16 01732 759725 accountants were only too happy to emphasise when presenting a client’s finances. New rules are designed to remove some of this opacity. When FRS 102 adopts IFRS 16-style rules from 2026, laptops and similar IT devices will continue to qualify for the low-value asset exemption.3 The same is also true for larger firms operating under IFRS 16. In this white paper, we will: Explain the changes to FRS 102 and IFRS 16. Clarify how and why leases of new computers typically qualify for the low value exemption if elected. Examine the financial case for leasing laptops versus buying them. Explore why confusion persists in the sector. Set out why leasing IT subscription services are a compelling option for businesses today. What is FRS 102 and why the changes? FRS 102 is the Financial Reporting Standard applicable in the UK and Republic of Ireland.4 From 1 January 2026, amended FRS 102 will require most leases to be recognised on the balance sheet. This mirrors the guidelines set out in IFRS for your workforce – incurring a major capital outlay – when you can lease as an operating expense instead? However, recent media coverage about lease accounting changes has created confusion, particularly around IFRS 16, with some reports insisting that any leased item can no longer be expensed. This is inaccurate. IFRS 16 applies to listed and large UK firms that report under international standards, while FRS 102 is more relevant to UK SMEs and private entities. However, IFRS 16 principles have indirectly shaped the 2026 amendments to FRS 102.1,3 Companies using either accounting rules have similar leeway when it comes to leasing certain items, which we will explore further in this paper. A drive for more transparent reporting As the accounting landscape evolves to bring greater transparency and consistency to financial reporting, lease expense reporting is now subject to greater scrutiny. Historically, many leases were recorded as operating expenses, meaning they did not appear as balance-sheet liabilities. This reduced reported debt – a quirk of the rules that some Overview Leasing has long been a practical way for businesses to manage technology costs. It provides access to new technology whenever needed and often comes with a suite of additional services, such as tech support, security and device management. One of the biggest attractions of using Devices as a Service (DaaS) is that it does not usually require a business to incur large CapEx costs when kitting out a team. However, for accounting periods beginning on or after 1 January 2026, new accounting rules about leasing under IFRS 16 and FRS 102 will need to be considered.1 Confusion reigns. Much has been made in the media about how new rules will force all leasing contracts to be recorded on the balance sheet. But this isn’t actually the case. This paper explains why, in most instances, computer leasing will continue to be accounted for as an expense due to the “low-value asset” exemption, rather than requiring capitalisation on the balance sheet under the new lease accounting rules.2,2a In short, it provides UK firms with the confidence they need to continue leasing computers as an operating expense in most cases, and sets out to provide reassurance in the face of misinformation about how new rules affect leasing. Introduction The global financial crisis, business rates, National Insurance contributions and Trump’s tariffs have left many UK firms feeling understandably spooked. The pressures many are facing explain why flexible tech subscriptions have become so popular. It’s an easy concept to buy into. Why purchase a suite of computers IFRS 16 and FRS 102 changes affect IT financing – but laptops remain a straightforward expense. Demystifying computer leasing for UK businesses LEASING
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