The Coronavirus pandemic (“COVID-19”) is causing significant financial and operating hardships across all industries. Any companies that are currently preparing GAAP financial statements, including investment companies, should consider whether or not the impact of COVID-19 represents a significant event as defined in FASB Accounting Standards Codification (“FASB ASC”) 855, Subsequent Events.Read More
In this post, we will discuss the rules and mechanics of alternative investment fund tax allocations. Most alternative investment vehicles are structured as partnerships. Therefore, Subchapter K of the Internal Revenue Code (“IRC”), specifically IRC Section 704, provides the guidance and rules for tax allocations.Read More
Non-public entities, including private funds and investment advisors, will likely see changes to Auditor’s Reports, or the Opinion, included beginning with December 2020 audited financial statements.
Effective March 12, 2010, the Securities and Exchange Commission (“SEC”) adopted amendments to Rule 206(4)-2 of the Investment Advisors Act of 1940 (the “Custody Rule”). These amendments are designed to provide additional safeguards when a registered advisor is deemed to have custody of client funds or securities by requiring the advisor to undergo an annual surprise examination by an independent public accountant who is subject to regular inspection by the Public Company Accounting Oversight Board. The annual surprise examination procedures are designed to verify that client funds and securities, of which an investment advisor has custody, are held by a qualified custodian and either in a separate account for each client or under the advisor’s name as agent or trustee for the client.Read More