New FRS 102 and the impact on Social Housing
New FRS 102 and the impact on Social Housing
Our latest FRS 102 guidance provides a comprehensive review of the significant changes to FRS 102. We have highlighted areas which are most likely to impact the social housing sector from 1 April 2026. Organisations affected will need to collect specific data, make significant estimates and judgements and implement systems/tools before that date. We will also be holding a webinar on 3 April to talk through the key changes and impact on the sector, for which you can register now.
While we are still awaiting the issue of the updated Housing SORP, which may impact on how the changes impact the sector, the earlier you understand the impact of the new standard on your housing association, the more you will be able to minimise implementation costs and compliance risks as you will have more time to iron out potential issues.
Particular areas to consider include:
Leases
- What type of leases does your housing association have? Are there embedded leases within non-lease contracts?
- Do you have copies of all your lease agreements for review?
- Does your finance team have the required knowledge on the new lease Requirement?
- Are your operational departments, such as facilities management, aware of the need to identify, collate and report to your finance team any contracts that could potentially contain lease components?
Revenue
- Does your housing association have revenue contracts that contain multiple goods/services? These will require unbundling. Where contract terms are subject to specific negotiation for different customers, you will need to ensure the right revenue recognition policies are applied to relevant differences.
- Does your finance team understand the five step model, and which revenue streams might be impacted?
- Does your housing association have contracts with variable consideration, contract modifications, discounts/rebates and other complexities? These may need detailed and significant accounting judgements and estimates
- Is your finance team up to speed with the new revenue standard?
If you have any questions about the changes to FRS 102 and its impact on your organisation, please contact Hamid or your usual BDO contact.