Audit and Accounting Guide: Investment Companies

Chapter 7 Financial Statements of Investment Companies

Gray shaded text in this chapter reflects guidance issued but not yet effective as of the date of this guide, July 1, 2018, but becoming effective on or prior to December 31, 2018, exclusive of any option to early adopt ahead of the mandatory effective date. Unless otherwise indicated, all unshaded text reflects guidance that was already effective as of the date of this guide.

Update 7-1 Regulatory: Investment Company Reporting Modernization

In October 2016, the SEC issued Release Nos. 33-10231; 34-79095; IC-32314; Investment Company Reporting Modernization. Intended to modernize the reporting and disclosure of information by registered investment companies, the final guidance adopts new rules and forms and amends existing rules and forms.

Standardized and enhanced disclosures about derivatives in investment company financial statements are required by amendments to Regulation S-X. Included in the many changes that result from the amendments are requirements that the details about investments in derivatives be presented in a fund’s schedule of investments, rather than in the notes to the financial statements. The compliance date for amendments related to Regulation S-X was August 1, 2017.¹

Readers are encouraged to read the release at www.sec.gov.

7.01 FASB Accounting Standards Codification (ASC) 946-205-45-1 states ...