# UK GAAP frameworks: FRS 105, FRS 102 Section 1A and FRS 102

Source: https://www.statutoryaccounts.io/guides/uk-gaap/

Last reviewed: 26 October 2026

UK GAAP for most companies is set by the Financial Reporting Council. A micro-entity may use FRS 105, a small company usually uses FRS 102 Section 1A, and medium-sized and large companies use full FRS 102. Changes from the 2024 periodic review apply to periods beginning on or after 1 January 2026.

## Key facts

| | |
| --- | --- |
| FRS 105 | Micro-entities using the micro-entity provisions: historical cost only, no deferred tax, notes at the foot of the balance sheet |
| FRS 102 Section 1A | Small companies: reduced presentation and disclosure, no statement of cash flows; full FRS 102 is allowed |
| Full FRS 102 | Medium-sized and large companies: complete set including the statement of changes in equity and statement of cash flows |
| Periodic Review 2024 | Periods beginning on or after 1 January 2026: new revenue model, leases on the lessee's balance sheet under FRS 102 |
| Size thresholds amendment | Financial years beginning on or after 6 April 2025, following the new company size thresholds |

As at 25 October 2026.

## FRS 105 for micro-entities

Accounts that follow the micro-entity minimum are presumed to give a true and fair view (Companies Act 2006, s396). The trade-offs: no revaluations or fair values, no deferred tax, and only a balance sheet with notes at its foot plus a profit and loss account. A micro-entity may choose FRS 102 Section 1A instead, for example to revalue property.

## FRS 102 Section 1A for small companies

Section 1A keeps the recognition and measurement of FRS 102 but reduces what a small company must present and disclose. For periods beginning on or after 1 January 2026 a small company must state that it complies with FRS 102 and applies Section 1A, explain its going concern assessment and disclose dividends; before 2026 these were only encouraged.

## What changed from 1 January 2026

- Revenue: FRS 102 Section 23 follows a five-step model based on IFRS 15, with simplifications.
- Leases: under FRS 102 a lessee brings most leases onto the balance sheet as a right-of-use asset and a lease liability, with exemptions for short-term and low-value leases. FRS 105 keeps the old split between operating and finance leases.
- FRS 105: its revenue section was rewritten; it applies to contracts that begin after first application.

## Frequently asked questions

**Can a micro-entity use FRS 102 Section 1A instead of FRS 105?**
Yes. FRS 105 is optional for a company that qualifies for the micro-entity provisions. A micro-entity that wants to revalue assets or give fuller notes can use FRS 102 Section 1A.

**Does a small company need a statement of cash flows?**
No. FRS 102 exempts small entities from the statement of cash flows. Medium-sized and large companies must present one unless another exemption applies.

**What is the Periodic Review 2024?**
The FRC's update of FRS 102 and the other UK standards, issued on 27 March 2024. It applies to periods beginning on or after 1 January 2026 and brings a new revenue model and on-balance-sheet lease accounting for lessees under FRS 102.

## Sources

- [FRC: FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland](https://www.frc.org.uk/library/standards-codes-policy/accounting-and-reporting/uk-accounting-standards/frs-102/)
- [FRC: FRS 105 The Financial Reporting Standard applicable to the Micro-entities Regime (September 2024)](https://www.frc.org.uk/documents/7662/FRS_105_September_2024_V7owJHN.pdf)
- [FRC: amendments to FRS 102 and other FRSs, Periodic Review 2024](https://www.frc.org.uk/documents/7128/Amendments_to_FRS_102_and_other_FRSs.pdf)
- [FRC: amendments to FRS 102 and FRS 105 for the UK company size thresholds (March 2025)](https://www.frc.org.uk/news-and-events/news/2025/03/frc-releases-updates-to-reflect-company-size-threshold-amendments/)
- [Companies Act 2006, section 396](https://www.legislation.gov.uk/ukpga/2006/46/section/396)
- [The Small Companies and Groups (Accounts and Directors' Report) Regulations 2008 (SI 2008/409), Schedule 1](https://www.legislation.gov.uk/uksi/2008/409/schedule/1/part/1)

## Related pages

- [Statutory accounts for UK companies](https://www.statutoryaccounts.io/guides/statutory-accounts/)
- [Filing accounts at Companies House](https://www.statutoryaccounts.io/guides/companies-house-filing/)
- [Company size: micro-entity, small, medium-sized or large](https://www.statutoryaccounts.io/guides/company-size/)
- [Directors' report and strategic report](https://www.statutoryaccounts.io/guides/directors-and-strategic-reports/)
- [Corporation Tax and the CT600 return](https://www.statutoryaccounts.io/guides/corporation-tax/)