Hi, We are preparing a set of accounts for a Limited company under FRS102 (1a). The company rents property to third parties, during the year one third party terminated their lease and an agreement was entered into whereby the tenant would pay the company £50k over 4 years, with no interest. If I am correct under FRS102 (1a) we are required to calculate an inherent interest charge and account for this at the start. Therefore if we assumed that the inherent interest charge was say £5k, presumably on day 1 we would need to recognise the termination receipt in P&L at £45k, and filter the £5k difference as interest through over the repayment term. Any confirmation would be much appreciated.