EVCA responds critical to interest in IAS

The European Private Equity and Venture Capital Association (EVCA) has welcomed the interest in International Accounting Standards (IAS) as given by Europe's business and political leaders during the European Union ECOFIN meeting on 15-16 July 2003. However, the EVCA has concerns about their impact on business in the European Union and their potentially negative affect to private equity and venture capital investments. In addition EVCA highlights that the International Accounting Standard IAS 27 on consolidated financial statements and accounting for investments in subsidiaries also needs to be addressed. The organisation says that it poses a serious threat to the financing of European Union companies through the private equity and venture capital industry.

IAS 27 will force private equity and venture capital funds to produce consolidated accounts if it remains as currently proposed. EVCA states that because of how private equity and venture capital houses operate - through general and limited partnerships that manage the relationship between the fund manager, the investors and the portfolio companies - the application of the notions 'group' and 'control' as used in IAS 27 for consolidated accounts will result in misleading financial statements. As drafted, IAS standards are primarily aimed at the 7,000 publicly companies listed in the European Union, but contain an option to extend their scope to include all private, non-listed companies.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• UK / Ireland
• DACH
• Nordics
• France
• Southern Europe
• CEE
• Benelux