Go-ahead for LLPs.

The Accounting Standards Board has given the profession’s umbrella body its approval to go ahead with plans to develop a new statement of recommended practice on accounting for limited liability partnerships. With the Limited Liability Partnerships Bill currently going through parliament, the first LLPs are expected to be formed early next year. The Consultative Committee of Accountancy Bodies – comprising the English, Scots and Irish ICAs, CIMA, ACCA and CIPFA – will now go ahead and develop the new statement. Accountancy firms are expected to be among the most significant groups to use the new business vehicle. But as LLPs will not be restricted to accountants or other professional groups, the CCAB’s application to the ASB for recognition was made on the basis that it would involve the other main groups likely to adopt LLP status. Development of the statement of recommended practice will be overseen by a steering group which will include accountants, lawyers and the construction industry. Steering group chairman Graham Ward said: ‘LLPs have the potential to become the vehicle of choice for substantial sectors of the economy. It is vitally important that we have accounting rules in place that will ensure accountability and comparability.’ Nigel Llewellyn, chairman of the working party that will address the detailed technical issues, said: ‘Financial reporting standards in the UK have evolved primarily to deal with limited companies. LLPs have some unique features that make them very different from companies. ‘We need to ensure that in applying UK generally accepted accounting principles we are properly catering for the special characteristics of LLPs.’