Real Estate Investment Funds: Financial reporting - Alfi
Real Estate Investment Funds: Financial reporting - Alfi
Real Estate Investment Funds: Financial reporting - Alfi
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3. Continue to produce<br />
Fund NAVs/financial<br />
statements within<br />
normal timeframes<br />
a. If management does not wish to delay the<br />
issue of Fund NAVs/financial statements then<br />
consideration will have to be given to the<br />
adequacy of the information received as<br />
regards to producing accurate <strong>reporting</strong>.<br />
b. Where this is not sufficient, given current<br />
market conditions, management should seek<br />
additional information so as to base ownvaluations<br />
of "investee" funds on as much<br />
data as is available. This could take the form<br />
of increased monitoring calls with<br />
management of "investee" funds and further<br />
detailed analysis of trends in the geographical<br />
markets and sectors in which the "investee"<br />
funds invest.<br />
c. It is the primary responsibility of<br />
management to ensure that sufficient, reliable<br />
data is available and has been used in<br />
calculating the Fund NAV.<br />
d. Given the current market volatility<br />
compounded by time lags in receiving<br />
information in a FOREF environment, and<br />
especially if the NAV is used for pricing<br />
issues and redemptions, and thus affects the<br />
distribution of value in the fund between<br />
investors, careful consideration needs to be<br />
given as to whether this approach is<br />
appropriate. The Valuation Policy of the<br />
FOREF should specify whether any<br />
adjustments may be made and under<br />
what circumstances.<br />
e. In any of the above scenarios, management<br />
should also provide additional disclosures in<br />
their financial statements with respect to<br />
valuations and, if necessary, the "going<br />
concern" status of the FOREF. Examples of<br />
the information to be disclosed regarding the<br />
valuation of "investee" funds may include:<br />
a discussion of the uncertainties in the<br />
valuations based on the review of audited<br />
financial statements,<br />
any caveats made by the valuers of the<br />
"investee" funds in their reports<br />
sensitivity analysis of valuations and<br />
a discussion of the uncertainty in respect of<br />
the property types and geographical markets<br />
that the "investee" fund is exposed to.<br />
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