NEW YORK - A little-known provision in international financial reporting standards (IFRS) could require mutual funds to consolidate and report the financials of the companies they invest in, if they own a controlling interest across all of their individual funds.

Under U.S. Generally Accepted Accounting Principles (GAAP), investment companies like mutual funds, private equity holders and venture capital organizations, are exempted from consolidation requirements and allowed to account for their holdings separately in each fund at fair value.

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