IFM12526 - Offshore Funds: Reporting funds: computation of reportable income: adjustments for capital items
Regulations 64 and 65 of SI 2009/3001
Reporting funds must identify capital items that would fall under the heading “Net capital gains/losses” in accounts prepared using the Investment Association’s Statement of Recognised Practice (the Investment Association SORP).
In this context ‘Investment Association SORP’ means, in relation to any period of account for which it is required or permitted to be used, the Statement of Recognised Practice relating to authorised investment funds issued by the Investment Association in November 2008, as from time to time modified, amended or revised (regulation 64(5)).
The figure used as the starting point must be adjusted for any gains or losses falling within the heading by deducting gains and adding losses.
That figure must also be adjusted by adding:
- any other expenses directly related to the acquisition or disposal of investments;
- any costs relating to the setting up, merger or dissolution of the fund, and
- in respect of reporting periods commencing on or after 1 April 2017, any sums payable or allocated to the manager by reference to an increase in the net asset value of the fund or a formula designed to reward the manager’s performance.
Trading income
No trading income or profits may be deducted from the starting point in accordance with this regulation, even in cases where the Investment Association SORP might classify such income or profit as capital, except in cases where regulation 80 applies to treat such income or profits as arising on investment transactions (see IFM12554 onwards).