As year end approaches, China's PE firms are left wondering what accounting standards to use for year-end reporting.
By staff reporter Song Yanhua
From Caijing Online
Private equity (PE) fund managers have not been given any clear guidelines on what accounting standards to adopt for their year end financial statements. The PE industry was left out of the new accounting standards defined January 2007 by the Ministry of Finance,
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According to international practices, except for listed PE firms,
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Institutional investors,
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Compared with the old accounting standards, the new standards introduce the pricing of assets according to fair value, meaning that if equity investments are considered as a trading financial asset or financial assets available for sale,
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As no specific standards have been set related to what accounting standards to adopt for P.E. firms, it is very likely that accounting standards are not unified. This may make it difficult to make meaningful cross-industry comparisons of company performance.
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