Accounting for Leases: Practical Workshop

OBJECTIVES

This session will take a practical look at the new requirement to put leases on the balance sheet for periods commencing 1 January 2026 under FRS 102. The session will contain multiple worked examples and some case studies to illustrate the points made.

KEY TOPICS

The session will cover the following, using worked examples and case studies to aid learning:

NEW FRS 102

• Effective date
• Implications

CHANGES TO LEASE ACCOUNTING

• On-balance sheet lease accounting
• What is present value?
• Example:
• Subsequent measurement
• Impact on the accounts

LEASE ACCOUNTING EXEMPTIONS

• Is it a lease?
• Non-lease items
• Identified asset
• Right to obtain economic benefits from use
• Short term leases
• Disclosure
• Leases of assets of low value
• Disclosure

CALCULATING THE LEASE LIABILITY

• Lease term
• The contractual terms and conditions compared with market rates
• Significant leasehold improvements
• Termination of the lease
• Importance of the underlying asset
• Conditions for exercising the option
• Month-to-month or ‘evergreen’ leases
• Lease payments
• Remeasurement of lease liability
• Discount factor

CALCULATING THE ROU ASSET

• Dilapidations, reinstatement and remediation

LEASES – THE TRANSITION

• Lease incentives on transition to FRS 102 (September 2024)

LEASES – DISCLOSURE

• Small and non-small companies
• What does it mean in practice?

WHO SHOULD ATTEND

This course is relevant for all those who will be preparing or advising on accounts prepared under FRS 102 (September 2024).