| Author (Person) | Chapman, Peter |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.9, No.41, 4.12.03, p30 |
| Publication Date | 04/12/2003 |
| Content Type | News |
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By Peter Chapman Date: 04/12/03 EUROPEAN private equity and venture capital firms are up in arms about proposed accounting standards which they claim would deter potential investors in the multi-billion euro market. Under the proposed standard, known as IAS 27, funds made up of a portfolio of high-risk new companies would have to issue "consolidated accounts", with valuations based on the profit and losses that the companies within the funds generate during a financial year. However, industry claims this would be misleading because the success or failure of funds is mostly based on what the investments would realize when they were sold or floated on the stock market, typically over a period of up to six years. The London-based International Accounting Standards Board is responsible for devising IAS 27. But all international standards ratified by EU experts will be mandatory by 2005 for all companies listed on European stock exchanges. Jean-Bernard Schmidt, chairman of the European Private Equity and Venture Capital Association (EVCA), told European Voice that his group is "highly concerned" about IAS 27. "The reporting of misleading accounts would have consequences on fundraising, the provision of debt for buyouts and the overall reputation of our industry," he said. Schmidt, who is also chairman and managing partner of a France-based firm Sofinnova Partners, said EVCA "strongly support international accounting standards" in general. "However, should our industry be required to apply consolidated accounts, the effect would be detrimental." |
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| Subject Categories | Law |
