Education

Equity Market Minute

This week’s Equity Market Minute shines light on equity market ‘melt-ups’ and finds the current fundamental backdrop to be more conducive to a bull market than a euphoric rise in stock prices. Prior ‘melt-up’ phases were characterized by a rapid rise in price coupled with more tepid earnings growth. Earnings and price have accelerated at…

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MiFID II: Financial industry’s disruption on a global scale

The European Union’s long-anticipated implementation of MiFID II reform will change the way institutional investors pay for research. Investors’ scrutiny of value for money is intensifying as their own businesses come under pressure from end-users’ evaluation of prices paid vs. the value added to their income. The result may be a reduction and redistribution of…

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2018: New Year, New Limits

The recently enacted Tax Cuts and Jobs Act, signed into law Dec. 22, 2017, is the most significant tax legislation since 1986. In this alert, we focus on the changes that affect individual income, gift and estate tax. Individual income tax New tax brackets Most income previously included in the 10 percent and 15 percent…

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U.S. International Tax Reform: The New Global Tax Landscape

As part of yesterday’s historic passing of the Tax Cuts and Jobs Act (the Act), the U.S. international tax world has been redefined. The Act contains significant international tax provisions that will drastically change the way U.S. multinationals are taxed and conduct business abroad as well as change how foreign multinationals will conduct business in…

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Benefits of Custody Examination vs. Financial Statement Audit

Registered investment advisers (RIAs) that maintain custody of customer assets, and who are registered with the Securities and Exchange Commission (SEC), are subject to various regulations intended to protect their clients. One such rule under the Investment Advisers Act of 1940 – the “custody rule” (i.e., SEC Rule 206(4)) – requires RIAs to obtain external…

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Accounting for Equity Interests Other Than the Consolidation Model

Fund managers are typically responsible for the preparation of financial statements of their underlying investment, in accordance with Accounting Standards Codification (ASC) 946 – Financial Services – Investment Companies, which requires the valuation of investments under ASC 820 – Fair Value Measurements. Please note that this topic excludes interests that are required to be consolidated…

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AICPA Revenue Recognition Working Group Releases Compliance Concerns for Fund Managers

The American Institute of Certified Public Accountants’ (AICPA) Revenue Recognition Task Forces have been issuing industry specific guidance related to Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers. Several of these issues relate specifically to fund managers and should be considered when implementing the new revenue recognition standard. Identification…

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The Challege of Liquidation Basis of Accounting

A liquidation may present several obstacles to be navigated by the organization, one such obstacle being the accounting. The proper application of Liquidation Basis of Accounting (LBOA) within financial statements can be quite challenging. The goal behind LBOA is to report the amount that an investor may expect to receive after the completion of the…

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An Evolving Hedge Fund Industry Looks for New Investors in a Changing Landscape

Changing investor demographics, pressure to boost investment results while also cutting fees, increased competition and the ramifications of potential tax reform will drive significant changes in the hedge fund industry over the next few years. Following are overviews of several key trends that will present new opportunities and new challenges. Success for any hedge fund…

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