ICAI issues Exposure Draft on Accounting Standards for Limited Liability Partnerships:

ICAI issues Exposure Draft on Accounting Standards for Limited Liability Partnerships The Institute of Chartered Accountants of India (ICAI) has issued an Exposure Draft on Accounting Standards for Limited Liability Partnerships. In India, there are three sets of Accounting Standards in place, i.e., Companies (Accounting Standards) Rules, 2021, and Companies (Indian Accounting Standards) Rules 2015 prescribed by Central Government for companies and Accounting Standards issued by ICAI for entities other than companies. Presently, Accounting Standards issued by the ICAI and criteria prescribed by the ICAI for applicability of Accounting Standards to non-company entities are applicable to LLPs for the preparation and presentation of their financial statements. The AS issued by the ICAI are almost aligned with the Accounting Standards notified under AS Rules 2021 with very few differences. Section 34A of the Limited Liability Partnership Act, 2008, prescribes that the Central Government may, in consultation with the National Financial Reporting Authority constituted under section 132 of the Companies Act, 2013, prescribe the standards of accounting as recommended by the Institute of Chartered Accountants of India constituted under section 3 of the Chartered Accountants Act, 1949, for a class or classes of limited liability partnerships. Accounting Standards notified under the Companies (Accounting Standards) Rules, 2021 shall be applicable to the Limited Liability Partnerships (LLPs) with exemptions/relaxations as mentioned in points II and VIII. Accounting Standards 1 to 5, 7, 9 to 19 and 21 to 29, as notified under Companies (Accounting Standards) Rules, 2021, shall be applicable to the LLPs. AS 20 Earning Per Share shall be exempted to the LLPs. A Limited Liability Partnership which is a subsidiary, joint venture or associate of another entity which is applying Ind AS notified under Companies (Indian Accounting Standards) Rules, 2015, is permitted to prepare its financial statements in accordance with Ind AS since such an LLP is already preparing financial statements under Ind AS for the purpose of consolidation. Except for such LLPs, all other LLPs shall apply Accounting Standards 1 to 5, 7, 9 to 19 and 21 to 29 notified under the Companies (Accounting Standards) Rules, 2021. The Exposure draft contains the proposals regarding Accounting Standards for LLPs. In this regard, comments are invited on the following aspects:

• Applicable Accounting Standards
• Basis of accounting: Applicability of Accounting Standards to LLPs following cash basis of accounting
• Classification of LLPs and Exemptions: Criteria for classification of LLPs for applicability of Accounting Standards and exemptions/relaxations available to LLPs
• Transitional provisions required, if any
• Any other matter(s)

Comments are most helpful if they contain a clear rationale and, where applicable, provide suggestion(s).

How to Comment

Comments should be submitted using one of the following methods, so as to receive not later than November 27, 2023: 1. Electronically: Click on the below-mentioned option to submit a comment letter or visit at the following link (Preferred method): http://www.icai.org/comments/asb/ 2. Email: Comments can be sent at [email protected] 3. Postal: Secretary, Accounting Standards Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi – 110 002 To Read More - Click Here