Businesses still in the dark over impact of new financial reporting rules – survey finds
New financial reporting standards could have significant commercial implications, with more than a third of businesses admitting they’re still in the dark about what the changes could mean.
According to the latest Economic Engine survey from accountancy and business advisory firm BDO, 38% of mid-sized UK businesses say they will be hit by changes to the Financial Reporting Standard (FRS) 102, but have yet to assess what impact the new rules will have when they come into force.
The survey of over 500 business leaders shows that 94% of respondents will be affected by the amendments to FRS 102 – a single financial reporting standard that applies to the financial statements of the majority of UK entities, including companies, public benefit and other entities.
The amendments to FRS 102 will take UK companies applying the standard closer to International Financial Reporting Standards (IFRS) in areas such as revenue accounting and leases.
Alex Stansbury, audit partner at BDO, said: “A significant number of UK entities will be affected by the changes to FRS 102, with many unaware of the commercial and operational implications these changes will bring.
“While the changes may seem a long way off, with the new rules starting to apply to accounting periods beginning on or after 1 January 2026, it’s essential that businesses and all entities affected by the changes are fully prepared. FRS 102 goes beyond financial statements. It will impact all aspects of how a business or other entity is run, whether this relates to performance metrics, debt covenants, business operations, systems and processes, data or internal controls. The impact is far-reaching.”
According to BDO’s Economic Engine survey, more than a fifth (21%) of businesses say navigating regulation and compliance is a top challenge when it comes to operational resilience.
Stansbury added: “Regulation and compliance can often impede growth when it’s not tackled head on and in a timely and considered fashion. There is still a window of opportunity to prepare for the amendments to FRS 102. As such, businesses and other entities need to be carrying out impact assessments, arming their team with the right skills and knowledge, while having the correct policies and procedures in place to ensure they are best placed when the changes come into force.”