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LLP Negative Equity

LLP Balance Sheet Equity is negative, how to present SOFP

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I have a two partner LLP which has traded for two years, the first year profitable, however the second year resulted in a loss (Covid-19).

 

in addition, the LLP utilised the BBL which was used to support the partners living expenses, resulting in the overall partners capital account being overdrawn.

 

When producing the financial statements, debtors is circa £10k (amounts owed by partners) and the overall net assets attributable to partners £nil, equity being (£10k), effectively the balance sheet appears unbalanced, effectively total assets less liabilities differentiates from the corresponding equity balance!

 

This is the first time I have faced this presentational issue, and am looking for a little guidance.

 

Any help is greatly appreciated!

Many thanks

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paddle steamer
By DJKL
22nd Dec 2021 09:33

Not sure how you get to that position, I presume your TB balances?

For instance we have an LLP with stonking net liabilities of £977,188 (no debtors from members though) which is merely balanced by :

Member's Capital £200
Other reserves (£977,388)

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By HandC
22nd Dec 2021 09:50

Yes the TB balances.

Bf amounts due to members £60k
Current Year Profits £15k
Withdrawn £86k

NCA £18k
Amounts due from partners £11k
Cash £10k

Current liabilities £5k
NCL £34k

Total members interest (£11k)

Its the negative members interest that's put a spanner in the works, as I would expect this to be £nil as there Net assets are £nil, as the amounts due from members highlights the negative members interest!

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paddle steamer
By DJKL
22nd Dec 2021 10:18

D0 remember the Total Members' Interests is not the other side of the balance sheet, that is the Equity section, the TMI is more a supplemental notes that extracts from the accounts all the account balances connected with the members.

See this set for Deloittes

https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/about-deloit...

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Replying to DJKL:
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By carnmores
22nd Dec 2021 12:18

agreed its supplemental , the new sorp for LLPs starting for periods begining after Jan1 2022 should make this easier but im not so sure

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