Proposed amendments to the LLPs SORP – still time to provide comments

With just under a month to go to submit comments on the proposed amendments to the LLPs SORP, this blog provides a quick summary of what CCAB is proposing to change and why.

Why is change needed?

In December 2017, the FRC issued amendments to FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland as a result of the 2017 Triennial review. CCAB has, therefore, considered whether the 2017 Triennial Review amendments create any issues specific to LLPs which would require amendments to the LLPs SORP.

What are the key proposed changes?

As a result of this review CCAB concluded that some limited, though important, changes to the LLPs SORP are required. These include updates 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.

Other minor clarifications have also been proposed to the LLPs SORP where required to maintain consistency with the revised FRS 102.

It is proposed that the updated SORP will be effective for periods commencing on or after 1 January 2019. Early adoption is permitted, provided all amendments are adopted from the same date, with some limited exceptions to this rule.

Comments on the proposed changes are due by 17 October although every effort will be made to consider any comments received later than the deadline.