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Calculate how the new lease accounting standard affects your balance sheet, EBITDA, and profit. No signup required.
Total annual rent for a single lease or your entire portfolio
Your obtainable borrowing rate (OBR). Typically SONIA + credit spread.
Assumptions: Present value of annual payments in arrears at the discount rate entered, with annual compounding. ROU Asset equals the lease liability (no incentives, direct costs, or restoration provision). Straight-line depreciation over the lease term. This reflects a modified retrospective approach under FRS 102 Section 20.
New Lease Liability
£432,948
This debt appears on your balance sheet from Day 1
EBITDA Increase
+£100,000
Rent moves below the EBITDA line (now depreciation + interest)
Year 1 P&L Comparison
Under FRS 102, your lease is treated like a mortgage: a large liability at the start that you pay down over time. This creates a "front-loading" effect on your P&L.
Depreciation is flat
You write off the asset evenly: £86,590 every year.
Interest reduces over time
Interest is calculated on your remaining debt. Year 1: £21,647. By Year 5: near zero.
| Year | Old (Rent) | New (Dep + Int) | P&L Impact |
|---|---|---|---|
| Year 1 | £100,000 | £108,237 | -£8,237 |
| Year 2 | £100,000 | £104,319 | -£4,319 |
| Year 3 | £100,000 | £100,206 | -£206 |
| Year 4 | £100,000 | £95,887 | +£4,113 |
| Year 5 | £100,000 | £91,351 | +£8,649 |
| Total | £500,000 | £500,000 | £0 |
Key takeaway: Over the full 5 years, the total expense is exactly the same. You're not losing money — you're recognising the cost earlier in the lease term rather than spreading it evenly. The "crossover" happens around Year 4, when the new method becomes more favourable.
Simplified estimate. Actual calculations depend on payment timing, escalation clauses, incentives, and other lease terms. Read our FRS 102 Section 20 guide for the full methodology, or use Lease102 for accurate compliant calculations.
Complete reference for FRS 102 Section 20 lease accounting rules and transition requirements.
Learn moreLearn how to use Lease102 for audit-ready calculations, journal entries, and disclosures.
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