CCAB


		The Consultative Committee of Accountancy Bodies

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Press Releases

Embargoed until: 12.00 hours Wednesday 29th May 2002

CCAB ISSUES STATEMENT OF RECOMMENDED PRACTICE FOR LIMITED LIABILITY PARTNERSHIPS

The Consultative Committee of Accountancy Bodies has today (Wednesday published its Statement of Recommended Practice (SORP) on accounting by Limited Liability Partnerships (LLPs). The SORP applies UK generally accepted accounting practice (GAAP) to LLPs incorporated in Great Britain.

The underlying purpose of the SORP is to ensure that, as far as possible, LLPs present financial statements that are comparable with those of limited companies. This will have the effect of imposing a number of new accounting treatments in place of those commonly adopted by unlimited partnerships. For example, retirement benefits payable to former members, often referred to as 'annuities', will have to be valued and treated as a liability on the LLP's balance sheet from the date of retirement.

The Statement of Recommended Practice has been developed by the CCAB as a SORP-making body recognised by the Accounting Standards Board. The process has been overseen by a Steering Committee, the membership of which was drawn from trades and professions with member firms expected to seek LLP status, including the accountancy and legal professions and the construction industry.

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Graham Ward, Chairman of the Steering Committee, said: "Limited liability partnerships are already proving to be a popular corporate vehicle for UK businesses. They offer limited liability for the members but with tax transparency - so that members will not be taxed as employees. These features are likely to make them the vehicle of choice for many small and medium sized enterprises (SMEs). The SORP establishes accounting practices that will ensure accountability and comparability."

CCAB ISSUES STATEMENT

Nigel Llewellyn, Chairman of the Working Party that dealt with the detailed technical issues in the SORP said: "The SORP has had a long gestation period while we dealt with a number of very complex accounting and legal issues. Although LLPs have a few unique features that make them very different from companies, we believe that we have achieved our fundamental aim of creating workable recommendations that bring LLPs within the ambit of GAAP."

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Notes to editors

1.	Graham Ward is Chairman of the Sustainability Advisory Group of the Institute of Chartered Accountants in England and Wales, Chairman of The British Energy Association and Senior Partner, Global Energy & Utilities Group, PricewaterhouseCoopers.
2.	A copy of the SORP Accounting by limited liability partnerships is available online at http://www.ccab.org.uk/
3.	Limited Liability Partnerships (LLPs) were established in Great Britain by the Limited Liability Partnerships Act 2000. Registration as an LLP has been available from 6 April 2001. The detailed accounting requirements relating to LLPs are set out in the Limited Liability Partnerships Regulations 2001 (SI 2001/1090). The Regulations apply, with appropriate modifications, the accounts and audit provisions of the Companies Act 1985 to LLPs. The SORP does not specifically apply to overseas LLPs that trade in this country or to unincorporated partnerships.
4.	The Preface to the SORP lists the members of the Consultative Committee of Accountancy Bodies, the SORP Steering Committee and the SORP Working Party.
5.	The Institute of Chartered Accountants in England & Wales is the largest Accountancy body in Europe, with more than 122,000 members. Three thousand new members qualify each year. The prestigious qualifications offered by the Institute are recognised around the world and allow members to call themselves Chartered Accountants and to use the designatory letters ACA or FCA.
6.	The Institute operates under a Royal Charter, working in the public interest. Its primary objectives are to educate and train Chartered Accountants, to maintain high standards for professional conduct among members, to provide services to its members and students, and to advance the theory and practice of accountancy.

Press enquiries

Fazila Raniwala, ICAEW Press Office	020 7920 8616
Nadia Manuelli, ICAEW Press Office	020 7920 8607
Graham Ward, Chairman, SORP Steering Committee	020 7804 3101
Nigel Llewellyn, Chairman, SORP Working Party	020 7303 3056
Desmond Wright, CCAB	020 7920 8527