LLP FRS 105 Master Pack User Guide
FRS 105 LLP Master Pack User Guide
Overview
This master pack for CCH Accounts Production caters for the generation of LLP Accounts applying FRS 105, relevant to LLP entities qualifying as “Micro Entities”.
Sample LLP FRS 105 accounts (PDF) for filing and also those for members are available here.
Background
FRS 105
FRS 105 “THE FINANCIAL REPORTING STANDARD APPLICABLE TO THE MICRO-ENTITIES REGIME” is a financial reporting standard for entities eligible to apply the Micro-entities Regime set out in UK Company Law as applied to Limited Liability Partnerships. It is in part based upon FRS 102, adapted significantly to satisfy the reduced legal requirements and simpler nature of micro-entities.
Some of the most significant differences between FRS 105 and FRS 102 are:
- Micro-entities are only required to prepare a balance sheet and profit and loss account, without the other primary statements required for larger entities.
- No assets can be measured at fair value or a revalued amount.
- All of the accounting policy choices set out in FRS 102 are removed.
- Micro-entities' accounts are only required to provide very limited disclosures and are presumed to give a true and fair view by doing so.
FRS 105 LLP and the LLP SORP
LLPs qualifying for and choosing to apply the micro-entities regime are not within the scope of the LLP SORP. Such LLPs should apply FRS 105 only.
Where a micro-LLP enters into a transaction that is not specifically addressed by FRS 105, it is required to refer to the concepts and principles set out in Section 2 Concepts and Pervasive Principles of that standard when determining its accounting policies.
Eligibility criteria
FRS 105 may be applied by LLPs that satisfy at least two of the following three requirements in relation to a financial year:
- Turnover: Not more than £632,000 (pro-rated appropriately where an LLP’s year is shorter or longer than a calendar year);
- Balance sheet total (ie gross assets): Not more than £316,000; and
- Average number of employees: Not more than 10.
An LLP must meet at least two of these limits in two consecutive years to qualify as a micro-entity and, once qualified, must exceed at least two of these limits for two consecutive years to cease to qualify.
The following types of LLPs are excluded from the micro-entity regime and therefore cannot apply FRS 105:
- Excluded from the small LLPs regime by virtue of section 384; or
- An investment undertaking; or
- A financial holding undertaking; or
- A credit institution; or
- An insurance undertaking; or
- A parent LLP which prepares group accounts; or
- A non-parent LLP included within consolidated group accounts
Effective date
FRS 105 is effective for periods beginning on or after 1 January 2016.
Creating an FRS 105 LLP accounting period
During the client creation process client in CCH Central
- When setting up an FRS 105 LLP Client, in the Create Client Wizard Main Details tab, the Contact Type is LLP.
- In the Accounts tab, the options to choose are under Type, select LLP and under Entity please select LLP (FRS 105).
Adding to a client which does not yet have any accounting periods
On the Accounts Production tab, click in the grid to create a new accounting period:
Type: select "LLP".
Entity: select "LLP (FRS 105)".
Set other fields as required and click 'OK'.
Double-click the accounting period row on the grid to load the accounts production screen.
Features of the FRS 105 LLP Master Pack
This FRS 105 LLP master pack is largely based on the standard FRS 105 limited company pack and the FRS 102 LLP pack, providing users with the same look and feel. The structure of the chart of accounts, statutory database and formats are similar. The FRS 102 LLP user guide should be referred to in conjunction with this specialist master pack guide.
Nominal ledger
The nominal ledger for FRS 105 is based on the 4 digit FRS 102 LLP chart of accounts.
Nominal ledger coding structure
The nominal ledger coding structure adopted in these formats has been designed to cater for the requirements of FRS 105.
The nominal chart has the following key identifiers:
- Code ranges that group similar items together
- Descriptions that enable the user to understand the posting
- Category information which identifies where a posting will end up in the financial statements
The nominal chart is searchable both by browsing through codes and by entering text, and displays the 3 identifiers above, in data entry and information screens. Therefore, the entry of information is normally straightforward.
Statutory database
The statutory database has been simplified for the FRS 105 LLP Master Pack:
General
- General information - Basic client and period information.
- Professional accounting body - For specifying the accounting body of the accountant (relevant to the accountants' report).
- Employees – Average number for disclosure and size calculation.
- Size and audit – The node is a guide to give an indication of the size of the data. This node is for information purposes only and will not affect any of the data settings or selections.
Client Preferences:
- Compliance terminology – This allows users to choose whether to adopt Companies Act or IFRS terminology.
- File P&L – This allows users to specify whether to file the Profit and Loss Account.
The profit and loss account for a micro entity is not required to be filed with the Registrar.
- File LLP information page – This allows users to specify whether to include the information page in the filing copy.
- File contents page – Include the contents page in the filing copy.
- File accountants' report – Include the accountants' report in the filing copy.
Accountants' report
As per FRS LLP 102 - see information in that user guide.
Balance sheet
- Prior period errors – This allows users to specify if prior period adjustments were made and if so it will trigger the message ‘as restated’ above the prior period figures. Note - FRS 105 does not require any further information.
- Amounts due to/from members - A grid to permit the user to gross up the net figure for amounts due, where there is both a to and from element.
- Limited Liability Partnership information - A paragraph setting out the name and registered office.
