Illustrative Financial Statements of Private Equity Fund holding an Investment Entity subsidiary

This publication provides illustrative disclosures which are considered best practice disclosures to be made by an Investment Entity (as a result of the Investment Entities Applying the Consolidation Exception: Amendments to IFRS 10 – Consolidated Financial Statements, IFRS 12 – Disclosure of Interests in Other Entities and IAS 28 – Investments in Associates and Joint Ventures) (the “Amendments”) which has a controlled subsidiary, that itself meets the definition of an “Investment Entity”, and which had previously consolidated that subsidiary.

 

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Illustrative IFRS financial statements 2016 – Private equity funds

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This publication provides an illustrative set of financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), for a fictional private equity limited partnership, ABC Private Equity LP. This is based on the requirements of IFRS standards and interpretations for the financial year beginning on 1 January 2016.

ABC Private Equity LP is not traded in a public market. ABC Private Equity LP’s investment objectives are to seek medium- to long-term growth by investing directly in private unlisted companies with high growth potential. It classifies all of its investments as ‘fair value through profit or loss’ (FVTPL) and does not apply hedge accounting.

The Partnership is presented as an Investment Entity in accordance with IFRS 10. As a result, the Partnership does not consolidate any subsidiaries unless they provide investment related services. No portfolio companies are consolidated, regardless of the level of holding as the Partnership meets the definition of an Investment Entity and instead, fair values these portfolio companies through its holdings in its investment holding subsidiary companies. There is only one controlled portfolio company (‘controlled subsidiary investment’) as at the period-end date of these financial statements.

The illustrative disclosures should not be considered the only acceptable form of presentation. The form and content of each reporting entity’s financial statements are the responsibility of the entity’s management. Alternative presentations to those proposed in this publication may be equally acceptable if they comply with the specific disclosure requirements prescribed in IFRS. These illustrative financial statements are not a substitute for reading the standards and interpretations themselves or for professional judgement as to fairness of presentation. They do not cover all possible disclosures that IFRS requires, nor do they take account of any specific legal framework. We recommend that readers also refer to the most recent IFRS disclosure checklist publication.

 

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SECA guidelines for the calculation and disclosure of costs of private market funds

 

You can find the SECA guidelines for the calculation and disclosure of costs of private market funds here!

 

These guidelines concern the calculation and disclosure of the costs of private market funds, such as unincorporated firms (LPCIs according to CISA or Limited Partnerships), SICARs (venture capital firms under Luxembourg law), listed companies with a focus on private market investments or similar investment vehicles (“closed-ended collective investment schemes or CIS”). These guidelines should ensure the consistent implementation of art. 48a OPO 2 on the disclosure of the costs of private market funds and, thus, the highest possible transparency on the costs of private market funds in the Swiss market.

In substance, the present guidelines are based on the Swiss Funds and Asset Management Association (SFAMA) guidelines for the calculation and disclosure of the Total Expense Rate (TER) and Portfolio Turnover Rate (PTR) of collective investment schemes dated 16 May 2008, as well as the directive on the reporting of asset management costs of the Oberaufsichtskommission Berufliche Vorsorge (Occupational Pension Supervisory Commission (“OPSC directive”)) dated 23 April 2013.

 

If you have any questions or wish to discuss these guidelines, please do not hesitate to contact us:

 

Adrian Keller
PwC
Birchstrasse 160
Postfach, 8050 Zürich
+41 58 792 23 09
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