Fund Accounting

Fund accounting is a specialized form of accounting that focuses on the unique requirements of investment funds, such as mutual, hedge, and private equity funds. It involves the recording, analyzing, and reporting of financial transactions associated with these funds. 

Accurate fund accounting is essential for several reasons. Firstly, it ensures compliance with legal and regulatory requirements, enabling transparency and accountability. Secondly, it provides investors with a clear understanding of their investments, facilitating informed decision-making. Lastly, it supports the overall financial health and stability of the fund.

Fund Accounting Principles and Best Practices

Thales Capital adheres to the highest fund accounting principles and best practices standards. Our team is well-versed in Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). 

We employ a meticulous approach to ensure accuracy, reliability, and consistency in financial reporting. By employing rigorous internal controls, we safeguard the integrity of your financial data, minimizing the risk of errors and fraud.

Record-Keeping

The fundamental stage of accounting is record-keeping, which involves keeping track of financial business activities and understanding the true state of assets, liabilities, earnings, and losses, among other things. It also helps to keep costs under control to reduce spending and have crucial information for legal and tax purposes. 

While there isn’t a universally agreed-upon set of record-keeping criteria for all fund types, there must be adequate supporting evidence to show why a particular investor was onboarded and the actions they took.

The formal risk-based assessment, anti-money laundering, counter-terrorist financing, and sanctions compliance procedures must all be documented by fund administrators. Any modifications to these policies must be documented.

Reporting

The core of investor and regulatory reporting is represented by the statements of financial status. They play a significant role in the decision-making process for investors. These reports give the fund management a strategic overview of the fund’s performance and efficacy, along with suggestions for maintaining or raising quality. 

Tax Implications

Depending on the fund type, different tax implications apply.

• for equity funds, there is a 15% flat tax rate on capital gains;
• for debt funds, there is an investor’s slab rate for both short- and long-term capital gains.

Fund accounting services from Thales Capital include proper tax reporting according to the existing laws. We pride ourselves on delivering high-quality fund administration and accounting services for any fund type.