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TECHNICAL ADVISORY SERVICES HELPSHEET

Allocation of losses in LLPs

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Published: 01 Jan 2019 Reviewed: 21 Jan 2020 Update History

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Treatment of losses within the accounts of a limited liability partnership.

Introduction

This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members to understand whether losses need to be allocated to members within an LLP’s accounts.

Allocation of losses

Whether or not losses are allocated out to the members of an LLP will depend on the membership agreement, which must be read carefully.

The majority of LLP membership agreements will not make any specific provision in relation to the allocation of losses. In such cases, the loss should be allocated to ‘Other reserves’ forming part of ‘Members’ other interests’ on the balance sheet.

If, however, the membership agreement does make a specific provision with regard to the allocation of losses, it must be followed.

If in doubt seek advice

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.

Terms and conditions

© ICAEW 2024  All rights reserved.

ICAEW cannot accept responsibility for any person acting or refraining to act as a result of any material contained in this helpsheet. This helpsheet is designed to alert members to an important issue of general application. It is not intended to be a definitive statement covering all aspects but is a brief comment on a specific point.

ICAEW members have permission to use and reproduce this helpsheet on the following conditions:

  • This permission is strictly limited to ICAEW members only who are using the helpsheet for guidance only.
  • The helpsheet is to be reproduced for personal, non-commercial use only and is not for re-distribution.

For further details members are invited to telephone the Technical Advisory Service T +44 (0)1908 248250. The Technical Advisory Service comprises the technical enquiries, ethics advice, anti-money laundering and fraud helplines. For further details visit icaew.com/tas.
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  • Update History
    01 Jan 2019 (12: 00 AM GMT)
    First published
    21 Mar 2024 (12: 00 AM GMT)
    Changelog created. Converted to new template. Links updated. Helpsheet has not had a full review