FRS 102 Updates: What Irish Businesses Need to Know About the New Revenue Rules

The latest updates to FRS 102, effective for accounting periods beginning on or after 1 January 2026 (with early adoption possible), introduce significant changes to revenue recognition.
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Revenue Recognition (Section 23)

FRS 102 now adopts a five-step revenue recognition model, based on IFRS 15 but simplified for domestic entities:

1. Identify the contract with the customer
2. Identify performance obligations in the contract
3. Determine the transaction price
4. Allocate the price to performance obligations
5. Recognise revenue as performance obligations are satisfied

Revenue is now recognised when control of goods or services passes to the customer - no longer when risks and rewards transfer.

This brings more clarity to contracts with multiple performance obligations, long-term projects, or complex customer agreements.
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Transition Approaches

Businesses can choose between two methods:
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Option 1: Full Retrospective Application

• Restate prior year figures using the new model
• Adjust comparative financials for consistency
• More comprehensive but data-intensive

Option 2: Modified Retrospective Application

• Adjust opening reserves in current reporting period
• Show cumulative impact via deferred income or retained earnings
• Prior year comparatives remain unchanged
• Less complex, suitable for limited data

Entities should evaluate system readiness, historical data availability, and stakeholder needs before selecting a transition approach. Clear disclosure of the method chosen and its impact will be required in financial statements.

Note: FRS 105 companies (micro entities) must apply changes prospectively, with no choice of retrospective application.
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Disclosure Enhancements

Updated disclosures must include:

• Revenue streams
• Contract balances
• Timing of revenue recognition
• Significant judgments and estimates
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Action Points for Businesses

• Review contracts to identify performance obligations and pricing
• Update systems for the new revenue model
• Train teams on framework and disclosures
• Consider early adoption where feasible

In summary:

Irish businesses reporting under FRS 102 face a more robust, five-step model for recognising revenue. While this increases transparency, it may also add complexity—especially for companies with multi-element or long-term arrangements.

If your organisation uses long-term contracts, offers bundled services, or operates across multiple revenue streams, now is the time to assess your reporting strategy.

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The CSG team is here to help you navigate the transition with clarity and confidence - feel free to get in touch with Róisín Mulvihill or Edel Broderick from our Audit & Assurance team to discuss how these updates might affect your business

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