NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
2.Accounting policies (continued)
|
|
Members participation rights
|
Members' participation rights are the right of a member against the LLP that arise under the member's agreement (for example, in respect of amounts subscribed or otherwise contributed, remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with FRS 102 (Section 1A). A member's participation right results in a liability unless the right to any payment is discretionary on the part of the LLP.
Amounts subscribed or otherwise contributed by members, for example members' capital, are classed as equity if the LLP has an unconditional right to refuse payment to members. If the LLP does not have such an unconditional right, such amounts are classified as liabilities.
Where profits are automatically divided as they arise, so the LLP does not have an unconditional right to refuse payment, the amounts arising that are due to members are in the nature of liabilities. They are therefore treated as an expense in the Income Statement in the relevant year. To the extent that they remain unpaid at the year end, they are shown as liabilities in the Balance Sheet.
Conversely, where profits are divided after a decision by the LLP or its representative, so that the LLP has an unconditional right to refuse payment, such profits are classed as an appropriation of equity rather than as an expense. They are therefore shown as a residual amount available for discretionary division among members in the Income Statement and are equity appropriations in the Balance Sheet.
Other amounts applied to members, for example remuneration paid under an employment contract and interest on capital balances, are treated in the same was as all other divisions of profits, as described above, according to whether the LLP has, in each case, an unconditional right to refuse payment.
All amounts due to members that are classified as liabilities are presented in the balance sheet within 'Loans and other debts due to members' and are charges to the Income Statement within 'Members' remuneration charged as an expense'. Amounts due to members that are classified as equity are shown in the Balance Sheet within 'Members' other interests'.
|
The average monthly number of employees, including members, during the year was 5 (2022 - 5).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepayments and accrued income
|
|
|
|
|
|
|
|
|
|
|
|