosures aimed at improving consistency and transparency in financial statements.

No. IFRS 18 changes how financial performance is presented rather than how profit is calculated. Net profit remains the same, but businesses may need to report different subtotals and explain management-defined performance measures such as adjusted EBITDA. Companies should review reporting frameworks, management reporting packs, remuneration arrangements, and lending agreements that rely on specific performance metrics.

From April 2028, companies will need to submit accounts electronically through approved software rather than using existing filing methods. The changes arise from the Economic Crime and Corporate Transparency Act 2023 and are designed to improve the quality and reliability of information held by Companies House. Businesses that still rely on manual processes or unsupported systems should begin considering how their accounts production and filing processes will operate in a fully digital environment.

Yes. Although some previously proposed disclosure requirements have been relaxed, the move to electronic filing affects companies of all sizes. Small companies and micro-entities should ensure that their accounts preparation process is compatible with commercial software and that internal teams understand future filing requirements. Leaving preparations until 2028 could create unnecessary compliance pressures.

The best time is as early as possible. Some changes are already effective, while others require retrospective information, contract reviews, covenant assessments, or system updates. Early preparation provides time to evaluate impacts on financial statements, tax planning, reporting obligations, audit requirements, banking relationships, and business decision-making. A structured impact assessment can help identify priorities and avoid last-minute surprises.