Investment companies under ASC 946 are special. This is not the first time I’ve noted that in a blog! So, when it comes to annual update training, practitioners in the funds industry will get little value from a generic GAAP or IFRS update. Standard U.S. GAAP and IFRS Update courses are still covering lease accounting and revenue recognition…but what do funds care about that?!? In recent years, the FASB and IASB have issued relatively few new updates and amendments that have a significant impact on the investment management industry. But that doesn’t mean there aren’t important developments and issues to update you on!
It’s usually this time of year when I am travelling to some of my favorite “off-shore” countries to deliver our annual investment management update courses. This year, as a result of COVID-19, I’ve been making virtual visits through live webinars or self-paced eLearning covering U.S. GAAP or IFRS. We’ve been running these courses for the past decade and what makes our courses different is our unique approach to covering this industry.
Rather than waste time on topics that have little to no impact on the industry, our update courses are split into two main sections:
- Practice and application issues; and
- Accounting and regulatory update
My favorite part, and often the one most enjoyed by participants, is the practice and application issues section. In this part of the training, we focus on accounting and reporting areas for funds that are not necessarily new but are topical and relevant as a result of recent inquiries and findings. Through our network of clients in the IM industry, along with issues discussed at the AICPA Investment Companies Expert Panel, SEC Division of Investment Management, and other international regulators, we collate “hot topics” being discussed by the experts and common areas of concern. We present these issues through a series of scenario-based examples that highlight these problematic areas. For example, this year’s courses cover issues such as:
- Definition of an investment company (ASC 946) or investment entity (IFRS 10)
- COVID-19 accounting and reporting issues
- Liquidation basis of accounting
- Fair value and changes in practice as a result of the new AICPA Valuation Guide
- Financial reporting requirements (e.g. proper presentation of the Schedule of Investments)
- Partnership interest issues (e.g. carried interest, classification as debt or equity, etc.)
- Accounting for cryptocurrencies
What’s great about these practice issues is that it provides an opportunity for learners to both refresh the basic accounting and reporting requirements for funds, while also honing in on specific issues that are not clearly addressed by the standards where judgement must be applied. A great experience for the nerdy accountant in all of us!
Of course, what’s an update course without coverage of “what’s new” in the world of U.S. GAAP or IFRS? The second section of our courses focus on the new updates and amendments; however, our approach is to only focus on the relevance of these new developments through the lens of the investment management industry. Therefore, topics like leases and insurance contracts hit the cutting room floor, and instead we spend our time on developments that are more likely to impact the investment management industry.
And when covering new developments, it has to be presented with the IM industry in mind! For example, IFRS’s new business combination amendments have a wide-spread impact on all industries but learning these new requirements through an example of a pharmaceutical company will unlikely resonate. What we do is apply these principles to a more common scenario in the IM industry – one investment manager that acquires a book of business from another manager.
If there is relevance, we cover it in a way that relates the changes to the industry; otherwise, we don’t waste your time…that’s what generic update courses are for! This year’s courses cover new ASUs and IFRS amendments such as:
- Amortization of premiums on purchased callable debt securities
- Fair value disclosure improvements
- Reference rate reform
- Definition of a business
- Definition of material
- Application of the custody rule as a result of COVID-19
- Other standard setter and regulator developments
So, if you are involved in the investment management industry, including funds or investment advisors, it’s time to give our courses a try. Whether it be an introductory course covering the fundamental accounting and reporting for funds, or our annual update under U.S. GAAP or IFRS, we’ve got you covered via a live webinar training experience or self-paced eLearning. Remember, this industry is special…and your time is too valuable to waste on anything other than relevant training!
About GAAP Dynamics
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