Understanding the 2026 LLP SORP: Key changes and their impact on your business
Understanding the 2026 LLP SORP: Key changes and their impact on your business
The 2026 LLP SORP is effective for accounting periods beginning on or after 1 January 2026, with early adoption permitted. LLPs may elect to adopt the revised requirements early, provided all SORP changes are applied together, and the LLP also early adopts the associated FRS 102 amendments. However, the increased size thresholds introduced by the Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303), although referenced in the 2026 LLP SORP, cannot be early adopted.
While the increased monetary thresholds used to determine LLP size introduced by SI 2024/1303 will reduce reporting burdens for many LLPs, they do not extend to the Streamlined Energy and Carbon Reporting (SECR) regime which continues to apply its existing size criteria.
What’s new in the 2026 LLP SORP?
The primary driver for this revision was the FRC's 2024 Periodic Review which delivered significant changes to FRS 102, bringing UK GAAP into closer alignment with IFRS. The areas of most significant change, which will be relevant to some LLPs are lease accounting, through the recognition of right-of-use assets, and the application of a five-step revenue model which focuses on transfer of control. The FRC’s Periodic Review also brought updates to the conceptual framework, uncertain tax positions, and disclosure of supplier finance arrangements, all of which are reflected in the revised SORP.
A key theme of the 2026 LLP SORP revision is the move from "encouraged" to mandatory disclosures, particularly for small LLPs. To support small LLP’s financial statements in giving a true and fair view, the 2026 LLP SORP introduces new mandatory disclosures covering members’ remuneration arrangements as well as changes in loans and other debts due to members, alongside other UK GAAP-mandated disclosures. The introduction of these new disclosure and reporting requirements reinforces the importance of early preparation to ensure LLPs can effectively meet the expanded reporting obligations.
The revised SORP also introduces greater consistency in consolidated accounts by addressing long standing divergence in the presentation of members’ remuneration across group LLPs, following feedback from the 2024 CCAB consultation. Under the new rules, the "members remuneration" line item in the consolidated income statement must now only reflect amounts payable to members of the parent LLP, including amounts payable by subsidiary LLPs to their members where that member is also a member of the parent LLP. Remuneration payable by the subsidiary LLP to its members who are not also members of the parent LLP must be excluded and instead included in the appropriate income statement line-item category depending on the nature of the underlying expense. Similarly, balance sheet amounts due to/from members of a subsidiary LLP must not be included within consolidated members’ interests balances unless they are also members of the parent LLP.
Other updates introduce a more logically structured section on post-retirement benefits and the SORP has been updated to improve clarity and ease of application. In particular, the shift from “should” to “shall” removes ambiguity between 'best practice' and 'mandatory’ requirements. Although these changes do not alter what is required in substance, reviewing existing policies and disclosures against the revised text is recommended.
From interpretation to implementation: Your action plan
With the 2026 LLP SORP now effective, the focus for LLPs must shift from understanding to implementation. This transition begins with a structured gap analysis to identify where the new requirements diverge from existing accounting policies and current financial statement disclosures.
Achieving a successful first reporting cycle will require proactive preparation rather than reactive measures. As LLPs embed the amended FRS 102 requirements into their systems and processes, it is equally important to consider the associated LLP SORP amendments that affect the same financial reporting areas. Addressing both in tandem from an early stage will ensure an effective transition and the introduction of robust, effective reporting processes.
For further information on the FRS 102 amendments, our earlier publications provide a suite of guidance on these, available here.
For help and further discussion on this topic, feel free to get in touch with Mark Cardiff or your usual BDO contact.