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.
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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