Exposure Draft Addresses Nonpublic Investment Partnerships

The AICPA AcSEC issued a proposed statement of position that would amend SOP 95-2, Financial Reporting by Nonpublic Investment Partnerships , to include within its scope a type of investment partnership—known as a commodity pool—formed to trade interests in commodities and regulated under the Commodity Exchange Act of 1974.

Daniel J. Noll, a technical manager in the AICPA accounting standards division, explained why the amendment is necessary. “At the time we issued SOP 95-2,” he said, “we thought we later would release an authoritative accounting guide for commodity pools; instead, we issued a nonauthoritative practice aid.”

The professional literature, therefore, is officially silent with regard to commodity pools that are subject to the act’s provisions. Thus two pools with similar investment portfolios and operations—one regulated under the act and one not—could disclose differing information in their financial statements.

“The proposed amendment fills that gap in the literature by bringing commodity pools governed by the act within the scope of SOP 95-2,” Noll told the JofA .

If approved, the exposure draft’s provisions would be effective for financial statements issued for periods ending after June 15, 2001, although the AICPA encourages earlier application of it.

The proposed SOP is available on the AICPA Web site at www.aicpa.org/ members/div/acctstd/edo/index.htm.

Comments on it are due by November 15.