What are the new FRS 102 Amendments?
The revised FRS 102 requirements could have a significant impact on manufacturers, particularly those with long-term contracts, complex pricing arrangements and substantial leased assets. Businesses will need to assess when control of goods transfers to customers, identify separate performance obligations and consider the treatment of installation services, variable consideration, contract modifications and warranties.
Why does this matter as a Manufacturer?
The new lease accounting model could also materially affect manufacturers with leased factories, offices, vehicle fleets and equipment, bringing more assets and liabilities onto the balance sheet. Together, these changes could alter the timing of reported revenue and profit, EBITDA, net assets and key financial ratios, with potential implications for forecasting, banking covenants and stakeholder reporting. Early review of contracts, Incoterms, lease arrangements and accounting systems will therefore be important.
You can now access full coverage and guidance on how these latest FRS 102 changes will impact the Manufacturing Sector.
