A checklist to prepare for the amendments to FRS 102

The amendments to FRS 102 do pose challenges to reporters, but they also bring opportunities. Pinkesh Patel explains how building an effective conversion project plan can ensure you meet regulatory expectations and take advantage of the benefits.

Before diving into the technicalities of the FRS 102 amendments, I recommend establishing a robust project plan. This will allow you to prioritise actions effectively, ensuring that critical tasks receive timely attention and that nothing falls through the cracks. It also clarifies how individual activities are interdependent, helping you to spot where delays or complications in one area may impact progress elsewhere. By mapping out your approach, you can also more-easily identify where extra resource or specialist input might be needed, whether from within your organisation or from external advisers.

The first step in preparing your conversion project plan is understanding what the updates mean for your business. The changes will have the most impact on earnings before interest, tax, depreciation and amortisation (EBITDA), but they will create waves far beyond the debts and credits. The details can be overwhelming, but the high-level areas can be summarised quite simply.

Debt covenants based on EBITDA or interest cover

Earn-out calculations due to be paid post 1 January 2026

Employee incentive schemes based on EBITDA

Delivery and pricing structure of long-term revenue contracts

Budgeting and forecasting systems and approach

Intercompany trading balances and transfer pricing

The second step is completing a conversion impact assessment. Taking the time to prepare for your conversion will give you and your auditors comfort that all the amendments have been considered and help you identify any outstanding actions in your project.

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Your FRS 102 conversion impact assessment

This checklist will help you understand where you are in the process.

✔	Confirm if additional resources are required, and agree roles and responsibilities
✔	Identify and engage with key stakeholders
✔	Understand training needs of finance team and wider stakeholders
✔	Identify all leases in scope and gather relevant data
✔	Understand revenue streams and contract population for each
✔	Engage with external auditor to confirm requirements and additional audit work required
✔	Confirm system requirements and areas of improvement
✔	Prepare conversion technical papers (including quantification, disclosures and policies)
✔	Consider wider business impact through discussions with stakeholders
✔	Update financial reporting processes and controls based on conversion work performed
✔	Update budget and forecasts, and amend processes for business-as-usual

In this video I share a framework for managing the transition, and discuss the challenges you could experience during the process.

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A robust project plan is the foundation for a successful transition, providing clarity, direction, and the flexibility needed to navigate change. By actively engaging all stakeholders (eg, sales teams, procurement and the external auditor) throughout the journey, you build alignment, foster transparency, and minimise the risk of unwelcome surprises at the finish line. While no plan can predict every twist and turn, a well-structured approach ensures you have the space to adapt, respond proactively, and keep your objectives on track, even when the unexpected arises.

For more insight and guidance, get in touch with Pinkesh Patel.