Guidance for after-tax reporting
The Investment and Financial Services Association (IFSA) has set up a working group to develop a ‘guidance note’ to enable members that want to publish after-tax returns to calculate these returns on a consistent methodological basis.
IFSA provides both ‘standards’ and ‘guidance notes’ for member funds, designed to inform members about industry best practice around certain areas. The decision to develop the after-tax reporting guidance note emerged during the recent production by an IFSA working group of a ‘standard’ dealing with ‘performance reporting’ by member funds.
“It was raised a number of times by members of this working group whether we should also be looking at creating a ‘guidance note’ for after-tax reporting,” according to IFSA chief executive Richard Gilbert.
IFSA subsequently decided to create a working group to “pool member thoughts on putting together a guidance note that would provide a consistent methodology for fund members wanting to report after-tax returns”.
Gilbert emphasised the guidance would not be binding on members in the same way a ‘standard’ is, and also that it is “still early days” in the development of the guidance note.
“What we are intending is to develop a guidance note whereby if a member does want to report performance on an after-tax basis this is a methodology that would be appropriate.
“We want after-tax reporting to be consistent and meaningful for the end-investor, and naturally if you have lots of companies using different methodologies it reduces the comparability.”
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