LLP Accounting Rules 2026: New SORP Requirements for Limited Liability Partnerships

Updated LLP SORP Takes Effect January 2026

The Consultative Committee of Accountancy Bodies (CCAB) has published the revised Statement of Recommended Practice – Accounting by Limited Liability Partnerships (LLP SORP), introducing important changes to UK accounting and reporting requirements for LLPs.

The updated LLP SORP applies to accounting periods beginning on or after 1 January 2026, though LLPs can adopt the new rules early if they choose.

What Are the Key Changes to LLP Accounting Rules?

Major Updates in the 2026 LLP SORP

The revised SORP introduces significant changes across three main areas:

Disclosure requirements for small LLPs: Enhanced mandatory disclosures following Brexit, as EU restrictions on small entity reporting have been removed.

Presentation of members’ remuneration: New requirements for how LLPs present members’ remuneration in both parent and consolidated accounts.

Post-retirement payments guidance: Reorganized section providing clearer guidance on accounting for post-retirement payments to LLP members.

Additionally, CCAB has made minor amendments throughout the SORP to improve clarity and ensure terminology aligns with FRS 102, the applicable UK accounting standard.

LLP Disclosure Requirements: What Small LLPs Must Know

Mandatory Disclosures After Brexit

One of the most significant changes to LLP accounting rules concerns disclosure requirements for small LLPs. Since the UK’s departure from the EU, the EU Accounting Directive no longer applies, removing previous restrictions on disclosure requirements for small entities.

As a result, the 2026 LLP SORP now requires small LLPs to provide additional disclosures where necessary for financial statements to give a true and fair view. Previously, these disclosures were merely encouraged rather than mandated.

Updated Size Thresholds for LLPs

The revised SORP reflects the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303), which increased monetary size thresholds for:

• Micro-entities
• Small entities
• Medium-sized entities

LLPs should review whether they still qualify under their previous size classification or have moved into a different category under the new thresholds.

LLP Members’ Remuneration: New Presentation Rules

Parent LLP Consolidated Accounts

Following consultation feedback, the final LLP SORP introduces specific requirements for presenting members’ remuneration in consolidated accounts.

Parent LLPs must now include only amounts payable to members of the parent LLP within the ‘members’ remuneration charged as an expense’ line item in consolidated accounts.

Subsidiary LLP Members’ Remuneration

When subsidiary LLPs charge members’ remuneration as an expense in their own financial statements, these amounts must be included within the appropriate profit and loss line-item in the parent’s consolidated accounts, based on the nature of the underlying cost.

Exception: If the subsidiary LLP member is also a member of the parent LLP, different treatment applies.

The SORP introduces additional disclosure requirements to explain how subsidiary LLP members’ remuneration is presented in consolidated accounts, improving transparency for financial statement users.

Post-Retirement Payments to LLP Members

The section covering post-retirement payments to members has been reorganized in the 2026 SORP to improve clarity and readability. However, CCAB has confirmed that no substantive changes have been made to the underlying reporting requirements or guidance.

LLPs should review this section to ensure they understand the presentation requirements, even if their accounting treatment remains unchanged.

FRS 102 Alignment and Terminology Updates

The revised LLP SORP includes terminology updates to ensure consistency with FRS 102, the financial reporting standard applied alongside the SORP.

These changes improve clarity and ensure that LLP accounting guidance uses the same language and concepts as the broader UK GAAP framework.

Additional UK GAAP Changes Affecting LLPs in 2026

LLPs should be aware that significant changes to UK Generally Accepted Accounting Practice (UK GAAP) also take effect for accounting periods beginning in January 2026:

Lease accounting changes: New requirements for recognizing and measuring leases under FRS 102.

Revenue recognition updates: Revised guidance on when and how to recognize revenue from contracts with customers.

These changes apply across all entities reporting under FRS 102, including LLPs, and should be considered alongside the updated LLP SORP requirements.

Development of the Revised LLP SORP

Consultation Process

CCAB confirmed that responses to its consultation on the draft SORP have been incorporated into the final version. The consultation process allowed LLP practitioners, auditors, and other stakeholders to provide feedback on proposed changes.

Regulatory Updates Reflected

The revised SORP incorporates:

• Wording changes arising from amendments to FRS 102
• The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024
• Feedback from the consultation process

Which LLPs Must Follow the LLP SORP?

Scope and Application

The LLP SORP is intended to be applied in conjunction with:

• The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations
• FRS 102 (Financial Reporting Standard applicable in the UK and Republic of Ireland)

The SORP is not designed to be applied on a standalone basis.

LLPs Excluded from the SORP

The LLP SORP does not apply to LLPs reporting under:

• IFRS (International Financial Reporting Standards)
• FRS 101 (Reduced Disclosure Framework)
• FRS 105 (Financial Reporting Standard for Micro-entities)

LLPs using these alternative reporting frameworks should follow the disclosure requirements specific to their chosen standard.

Implementation Timeline for LLP Accounting Changes

Effective Date

The revised LLP SORP applies to accounting periods beginning on or after 1 January 2026.

Early Adoption

LLPs may choose to adopt the updated SORP early for accounting periods beginning before 1 January 2026, though this is not required.

Preparing for Implementation

LLPs should:

1. Review the revised SORP to identify applicable changes
2. Assess whether size threshold changes affect their classification
3. Update accounting policies and disclosure templates
4. Consider early adoption if beneficial
5. Ensure concurrent compliance with FRS 102 updates for leases and revenue

Key Takeaways: LLP SORP 2026

Mandatory disclosures: Small LLPs now face mandatory (not optional) disclosure requirements where needed for a true and fair view.

Members’ remuneration: New presentation rules distinguish between parent LLP and subsidiary LLP members in consolidated accounts.

Size thresholds: Updated monetary limits may change how your LLP is classified (micro, small, or medium-sized).

FRS 102 alignment: Terminology and concepts updated to match the broader UK accounting framework.

Effective date: Applies from 1 January 2026, with early adoption permitted.

Additional changes: Remember that separate UK GAAP changes for leases and revenue also take effect in January 2026.

Frequently Asked Questions About LLP Accounting Changes

When do the new LLP accounting rules take effect? The revised LLP SORP applies to accounting periods beginning on or after 1 January 2026, though early adoption is permitted.

Do these changes apply to my LLP? The LLP SORP applies to LLPs reporting under FRS 102. It does not apply to LLPs using IFRS, FRS 101, or FRS 105.

What are the main changes for small LLPs? Small LLPs now face mandatory additional disclosure requirements (previously optional) where needed for financial statements to give a true and fair view.

How has members’ remuneration presentation changed? Parent LLPs must now separate members’ remuneration for parent LLP members from subsidiary LLP members’ remuneration in consolidated accounts, with specific line-item requirements.

Can we adopt the new SORP early? Yes, LLPs may adopt the revised SORP for accounting periods beginning before 1 January 2026.

What other accounting changes affect LLPs in 2026? Significant changes to lease accounting and revenue recognition under FRS 102 also take effect for periods beginning in January 2026.

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This article covers the 2026 LLP SORP updates published by CCAB. LLPs should consult the full SORP document and seek professional advice for specific implementation guidance.