Annual financial reporting: FY26 illustrative accounts

Significant amendments to FRS 102 are effective for periods beginning on or after 1 January 2026. 

The most important changes relate to Section 23 Revenue from contracts with customers and Section 20 Leases, which have been revised to align more closely with IFRS 15 and IFRS 16, respectively. Changes have also been made to Section 2 Concepts and Pervasive Principles, including the introduction of a new section on fair value measurement. There are also various improvements, clarifications, and consequential changes across several other sections.  

Together, these changes may have wide‑ranging implications for reported results, distributable reserves, remuneration schemes and covenant compliance, reinforcing the importance of early clarity and robust preparation.

FY26 illustrative accounts

An example annual report and financial statements for the year ended 31 December 2026 designed to support confident year-end reporting. These include major updates to revenue recognition and lease accounting in line with the amendments to FRS 102.  

Download [29156 kb]

What the FY26 illustrative accounts cover  

The illustrative accounts:  

• Apply the FRS 102 and Companies Act 2006 requirements effective for accounting periods beginning on or after 1 January 2026.  
• Show the key updated disclosures arising from the amendments to FRS 102, with detailed disclosures in areas of change, namely leasing and revenue, including transition impact, enhanced accounting policies, and significant judgements relating to application. Where relevant, guidance is provided throughout the accounts on disclosure requirements.
• Demonstrate the requirements of the Strategic Report and Directors’ Report, incorporating the changes applicable to periods beginning 6 April 2025, and now includes a Non-financial and Sustainability Information Statement addressing the climate‑related disclosures in line with the Companies (Strategic Report) (Climate‑related Financial Disclosure) Regulations 2022 for those entities in scope.
• Are based on a fictional, large privately owned UK parent company with a global group structure, designed to reflect a broad range of common transactions and reporting scenarios across multiple sectors.  

Download now

How you can use the illustrative accounts

These accounts are intended to:  

• Support preparers in understanding presentation and disclosure expectations under the amended FRS 102.  
• Provide a technical reference point that shows what good looks like in practice, rather than acting as a checklist.  

While they help you move through the transition with greater control and predictability, they are not exhaustive and may not include all disclosures required in every scenario. 

We have made choices over the activities, transactions, balances to include and accounting and presentation policies to apply, drawing on the flexibility permitted by the requirements. Tailoring to your organisation’s specific circumstances remains essential.  

Download now

Important considerations  

While every care has been taken in preparing these materials:  

• They do not replace the requirements of FRS 102 or company law.  
• Professional judgement is critical, particularly in areas that involve accounting estimates and measurement uncertainty, and in the application of accounting policies.
• Independent advice should be sought when applying the requirements to your own situation.
   

Resources

FY26 illustrative accounts

An example annual report and financial statements aligned to FRS 102 amendments effective for accounting periods beginning on or after 1 January 2026.

Download [ 29156 kb ]

2025 hot topics for FRS 102 reporters

Key current matters to consider when preparing financial statements, including future developments and recent FRC publications.

Download [ 644 kb ]

Summary guide: 2024 amendments to FRS 102  

A breakdown of the key changes arising from the Periodic Review 2024, distinguishing between fundamental changes, incremental improvements and minor clarifications.

Download [ 4944 kb ]

FY24 illustrative accounts  

An example annual report and financial statements for the year ended 31 December 2024, remaining relevant for entities reporting for periods beginning before 1 January 2026. 

Download [ 5339 kb ]

Get in touch

If you would like support applying these requirements to your own transactions or disclosures, our specialists can help. For more information, get in touch with Chris Smith.