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We comment on the BIS consultation on deregulatory changes for LLPs and qualifying partnerships as a result of the UK implementation of the EU Accounting Directive

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04 Jan 2016

We have published our comment letter on the Department for Business, Innovation and Skills (BIS) consultation on deregulatory changes for LLPs and qualifying partnerships as a result of the UK implementation of the EU Accounting Directive.

The European Union published the EU Accounting Directive 2013/34/EU (‘the Directive’) on 26 June 2013. The Directive aimed to simplify the accounting requirements for small companies and improves the clarity and comparability of companies' financial statements within the Union.

Following a consultation by BIS in August 2014 and government response in January 2015regulations were made (the Companies, Partnerships and Groups (Accounts and Reports) Regulations 2015) which implemented the EU Accounting Directive for limited companies.  Changes were also made by the Financial Reporting Council (FRC) to UK accounting standards in July 2015 to implement those changes.  At that time, the Government indicated that it would be consulting separately for LLPs and qualifying partnerships.

The LLPs and qualifying partnerships consultation proposes to introduce similar changes to the regulatory framework for LLPs. 

Overall we support the proposals.  Our key comments are:

  • we believe that maintaining reporting alignment between companies and LLPs is generally efficient and cost effective in the long term and therefore support the proposals;
  • we strongly believe that the regulation alignment should be implemented as soon as possible to allow early adoption of the updated regulations so as to reduce or eliminate any timing difference in application between companies and LLPs; and
  • areas of accounting that have pre-existing differences that are currently in place to reflect the differing characteristics of LLPs compared to companies (such as merger accounting criteria) should not be updated to reflect the changes adopted in the company regulations.

Further comments and full responses to the questions raised in the consultation paper are contained within the full comment letter.

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