FRS 102 Lease Disclosures and Maturity Analysis
From 2026 the amended Section 20 puts almost every lease on the balance sheet, so the note that used to carry your lease obligations has been replaced. This page sets out every lessee disclosure the standard actually requires, which of them Lease102 produces for you, and which you still have to write yourself.
The operating lease commitments note has gone
Under the old Section 20 a lessee kept operating leases off the balance sheet and disclosed the total future minimum payments under non-cancellable operating leases in a note. From 2026 that note disappears for any lease you now recognise, because the obligation itself is on the balance sheet as a lease liability. The commitments note survives in one narrow place only: the short-term and low-value leases you have elected to keep off balance sheet.
FRS 102 Reference: FRS 102.20.74 to 20.85 (presentation and lessee disclosure)
| Old Section 20 (to 2025) | Amended Section 20 (from 2026) |
|---|---|
| Operating lease commitments note: total future minimum payments under non-cancellable operating leases | Gone for recognised leases. The obligation is a lease liability on the balance sheet |
| Finance leases only on balance sheet | Almost all leases on balance sheet as a right-of-use asset and a lease liability |
| No right-of-use asset | Right-of-use asset reconciliation by class of underlying asset (20.81) |
| Commitments split into 1 year, 1 to 5 years, over 5 years | That three-band split survives ONLY for short-term and low-value leases (20.82) |
Is a maturity analysis of lease liabilities required?
No, and this is the most common misconception carried over from IFRS 16. The amended Section 20 does not require a lessee to disclose a maturity analysis of its recognised lease liabilities. A maturity analysis is required of lessors, for lease payments receivable (20.118 and 20.121), and of financial institutions, for liquidity risk (34.28), but not of an ordinary lessee. The only maturity bands the standard asks a lessee for are the short-term and low-value commitments in 20.82.
FRS 102 Reference: FRS 102.20.82; contrast 20.118, 20.121 (lessor) and 34.28 (financial institutions)
Why Lease102 still gives you one
Commitments you must still disclose: short-term and low-value
If you take the recognition exemption for short-term leases or leases of low-value assets, you must say so, and disclose the commitment for each of them at the reporting date, in three bands. Note the bands are 1 to 5 years, not the 1 to 2 and 2 to 5 split that a maturity analysis usually shows. The short-term expense and the low-value expense are also disclosed separately.
FRS 102 Reference: FRS 102.20.82 (commitments); 20.5 and 20.6 (the exemptions); 20.80(b) and 20.80(c) (the expense)
| Band | Required by |
|---|---|
| Not later than one year | 20.82(a) |
| Later than one year and not later than five years | 20.82(b) |
| Later than five years | 20.82(c) |
Balance sheet presentation
You may either present right-of-use assets and lease liabilities as separate lines on the balance sheet, or keep them within other captions and say in the notes which lines they sit in. If you do not present right-of-use assets separately, they go in the same line as the underlying asset would have done had you owned it, so a leased building sits within property, plant and equipment. Right-of-use assets that meet the definition of investment property are the exception: they are presented as investment property. Company law still governs the rest of the balance sheet, so the lease liability is split between creditors falling due within one year and after more than one year.
FRS 102 Reference: FRS 102.20.74 (presentation choice); 20.75 (investment property exception)
Amounts to disclose for the period
Section 20 lists the amounts a lessee discloses for the reporting period. Total cash outflow for leases is the one preparers most often forget, and it covers every lease payment, including those on exempt leases.
FRS 102 Reference: FRS 102.20.80
| Amount | Paragraph |
|---|---|
| Interest expense on lease liabilities | 20.80(a) |
| Expense for short-term leases (may exclude leases of one month or less) | 20.80(b) |
| Expense for leases of low-value assets (excluding short-term low-value leases already in (b)) | 20.80(c) |
| Expense for variable lease payments not in the measurement of the liability | 20.80(d) |
| Income from subleasing right-of-use assets | 20.80(e) |
| Total cash outflow for leases | 20.80(f) |
| Gains or losses on sale and leaseback transactions | 20.80(g) |
Right-of-use asset reconciliation by class
For each class of underlying asset you disclose the gross carrying amount and accumulated depreciation at both the start and the end of the period, and a reconciliation of the carrying amount showing additions, disposals, acquisitions through business combinations, revaluations, impairment losses recognised or reversed under Section 27, depreciation, and other changes. Helpfully, the standard says this reconciliation need not be presented for prior periods, so there is no comparative column to build.
