The proposed rules, which come three months after the first LLPs were permitted, will replace a number of treatments commonly used by unlimited partnerships.
These include the valuation of former partners’ pensions, which will be placed as a liability on the LLP’s balance sheet.
Graham Ward, president of the ICAEW and chairman of the project committee, said it was essential the statement of recommended practice ‘establishes accounting rules that will ensure accountability and comparability’.
The proposals also recommend contracted work that is uncompleted at the year-end will have to be valued on the balance sheet to include ‘the prudently calculated attributable profit’.
The proposals were developed by the CCAB, an umbrella organisation of the six main UK and Irish accounting bodies, under a remit from the Accounting Standards Board.
Nigel Llewellyn, technical chairman of the working party, said: ‘LLPs have some unique characteristics that make them very different from companies. This means that we have had to address a number of thorny fundamental accounting questions.’
The proposals can be seen in full at:
ICAEW: Tech 11/01 Accounting by Limited Liability Partnerships
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