The Hedge Fund Law Report

The definitive source of actionable intelligence on hedge fund law and regulation

Articles By Topic

By Topic: Mark-to-Market Accounting

  • From Vol. 8 No.7 (Feb. 19, 2015)

    Tax Practitioners Discuss Taxation of Options and Swaps and Impact of Proposed IRS Regulations

    The IRS is nudging hedge funds and other market participants toward mark-to-market accounting for many swaps and other derivatives.  Some rules, such as those for Section 1256 contracts, are already in place, while other regulations are in the works.  At a recent presentation, leading tax practitioners offered an overview of the current regime of taxation of swaps and options and insights into how proposed IRS regulations may affect that regime.  See also “Tax Practitioners Discuss Taxation of Swaps, Wash Sales, Constructive Sales, Short Sales and Straddles at FRA/HFBOA Seminar (Part Four of Four),” The Hedge Fund Law Report, Vol. 7, No. 5 (Feb. 6, 2014).

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  • From Vol. 2 No.1 (Jan. 8, 2009)

    Mark-to-Market Accounting in the Absence of Marks

    Recent statements from the SEC and the Financial Accounting Standards Board suggest that hedge fund managers and auditors will have significantly more leeway in establishing the fair value of financial assets, a move that has been welcomed by the hedge fund community, but that at the same time has raised issues of interpretation and application.  Many hedge funds are concerned that the lack of clear regulatory guidance might open the door to valuation inconsistencies.  At the heart of this matter are recent clarifications regarding Financial Accounting Standard (FAS) 157, which outlines the basic rules that apply to mark-to-market accounting.  We detail those clarifications, and analyze regulatory guidance – such as it is – on applying those clarifications, especially in today’s environment, where marks are often hard to come by.

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