Investment Companies: With Conforming Changes as of May 1, 2010

Updated with conforming changes as of May 1, 2010, the guide includes relevant guidance contained in standards issued through that date, supplemented with specific "how-to" recommendations that show how to apply the standards to investment companies. Topics covered include investment valuation; financial instruments; capital accounts; and complex capital structures, such as master-feeder funds, unit investment trusts, and separate accounts of life insurance entities. Further, the guide includes illustrative reports on examinations of securities pursuant to Rule 206(4)-2 of the Investment Advisers Act of 1940 that have been updated for the new SEC custody rules (Release Nos. IA-2968 and IA-2969).

The following guidance is particularly significant to accounting and auditing in the investment company industry:

· FASB ASU No. 2009-12, Fair Value Measurements and Disclosures (Topic 820): Investments in Certain Entities That Calculate Net Asset Value per Share (or its Equivalent)

· SEC Release Nos. IA-2968, Custody of Funds or Securities of Clients by Investment Advisers, and IA-2969, Commission Guidance Regarding Independent Public Accountant Engagements Performed Pursuant to Rule 206(4)-2 Under the Investment Advisers Act of 1940

· FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities -- an amendment of FASB Statement No. 133 (FASB ASC 815-10)

· FASB Statement No. 141(R), Business Combinations (FASB ASC 805)

· TIS sections 6910.16-.33 and 2220.18-.27

· FASB Statement No. 165, Subsequent Events, and FASB ASU No. 2010-09, Subsequent Events (Topic 855): Amendments to Certain Recognition and Disclosure Requirements