Why is accrued income not included for Market Value calculation of a hedge fund?

Question

While calculating Positions of a mutual fund, Accrued Income from the securities is included but the same is not included for a Hedge fund? Why is it so?

Also can anyone suggest where I can find any information about Positions value calculation for a hedge fund?

Answer 1

Says who? Hedge fund accounting is the same as accounting for any other type of fund.

Answer 2

Why do you say this? Hedge funds just like mutual funds do their best to have fund values reflect true market values because they are taking in new money and redeeming shares at their VAMI (which is like NAV for mutual funds). Accrued income would certainly be included as long as the fund is reasonably certain they will get this income. Is it possible that the fund you are looking at does not think it is really going to collect the income?



Edit: Note that there is no set of rules for how hedge funds account for their "positions value". They do it in some way that they believe is fair to existing and prospective clients and then disclose it. There is also a fund administrator who is supposed to have some say in it (but never really does).

Answer 3

They use mark to market accounting. Not accrual accounting.