FRS 102 Reference: FRS 102.20.81(a) and 20.81(b)
Break clauses, extension options and variable payments
Payments you might make but have not recognised still have to be described. Where it is relevant to understanding your leases, disclose the future cash outflows you are potentially exposed to that are not reflected in the lease liability: variable lease payments, extension options and termination options (break clauses), residual value guarantees, and leases you have committed to but which have not yet commenced. This is qualitative and quantitative information, not a prescribed table, so judgement applies. Restrictions and covenants imposed by your leases are disclosed here too.
FRS 102 Reference: FRS 102.20.77(a) (future cash outflows); 20.77(b) (restrictions and covenants)
The discount rate disclosure most preparers miss
You must disclose which types of discount rate you used, being the interest rate implicit in the lease, the incremental borrowing rate or the obtainable borrowing rate, and the proportion of the total lease liability measured using each type. If you discounted some leases at an implicit rate and the rest at an obtainable borrowing rate, a bare statement that you used the obtainable borrowing rate is not enough: the split has to be given.
FRS 102 Reference: FRS 102.20.77(c)
Other disclosures, when they apply
Several disclosures only bite in particular circumstances, but they are easy to overlook.
FRS 102 Reference: FRS 102.20.76 to 20.85
General description (20.76)
Every lessee gives a general description of its significant leasing arrangements. This is the narrative paragraph that opens the note.
Practical expedients (20.78)
If you applied the portfolio expedient (20.13) or chose not to separate non-lease components (20.33), disclose that fact.
Modifications remeasured at an unchanged rate (20.79)
If you remeasured a liability for a modification and kept the original discount rate under 20.72, disclose that fact and the closing carrying amount of the liabilities remeasured that way.
Sale and leaseback (20.77(d) and 20.80(g))
Disclose your reasons for such transactions and how common they are, the key terms, payments not included in the liability, the cash flow effect in the period, and any gain or loss.
Investment property, heritage assets and revaluation (20.83 to 20.85)
Right-of-use assets that are investment property follow Section 16, and heritage assets follow paragraphs 34.55 to 34.56; in both cases the 20.80(e) and 20.81 disclosures are not required for those assets. Right-of-use assets carried at revalued amounts under Section 17 follow paragraphs 17.31(a) and 17.32A.
What you disclose on transition
Far less than IFRS 16 preparers expect. On first applying the amended Section 20, a lessee provides a description of the transitional provisions it has applied. That is the requirement in full.
FRS 102 Reference: FRS 102 para 1.50
There is no commitments-to-liability reconciliation in FRS 102
Example: the shape of a compliant note
A typical lessee note pulls the pieces above into one place. The figures below are illustrative only.
Leases note (illustrative)
What Lease102 generates, and what you add
Lease102 produces the figure-heavy reports: the Right-of-Use Assets Note and Roll-Forward, the Lease Liability Roll-Forward, the Disclosure Notes, the Maturity Analysis and the Tax Computation. The narrative and judgement-led disclosures are yours to write, because they describe your arrangements rather than your numbers. The Disclosure Notes report is deliberately explicit about its own limits: it lists, on the report itself, every disclosure it does not cover.
| Disclosure | Where it comes from |
|---|---|
| Right-of-use asset reconciliation by class (20.81) | Right-of-Use Assets Note and ROU Roll-Forward |
| Current and non-current split of the liability | Maturity Analysis (the under one year column) |
| Interest expense on lease liabilities (20.80(a)) | Disclosure Notes report (ties to the Lease Liability Roll-Forward) |
| Total cash outflow for leases (20.80(f)) | Disclosure Notes report |
| General description of leasing arrangements (20.76) | You write it |
| Break clauses, extension options, variable payments (20.77(a)) | You write it, using the lease terms held in Lease102 |
| Discount rate types and the proportion using each (20.77(c)) | Disclosure Notes report |
| Modifications remeasured at an unchanged rate (20.79) | Disclosure Notes report |
| Short-term and low-value commitments in three bands (20.82) | You compile it; these leases are exempt and sit outside the recognised figures |
Right-of-Use Assets Note
The traditional UK statutory accounts note for right-of-use assets, ready to paste into your annual accounts. Three stacked sections with asset classes as columns: Cost (opening, additions, recognised on transition, lease modifications, disposals, closing), Accumulated depreciation (opening, charge for the period, impairment, disposals, closing) and Net book value at both the period end and the prior period end (the comparative). Zero movements show as dashes, and the figures reconcile to the Right-of-Use Asset Roll-Forward, which remains available as the flat movements view. Download as PDF or Excel.
