The BVCA’s Legal & Accounting Commitee has been involved in a number of work streams in relation to the impact of new accounting and financial reporting standards on the industry in recent years, in particular the EU audit reform.
During consultations on the reform by BIS and the FRC, the BVCA successfully advocated the removal of Alternative Investment Funds from the definition of Public Interest Entities (PIE). Additionally, the BVCA strongly argued against extending the EU base legislation when implementing the reform in the UK to minimise the adverse impacts on choice, competition and cost that would arise when a restrictive non-audit regime is combined with mandatory audit firm rotation. In particular, we focussed on ensuring non-listed debt did not fall under the definition of a PIE.
The EU audit reform impacts mandatory firm rotation, audit committees and provision of non-audit services. The reform came into effect on 17 June 2016 and the BVCA produced guidance on areas for consideration by members in the May 2016 Technical Bulletin (see below).
The BVCA has been involved with proposed reporting standards that affect most members. This includes the new UK GAAP and guidance for members as to the options available with respect to financial reporting.
Although the private company regime is most relevant for most UK portfolio companies within private equity and venture capital, financial reporting rules and standards relating to public companies will be considered by the Private Equity Reporting Group and whether they should be adopted by Sir David Walker’s Guidelines on Transparency & Disclosure in Private Equity.
The Statement of Recommended Practice (SORP) assists preparers of financial statements to apply accounting standards to Limited Liability Partnerships.
Two areas that are of particular interest to BVCA members are the valuation of unquoted investments and the investment entities exemption (which permits funds to account for their investments in portfolio companies at fair value rather than consolidating them).
FOR FURTHER INFORMATION PLEASE CONTACT THE BVCA
+44 (0)20 7492 0400