- Audit exemption - Standard statement of exemption from audit.
- Members’ responsibilities - Standard statement acknowledging responsibilities.
- Preparation - Statement of compliance with FRS 105.
- Filing copy omitting Profit and Loss account - Statement that the members have elected not to file one.
- Date of signing of balance sheet.
Notes to the financial statements
- Reporting period length - Optional disclosure of the period start date and/or length, where this is not adequately clear from the headings.
- Guarantees and other financial commitments.
- Average employees.
- Off-balance sheet arrangements.
- Other notes - Optional additional notes and headings.
Note: The notes to the accounts are required to be included at the foot of the balance sheet. The information required is minimal, as set out in paragraph 55 of Part 2 of Schedule 1 to the Small Limited Liability Partnerships (Accounts) Regulations 2008/1912 and in FRS 105.
Where the accounts contain an item of information additional to the micro entity minimum accounting items, regard must be had to any relevant accounting standard which relates to that item.
Signing dates
- Date of signing of Accountant’s Report.
- Date of signing of Balance Sheet.
Management schedules
- Asset headings and optional paragraphs.
Lead schedules
- Choice of draft vs adjusted mode.
- Choice of simple vs detailed mode.
- Section references and optional paragraphs.
Financial statements
"Accounts" vs "Financial statements"
The default description used in this pack is "financial statements" and this has been used in the formats. However, the wording can be changed throughout by changing the default for "aw3" in the system "Maintenance" menu, within "Word items".
Members' financial statements or filing copy
The ‘Full’ micro entity accounts for members can be filed with the Registrar. As with small companies, there is an option to exclude the Profit and Loss Account from the filed accounts. This may be referred to as the ‘filing copy’ and can be obtained in AP by selecting ‘Filing Copy’ within the Print Selection drop down on the Financial Statements screen:
Exception report
This will report missing entries (eg signing dates) or contradictory information (eg P&L depreciation not agreeing with balance sheet depreciation).
Profit and loss account
The profit and loss account required by FRS 105 follows a similar layout to the FRS 102 Profit and Loss format 2, but simplified by grouping amounts and omitting subtotals.
Balance sheet
The FRS 105 LLP master pack uses the ‘Format 1’ Balance Sheet presentation set out in FRS 105. The ‘net assets’ line is not technically included within the company law formats (as applied to LLPs), but has been inserted for clarity.
The accounts are required to be included at the foot of the Balance Sheet.
iXBRL Tagging
The mandatory iXBRL tags for submission to Companies House have been applied to the LLP FRS 105 financial statements.
Please note when using CCH Review & Tag a validation error may be displayed. Simple steps to resolving this are:
“Director signing financial statement has no related tag: NameEntityOfficer, in dimension PartnerLLP1”:
- Double- click the error message to open the Taxonomy panel
- The Tag Name of entity officer will be highlighted in the taxonomy and the main screen should show the signatory section of the balance sheet.
- Drag the Name of entity officer tag onto the name of the signatory on the face of the accounts. The Edit tag screen will appear.
- Tick the box next to Partner,LLP,1. Click OK and the error should disappear.
- Where there is more than one signatory repeat the steps and choose Partner,LLP,2. Tax Link This pack contains the link to share balances with CCH Personal Tax, via the Tax Link screen.
Tax link
This pack contains the link to share balances with CCH Tax, via the Tax Link screen.
Dormant accounts
Within the statutory database, the Dormant option can be selected on the General screen. Use the drop down list as shown below:
Selecting one of the dormant options here will automatically trigger the correct dormant disclosures.
Management collection
A detailed Profit and Loss format based on the micro entity layout is included in the management collection, together with details of the assets and liabilties figures shown on the balance sheet.
Questions
Does AP LLP FRS 105 include a Members' Report? AP has not provided a Members’ Report in Master pack 1 of LLP FRS 105 and there is currently no plan to provide one in future master packs. LLPs are neither required or encouraged to apply the SORP and there is no legislative requirement to produce a Members’ report. If you would like this to be included in future releases please visit User Voice and log a request.
Does AP LLP FRS 105 include a separate Members' responsibilities statement? AP has not provided a separate Members’ responsibilities statement format in Master pack 1 of LLP FRS 105 and there is currently no plan to provide one in future master packs. There is a members’ responsibilities statement at the foot of the balance sheet. If you would like this to be included in future releases please visit User Voice and log a request.
Does AP LLP FRS 105 include an audit report? There is no statutory requirement of the audit of LLPs applying FRS 105, and an audit report has not been included in Master pack 1 of LLP FRS 105 and there is currently no plan to provide one in future master packs. If you would like this to be included in future releases please visit User Voice and log a request.
Appendix A – Additional postings
Following transition to the new LLP FRS 105 Pack, some postings and re-work compared with previous packs will be required. There are two particular areas where the new master pack works differently:
- Allocation of profits
- Amounts due from members (members debt balances, included in debtors)
Allocation of profits
Under the new pack, all allocations of profits/losses are to be performed by journal.
Amounts due from members
The FRS 105 LLP Master Pack contains no nominal codes or sub-codes for individual member balances in this initial release. Where there are both debtor and creditor figures, the existing net balance will need to be adjusted. The total Amounts due from members, to be included in debtors must be taken from your working papers and calculated outside the software and manually input into field #lp19:
