FRS 102 Transition Opening Balance Calculations

Lease Liability

Present value of remaining payments at transition.

ROU Asset

Equal to the liability, increased by pre-transition prepayments and reduced by accruals (FRS 102 para 1.51(b)). Group companies already preparing IFRS 16 figures may instead carry over their IFRS 16 amounts (para 1.48).

FRS 102 Reference: FRS 102 para 1.51(b)

Correcting a transition: Recalculate

Recalculate on the lease row re-runs the calculation with new inputs and replaces the stored opening balances. The screen shows the stored figures before you start, and a previous versus new comparison once it finishes, so you can see exactly what moved.

When an edit puts the opening balance out of date

The opening balance is measured at your transition date over the payments still due after it, so changing any of those payments leaves it out of date. Moving the rent day, changing the rent, the frequency or the end date, or correcting the prepaid or accrued figure all do this. Saving the lease does not reprice the opening balance on its own: repricing it from the start of the lease would answer a different question, and the figure may already have been reported. Lease102 tells you instead. The lease form warns you before you save, the save itself confirms whether the opening balance is now out of date, and the schedule and all three exports carry the warning until you put it right with Recalculate.

FRS 102 Reference: FRS 102 para 1.51(a)

Schedules that do not balance

Over the life of a lease the opening balance plus the interest must equal the payments. Where a schedule ends anywhere other than zero, Lease102 says so on the schedule, on the CSV, Excel and PDF exports, and in Close Checks, which will not call the period clean until it is resolved. The usual cause is an opening balance that has gone out of date, so start with Recalculate on the Transition screen. Two schedules end away from zero legitimately and are never flagged: one shortened to the display limit, and one for a lease terminated early.

FRS 102 Reference: FRS 102 para 20.49

Starting again: Reset

Reset clears the stored calculation entirely and returns the lease to Transition required, as though it had never been calculated. The lease is measured from its start date again until you calculate it afresh. Prepaid and accrued rent are kept, because they describe the position before transition rather than the result of the calculation. Reset when the inputs were wrong from the start; Recalculate when you are adjusting a figure. A lease that has since been modified or impaired cannot be reset, because those figures are measured from the opening balances a reset would clear: use Recalculate on that lease instead.

If the journals are already posted

Where journals for the lease have already been sent to your accounting system, or marked as posted, both Recalculate and Reset ask you to confirm first. The posted journals were built from the old figures and do not change, so until you correct them at your end, Lease102 and your ledger will show different amounts for that lease.