This factsheet signposts key developments in corporate reporting that will affect the preparation of an annual report and accounts by UK GAAP reporters for accounting periods beginning on or after 1 January 2026.
Please note
This page highlights key headlines from the 2026 UK GAAP Accounts factsheet and signposts where further detail can be found within the factsheet. It is not a substitute for reading the factsheet in full.
Introduction
Significant amendments to UK GAAP become effective from 1 January 2026, representing the biggest changes since the introduction of ‘new UK GAAP’. For FRS 102 preparers, the changes introduce major revisions to revenue recognition and lease accounting for lessees, bringing the standard more closely into alignment with IFRS ® Accounting Standards. A range of incremental improvements and clarifications across other areas have also been introduced, with potentially significant impacts for some entities. For FRS 105 preparers the changes introduce a single revenue recognition model, based on a simplified version of the new FRS 102 model, together with consequential amendments and other targeted improvements. However, no changes have been made to lease accounting requirements under FRS 105.
Preparers should ensure they take time not only to understand the requirements, but also to assess their impact and implement any necessary changes to systems, processes and accounting policies.
Current reporting environment
Businesses continue to operate in a volatile environment, shaped by continuing economic uncertainty, geopolitical disruption, global conflicts and associated trade frictions. Corporate reporting should clearly reflect how such uncertainties are impacting on an entity’s financial position, performance and prospects.
Regulators have repeatedly emphasised the need for disclosures to be entity-specific, including all material and relevant information. Entities are encouraged to step back and consider whether the annual report and accounts as a whole tell a coherent and consistent story through the narrative reporting and financial statements as well as being clear, concise and understandable.
The precise manner in which, and extent to which, these issues will affect a business will depend on individual facts and circumstances. Some areas that may be affected include significant judgements and estimates, impairment testing and going concern.
FRS 101 amendments
FRS 101 Reduced Disclosure Framework allows qualifying subsidiaries and parent companies to apply IFRS Accounting Standards while benefiting from reduced disclosure requirements. Preparers therefore need to be mindful of both changes to the recognition, measurement and disclosure requirements of IFRS Accounting Standards, and changes to the disclosure exemptions permitted by FRS 101, including their effective dates.
The Amendments to FRS 101 – 2025/26 cycle made limited changes to FRS 101, which are effective from the date of issue (May 2026).
The Amendments to FRS 101 – 2024/25 cycle, published in May 2025, introduced several changes. While some of these amendments became effective on publication, others are linked to the adoption of IFRS 18 and IFRS 19 and are therefore relevant to future accounting periods.
FRS 102 amendments
Significant amendments to FRS 102 take effect for accounting periods beginning on or after 1 January 2026 as a result of the Periodic Review 2024. These include major changes to revenue recognition and (for lessees) lease accounting, amendments to disclosure requirements for UK small entities, and a range of incremental improvements and clarifications affecting many areas of the standard.
Separately, amendments to the UK company size thresholds, which are effective for financial years beginning on or after 6 April 2025, will affect many companies for the first time in 2026.
In addition, entities that choose to use adapted balance sheet and profit and loss formats may wish to early adopt the related amendments (Amendments to FRS 102 and FRS 105 – Adapted formats) ahead of their mandatory effective date of 1 January 2027.
FRS 105 amendments
The Periodic Review 2024 amendments, effective for accounting periods beginning on or after 1 January 2026, introduce significant updates to FRS 105. These include the introduction of a single five-step revenue recognition model, together with targeted improvements and clarifications to maintain consistency across the standard.
There are no changes to lease accounting under FRS 105.
The amendments relating to changes in UK company size thresholds, which are effective for financial years beginning on or after 6 April 2025, will also affect many micro-entities for the first time in 2026.
Other UK accounting standards
Other changes
Recent regulatory developments include changes to AIM rules to permit UK-incorporated AIM companies to use FRS 102, and amendments to company size thresholds, directors’ report requirements and remuneration disclosures. Future legislative changes have been announced in respect of narrative reporting and Companies House filing requirements, and the government has separately launched a consultation on modernising corporate reporting. In addition, the sustainability reporting framework continues to evolve in the UK and Europe.
Download the factsheet
Read the full 2026 UK GAAP Accounts factsheet.
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The Corporate Reporting Faculty aims to help members keep up to date with the implications of new standards, regulations and practice in corporate reporting. This factsheet is part of a series designed to provide practical help to ICAEW members and Corporate Reporting Faculty subscribers in exercising their professional judgement.
