PKF


Table 1: IFRS Currently in effect


International Accounting Standard 32 – Financial Instruments: Presentation


International Accounting Standard 39 – Financial Instruments: Recognition and Measurement


International Financial Reporting Standard 7 – Financial Instruments: Disclosures


Table 2: ASC Currently in effect


Topic 946 Financial Services – Investment Companies


Written but not yet effective Proposed


Proposed Accounting Standards Update 2011- 200 – Financial Services – Investment Companies (Topic 946). Amendments to the Scope, Measurement, and Disclosure Requirements Proposed Accounting Standards Update 2011- 210 – Real Estate – Investment Property Entities (Topic 973)


Topic 820 Fair Value Measurement


Accounting Standards Update No. 2011- 04 – Fair Value Measurement (Topic 820). Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRSs


Table 3: Current Standards Issue


Fair value of investments Consolidation IFRS


Bid prices for long positions and ask prices for short positions.


IAS 27 requires an entity to consolidate other entities over which it has control.


US GAAP


Last quoted sales price. Bid and ask prices used if a last quoted price is not available.


Topic 946 allows entities to show investments at fair value (consolidation is required only in certain situations).


Ownership interest


IAS 32 requires a financial instrument that gives the holder the right to put the instrument back to the issuer for cash or another financial asset (a ‘puttable instrument’) is a financial liability of the issuer, unless certain conditions are met.


Condensed schedule of investments


Realised and unrealised gains and losses


No specific requirement, however general disclosure requirements under IFRS 7.


IFRS does not require disaggregation of these balances.


Transactions with owners of the investment entity are generally accounted for as equity.


Comment


This difference may result in the net assets of an identical fund being different.


Under IFRS a feeder fund will consolidate a master fund over which it has control. Under US GAAP the master financial statements are attached to the feeder’s financial statements.


IFRS discloses “Net assets attributable to holders of redeemable shares” as a liability. US GAAP discloses “Net Assets” as equity.


Written but not yet effective


International Financial Reporting Standard 9 – Financial Instruments


International Financial Reporting Standard 13 – Fair Value Measurement


Proposed Exposure Draft 2011/04 Investment Entities


Specific requirements on the format and content of this statement.


Required to be disclosed separately in the statement of operations and statement of changes in equity.


Cash flow statement Disclosures Required in all instances.


IFRS 7: Qualitative and Quantitative disclosures on the nature and extent of risks arising from financial instruments.


Financial highlights


No specific requirement, however general disclosure requirements under IFRS 7.


Fair value of investee funds No such practical expedient in the standards.


Disposal of securities


IFRS does not prescribe how to calculate the cost of disposed securities.


If certain conditions are met, an investment entity can be exempt from disclosing a cash flow statement.


Required risk disclosures not as extensive compared to IFRS 7, however ASC 815 does contain specific derivative disclosures.


Specific requirement on the format and contents of financial highlights.


Use of the NAV per share as a practical expedient for fair value is allowed


Topic 946 requires an IC to determine the cost of disposed securities using the average cost of the securities or specifically identifying the cost of each security sold.


Although the guidance is silent under IFRS, NAV per share is commonly used as an indication of fair value.


The amount of realised gain (or loss) on the disposal of a security could be different under US GAAP and IFRS depending on the method used to determine the cost of the security disposed.


CAYMAN FUNDS | 2012 59


This would result in different financial statement captions for investment companies applying US GAAP or IFRS and may affect the comparability of financial information.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80