Correct recognition and measurement of investments in venture companies is crucial to whether the annual report gives a true and fair view. The true and fair view applies for both the financial information the accounting user needs, but also whether the annual report contains sufficient information relating to valuation methods. This include the key assumptions behind the valuation and the uncertainties associated with the recognition of investments in venture companies. This master thesis has focused on whether the Danish venture funds provides sufficient information relating to recognition and measurement and the uncertainties associated hereby. The results have been compared with the accounting policies of similar companies where fair value calculations are prevalent, and where regulation is parallel to what is known for venture capital investments. The comparison is made with companies investing in properties. The analysis shows that the annual reports containing property investment generally offers the accounting users more and better information, and follow the provisions stated by the Danish Financial Statements Act regarding recognition and measurement at fair value. All companies investing in properties provide information on the key assumptions for determining the fair value, which none of the analyzed venture funds provide. The conclusion is that the recognition and measurement when venture funds invest in unlisted companies, does not give a true and fair view in accordance with the Danish Financial Statement Act. This is caused by the fact, that venture funds don’t provide sufficient information regarding the methods used to calculate the fair view, the key assumptions behind the valuation and the sensitivity to changes in the key assumptions. Finally, the venture funds do not provide information about the uncertainty regarding investment in venture companies and the possible effect on result, balance and equity.
|Educations||MSc in Auditing, (Graduate Programme) Final Thesis|
|Number of pages||109|