Regulatory Compliance Association Reviews

Challenges and Current Trends in Hedge Fund Accounting

Practice Edge 02

Challenges and Current Trends in Hedge Fund Accounting

Date: June 17, 2014
General Session: 12 Noon to 1:30 PM
Location: Webcast (Free)

New accounting pronouncements affecting investment companies to be covered are the “Balance Sheet Offsetting”, the Liquidation Basis of Accounting” and “Investment Company Accounting”. We’ll also go through some common deficiency areas we have come across on financial statements preparation relating to disclosures on derivatives, condensed schedule of investments, the Level 3 significant unobservable inputs chart, financial highlights, etc.

The industry developments we will review are recent trends of investment managers launching liquid alternative mutual funds and other registered Fund products and some of the potential issues fund accountants could encounter with these fund structures.

We will discuss best practices surrounding valuation of various types of illiquid investments including structured finance products and private operating companies. Our discussion will also include a look at best practices for funds performing due diligence on third party valuation specialists.

Learning Objectives:

  • Apply the necessary financial statement disclosures required under the Balance Sheet Offsetting accounting update;
  • Recognize when the liquidation basis of accounting is applicable and the required financial statement presentation;
  • Differentiate between characteristics of a private fund, a closed-end fund and a mutual fund;
  • Associate the different valuation methods with the scenarios they are best suited for;
  • Be able to list out the required components of the level 3 significant unobservable inputs chart;
  • Be able to determine if an open-ended fund’s portfolio is in compliance with the requirements under the Investment Company Act of 1040, and;
  • Be able to apply the best practices for due diligence over third party valuation specialists.
  • Session Chairman:
    Walter Zebrowski, JD, CPA, Principal, Hedgemony Partners
    Chairman, Regulatory Compliance Association

    Guest Lecturers:
    Frank Attalla, CPA, Principal, Rothstein Kass
    Andrea Lillard, CPA, Senior Manager, Rothstein Kass
    Mark Wolf, CPA, Principal, Rothstein Kass
    Joe Tylicki, CPA, CFO, Stark Investments