IFRS for Private Equity

• To allow attendees to prepare a set of IFRS financial statements for a Private Equity fund accounting with confidence.
• To help attendees appreciate the most important current issues and to be better able to deal with them.
• To provide the opportunity to ask questions and to consider real-life situations from within the organisation

IFRS key issues

• Introduction and course objectives
• Key elements of IFRS and most recent developments such as IFRS 9 (financial instruments) and IFRS 16 (leased assets).
• Current key private equity financial reporting issues
  • Clear and concise narrative of private equity fund financial statements
  • Asset impairment and the use of management estimates and judgements
• Case study – review of typical Private Equity IFRS financial statements and identification of key issues and challenges
• LLP reporting and IFRS – Statement of Recommended Practice (SORP) – what are the key issues?
  • Reporting interests of General and Limited Partners in the fund
  • Differentiating between different types of capital commitment – with examples
• Consolidation exemption available for ‘investment entities’ – when and how this can be applied?

 IFRS reporting of Limited Partners’ interests in funds

• This session will cover the following:
  • Accounting for initial capital commitments and IFRS drawdown
  • Equalisation in private equity and other adjustments such as interest compensation charges
  • Management fees and charges applied by General Partners
  • Realised gains and distributions
  • Capital calls including outside commitment calls

 Reporting financial assets

• The categories of investment assets identified by IFRS
  • Fair value through profit and loss (residual category)
  • Fair value through Other Comprehensive Income
  • Amortised cost
• Reporting income (dividends and interest) on IFRS equity investments
• Realized gains and losses and recognising revaluation gains and losses (unrealised)
• Key disclosures required of financial risk and sensitivity of valuations

   Fair value reporting under IFRS

• The three levels of fair value available and which one should be used and when
• Key elements of the valuation process
  • Which market to use?
  • Adjustments to market prices
• The problems with valuation of the unquoted (level 3) investments
• The specific issues with pooled funds, unquoted investments and holdings in funds of funds
• Disclosure of investment valuation risks and uncertainties
• Examples of the valuation process

The trainer qualified as a Chartered Accountant in 1987 with a six-partner firm, Gilberts, following completion of an accountancy foundation course. In the same year, he joined Binder Hamlyn to work in their Business Development Group.

In 1990 he joined a major training company to work as a trainer on their accountancy exam courses. During the next four years, he taught auditing, financial reporting issues and taxation for ACA, ACCA, CIMA and AAT exams, he also taught the ACA multi-disciplinary case study. He mainly taught full-time courses organised for Deloitte, PWC and EY; he was also personally responsible for the ACA final level auditing paper.

In 1993 he became a director of post-examination CPD training for accountants. He was also responsible for financial training programmes for non-accountants, especially solicitors. Around this time, he also started training in International Accounting Standards initially for Ernst & Young’s non-UK based professional staff in Europe.

Since 1998 he has been training on a freelance basis, concentrating on financial training for both accountants and non-accountants. The trainer also specialises in training on IFRS and US accounting standards and has presented on both subjects throughout Europe for the past 20 years. He has considerable experience in presenting training on the following topics:

• Accounting for financial instruments and insurance contracts
• IFRS reporting issues for energy and pharmaceutical businesses
• Completion accounts and the role of financial standards in corporate finance transactions
• Accounting for business combinations – mergers, acquisitions and all joint and special purpose arrangements.

Accounting for private equity IFRS funds presents two specific issues: 

1. How IFRS (UK GAAP) and company law must be applied to this specific type of business structure; and
2. How the interests of the partners (limited and general) should be valued and presented including any transactions conducted with partners during the year.

This course is designed to address both issues and will give attendees the ability to be able to prepare IFRS-compliant financial statements for a fund with greater confidence.