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Comments invited on updated draft SORP for Limited Liability Partnerships

  • UKGAAP Image

02 Aug 2018

The Consultative Committee of Accountancy Bodies (CCAB) has published an Exposure Draft on an updated Statement of Recommended Practice (SORP) which sets out a framework for accounting by Limited Liability Partnerships (LLPs) (“LLP SORP”). Comments are invited until 17 October 2018.

The Financial Reporting Council (FRC) has approved the CCAB bodies for the purpose of issuing a recognised SORP for Limited Liability Partnerships incorporated in Great Britain under the Limited Liability Partnerships Act 2000. The members of CCAB are; The Institute of Chartered Accountants in England and Wales (ICAEW), The Institute of Chartered Accountants of Scotland (ICAS), The Institute of Chartered Accountants in Ireland (ICAI), The Association of Chartered Certified Accountants (ACCA) and The Chartered Institute of Public Finance and Accountancy (CIPFA).

SORPS issued by CCAB apply to LLPs preparing accounts under UK GAAP to present a ‘true and fair view’. CCAB has stated that “the underlying purpose of the SORP is to deal with issues that are specific to LLPs and ensure that, as far as possible, LLPs present financial statements that are comparable with those of other entities”.

The Exposure Draft proposes updates to the LLP SORP which are required as a result of amendments to FRS 102 resulting from the first Triennial Review of the Standard in December 2017.

Updates are proposed to:

  • the guidance on cash flow statement presentation to reflect the new requirement to disclose the changes in net debt between the beginning and end of the financial period;
  • the guidance on accounting by small LLPs to reflect the simpler recognition and measurement requirements available to small entities when accounting for certain loans;
  • provide additional guidance on the revised recognition rules for intangibles assets acquired in a business combination; and,
  • the guidance on merger accounting to reflect the extended definition of a group reconstruction.

In addition other minor clarifications have been made to ensure consistency with FRS 102.

The final SORP will be effective for accounting periods beginning on or after 1 January 2019 with earlier adoption permitted subject to certain exceptions.

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