The Disclosure Notes report
Reports > Disclosure Notes produces the disclosure amounts we can compute from your leases for a chosen period: interest expense on lease liabilities (20.80(a)), total cash outflow for leases (20.80(f)), the discount rate types you used with the proportion of the total liability measured on each (20.77(c)), and any liabilities remeasured for a modification at an unchanged rate (20.79). Where you have marked leases as exempt from recognition it also gives the short-term and low-value expense (20.80(b) and 20.80(c)) and the commitments outstanding in the three bands 20.82 requires, and it states how many leases apply the 20.33 non-separation practical expedient (20.78). The interest figure is taken from the same schedule as the Lease Liability Roll-Forward, so the two reports tie exactly. Download it as a PDF for the audit file. The report lists, on its own face, the disclosures it does not cover, so it can never be mistaken for a finished note.
FRS 102 Reference: FRS 102 20.77(c), 20.78, 20.79, 20.80(a), 20.80(b), 20.80(c), 20.80(f), 20.82
The discount-rate disclosure is easy to get wrong by hand
Leases you exempt from recognition
FRS 102.20.5 lets you choose not to recognise a short-term lease or a lease of a low-value asset. Tick the exemption on the lease form and the lease stops being measured: no right-of-use asset, no lease liability and no amortisation schedule, and anything it had already accumulated is removed. Its payments become an expense spread evenly over the term instead (FRS 102.20.6). The lease keeps a badge in the lease list so it is never mistaken for a recognised one, and it counts towards your plan's lease capacity in the same way a register-only record does. Marking a lease exempt is reversible: clear the tick and it is measured again.
FRS 102 Reference: FRS 102 20.5 to 20.12, 20.6, 20.7
The commitment bands are not the Maturity Analysis buckets
| Exemption | How it is chosen | What it produces |
|---|---|---|
| Short-term (12 months or less, no purchase option) | By class of underlying asset (20.7), so apply it consistently across that class | 20.80(b) expense and 20.82 commitments |
| Low-value asset | Lease by lease (20.7). Never vehicles, property, production equipment, boats or aircraft, whatever they cost | 20.80(c) expense and 20.82 commitments |
Roll-forwards and the Maturity Analysis
The Right-of-Use Asset Roll-Forward shows opening, additions, depreciation, disposals and closing. The Lease Liability Roll-Forward shows opening, new leases, interest, payments and closing. The Maturity Analysis shows undiscounted payments by time bucket (under 1 year, 1 to 2, 2 to 5, over 5) reconciled to the carrying amount of the liability. As explained above, the Maturity Analysis supports the balance sheet split and is a voluntary disclosure rather than a Section 20 requirement.
Filtering by currency and portfolio
When your portfolio includes leases in multiple currencies, use the Currency tabs at the top of the Reports page to filter any disclosure report by a specific currency (for example GBP, EUR or USD). If no currency is selected, all leases are included. The disclosure and tax reports can also be filtered to a single portfolio using the Portfolio selector, which is useful when you run one portfolio per legal entity and need each entity's figures on their own. Cost centre remains a filter rather than a column, because these reports aggregate by asset class and a lease's cost centre can change within the period.
Fiscal year presets and PDF download
Period-based reports include Current FY and Prior FY buttons that fill the period dates from your fiscal year end (set in Settings, or per portfolio). Use them to run a full-year disclosure without typing dates; the Right-of-Use Assets Note's comparative date follows automatically as the day before the period start. Every disclosure and tax report can be downloaded as a branded, audit-ready PDF, and the Right-of-Use Assets Note can also be downloaded as an Excel workbook for your accounts workings. The PDF respects the same period and currency filters as the on-screen report.
Generate your FRS 102 lease disclosures
Produce the right-of-use asset note, the roll-forwards and the maturity analysis from your own leases, ready for the accounts.