Hedge accounting and financial instruments

A significant number of non-regulated Private Equity / Hedge Funds structures have been incorporated in Luxembourg during the last couple of years, and the trend remains positive.

At the same time, the complexity of their operations has increased, generating new situations with significant technical difficulties for the accountants and financial professionals.

This dedicated accounting module is designed to provide Luxembourg accounting professionals with a comprehensive overview of the most critical accounting issues under Luxembourg GAAP identified in the Private Equity and Hedge Funds industry.

Theory, real life examples and practical exercises are combined during the training.

Objectives

By the end of this training, the participants will be able to:

• Understand the accounting law applicable to unregulated Private Equity / Hedge Funds structures
• Identify and address the key risk areas when accounting for those operations
• Have a better understanding of main specific instruments used in the Private Equity / Hedge Funds industry and of related accounting treatments under Luxembourg GAAP
• Make the link with existing tax structures from an accounting point of view
• Properly disclose the transactions in the annual accounts
• Apply in practice the examples analysed during the training

• Introduction
• Luxembourg GAAP framework and compliance requirements
• Luxembourg accounting law (including the last changes in the accounting law)
• Preparation of annual accounts
• Consolidation requirements
• Luxembourg Standard Chart of Accounts
• Electronic filing
• Balance sheet - assets
• Acquisition cost
• Equity and debt investments (cost, valuation, impairment, currency)
• Balance sheet - equity
• Multiple classes of shares, Redeemable Preferred Shares
• Capital contribution without issuance of shares
• Interim dividend
• Balance sheet - liabilities
• Hybrid financial instruments (e.g. PEC, CPEC, PPL, …)
• Guarantees, commitments, bank covenants (risks and disclosure)
• Contribution in kind, merger liquidation, etc
• Conclusion