CCAB has published a revised statement of recommended practice (SORP) for limited liability partnerships (LLPs).
The LLPs SORP has been updated to reflect the new LLP Regulations that were issued in May 2016 and recent changes to UK accounting standards.
The LLP regulations were amended in May 2016 by The Limited Liability Partnerships, Partnerships and Groups (Accounts and Audit) Regulations 2016 (SI 2016/575), which introduce similar changes to the financial reporting framework for LLPs as have been recently introduced for companies.
These include raising the size thresholds which determine when an LLP or group qualifies as small (SI 2008 1912 part 2 382 as amended by SI 2016/575) and the creation of a new micro-entities regime for very small LLPs. (SI 2008 1912 part 2 384A as introduced by SI 2016/575). The changes are effective for financial years beginning on or after 1 January 2016.
While these changes do not fundamentally alter the financial reporting regime for LLPs, they allow LLPs, particularly small LLPs, to benefit from a less burdensome financial reporting regime and ensure that the legislative requirements for LLPs are aligned with those applicable to limited companies.
Several minor clarifications have been made to the SORP, including amending the existing guidance to address diversity in practice on how ‘automatic divisions’ of profits are accounted for. Although the wording has been clarified, no changes to existing requirements are intended. The updated SORP is effective for periods commencing on or after 1 January 2016.
Note – early adoption is allowed.
For further information please contact Lesley Malkin
