Your first year-end under the new lease rules is twelve weeks away. The note is not what you think.

For a 31 December year end, the first accounts under the new FRS 102 Section 20 close in twelve weeks. Audit planning meetings are happening now, and the lease note (the note to the accounts that explains your leases: the figures behind the balance sheet and the judgements behind them) comes up in most of them.

Much of the advice in circulation is shaped by IFRS 16, so people expect that note to carry a maturity table of the lease liability. FRS 102 does not ask a lessee for one. That is the lessor's disclosure (paragraph 20.118). What it does ask for is more specific, and most of it has to be built lease by lease.

Here is what the note needs:

1. Which type of discount rate you used, and what proportion of the total liability sits under each type (paragraph 20.77(c)). Implicit rate, incremental borrowing rate or obtainable borrowing rate, chosen lease by lease (paragraph 20.49). This is where "one rate for everything" becomes visible on the face of the accounts.
2. A reconciliation of the right-of-use assets, by class of asset, from opening to closing: additions, disposals, impairments, depreciation and other movements (paragraph 20.81). Not needed for the prior period, since there is none.
3. The profit and loss amounts: interest on lease liabilities, the expense for short-term leases, the expense for low-value leases, variable payments left out of the liability, and the total cash paid out for leases in the year (paragraph 20.80).
4. What is not in the liability: break clauses and extension options not counted in the term, variable payments, and leases signed but not yet started (paragraph 20.77(a)). Also any covenants the leases impose on you (paragraph 20.77(b)). Both are words, not numbers, and they are the part the file reviewer reads first.
5. If you took the short-term or low-value exemption, say so, and give the commitments outstanding in three bands: within one year, one to five years, after five years (paragraph 20.82).

Above all of it sits a general description of your significant leasing arrangements (paragraph 20.76).

Note what item 1 implies. The proportion of the liability under each rate type can only be stated if every lease carries its own rate, its type, and the date it was taken for. That is a register question, not a spreadsheet formula.

Lease102 produces the Disclosure Notes report (rate types with their proportions, interest, total cash outflow, the exemption expenses and the three commitment bands) and the right-of-use assets note with a column per asset class, ready to paste into the accounts. The Disclosure Notes report states on its own face which disclosures it does not cover, so nothing is passed off as complete. The register download lists each lease's rate, its type and the day it applies to.