Financial Accounting, Advisory and Reporting ServicesReal Estate

EY Luxembourg

2 Financial Accounting, Advisory and Reporting Services

Forewords

EY Luxembourg real estate practice comprises over 120 experienced professionals. We provide audit and assurance, tax and legal, advisory and transaction services to real estate fund managers, investors, lenders and service providers. With a significant market share, our team understands and provides insights into industry issues that real estate stakeholders need to address.

As part of our real estate practice, we have a fully dedicated team of professionals who advise fund managers and service providers on reporting matters. Our financial accounting, advisory and reporting team is versatile and provides a large range of financial advisory services at all stages of the fund life cycle, starting with assistance in choosing the reporting framework through to the preparation of management and financial reports. Our service offering includes innovative solutions to improve the efficiency of reporting capabilities and reporting platform performance of fund managers and service providers. Due to the highly international nature of real estate fund managers and investment structures, our financial accounting, advisory and reporting team is well connected with other real estate professionals around the world to find solutions at every stage of the reporting process and across all locations.

Our financial accounting, advisory and reporting team comprises experts and experienced professionals with in-depth knowledge of financial reporting in the real estate fund industry. The team also has extensive experience in implementing successful reporting processes and advising fund managers on strategic decisions. Combined with our experience in real estate, our team can propose industry insights, share best practice and propose value added services for fund managers and service providers.

We have been successful in building trustful relationships with our clients and becoming a business partner to fund managers and service providers helping them to best meet their reporting activities. At the same time we want to play a role in shaping the future of the real estate industry in a positive way and contribute to the development of best practice reporting and frameworks that are relevant to our industry. Over recent years, our reporting team has proactively shared with the market its knowledge and experience and has published leadership papers.

In short, our ambition is to ensure that fund managers and service providers receive high quality service and insightful advice in order to help them be successful.

Thierry BertrandPartner, Leader of Financial Accounting,

Advisory and Reporting Services

Renaud BreyerExecutive Director

Financial Accounting, Advisory and Reporting Services 1

Financial models Risk models Tax and regulatory structures Fee structures Operating platforms Capital markets and transactions

Product lifecycle – helping you succeed every step of the way

Product launch Investors and fund managers are increasingly demanding in terms of reporting and adherence to industry best practices. We realize that the success and efficiency of the on-going operations depend on the choice of appropriate reporting framework, a clearly defined level of adherence to industry guidelines such as INREV and the design of the right operating model when a fund is launched.

Our professionals use their experience gained in servicing real estate fund managers and service providers to provide you with insights on industry best practices, assist you in choosing the appropriate reporting framework and in setting up an efficient fund reporting operating model. We provide hand-on solutions to ensure easy implementation.

On going operations

Investors expect fund managers and service providers to run their back office activities efficiently and to provide timely reporting to stakeholders. This is often a challenge in a complex regulatory environment with increasing IT costs and difficulty in obtaining adequate staff.

Managers confronted with these challenges need to improve their reporting capabilities by increasing efficiency of the financial reporting process, using tailor-made tools and sourcing the right people.

We support fund managers and service providers in optimizing the financial reporting process by advising them on process improvements, selecting and implementing IT solutions and training finance teams.

Transactions

Transactions are often complex and require specific tax and reporting expertise. The closing process is more efficient when transactions are addressed in a timely manner.

Our professionals can support finance teams in recording these transactions at the time they occur and provide technical expertise when required.

In addition, our professionals have extensive experience in supporting fund managers and service providers faced with technical challenges, such as providing them with support in IFRS conversion.

Integrateacquisitions

Structuretransactions

Duediligence

Commercialdesign

Tax and legalstructures

Financial frameworks

Designoperations

Risk management, governance and control

TrainingKnowledge

Financial and framework reporting

Update Process

ReportEvaluate

Product launch TransactionsOngoing operations

Identifydeals

2 Financial Accounting, Advisory and Reporting Services

Our value proposition

Product launch

You are launching a product. We propose:

• Review of prospectus reporting framework• Advice on adherence to INREV and other industry guidelines• Advice on the definition of adjustments to obtain fund’s NAV

(including INREV compliance)• Advice on the choice of accounting policies• Modeling of KPIs, NAV and trial run• Design of quarterly and year-end financial report templates• Advice on the implementation of specific policies and procedures

related to accounting rules and regulations

On-going operations

You are implementing an operating platform. We propose:

• Systemic improvements to the financial reporting operating model. This includes: Design of consolidation process under Lux GAAP, IFRS and US GAAP• Design of reporting efficiency tools, such as close-the-books

checklist, accounting policy manual, IFRS checklist, group reporting instructions, etc.

• Development of tailor-made tools such as IFRS and US GAAP adjustments and KPIs computation

• Selection and implementation of software solutions (e.g. bookkeeping, consolidation, reporting)

• Support in outsourcing strategic decisions • Selection of service providers and definition of service level

agreement• Review and update IT interfaces with new providers, such as

accounting firms, tax advisors and property managers

You wish to improve your existing reporting process capabilities. We propose:

• Identification of inefficiencies and areas needing improvement• Evaluation of IT capabilities for existing financial reporting

process• Selection of service providers and implementation of service

level agreements• Implementation of fast close approach through re-design or

improvement of the reporting process. More specifically:• Advice in order to improve efficiency between supply

processes (lease management, treasury function, tax reporting, etc.) and implementation of IT solutions

• Selection and implementation of IT solutions, such as bookkeeping and consolidation software, and data room

• Workshop with users to obtain “real life” feedback• Support in data migration between previous software and new

software • Assistance in recruitment of finance team

Your team needs specific trainings. We propose:

• Coaching sessions• Face-to-face training sessions covering:

• New and amended IFRS standards and/or Luxembourg legal and regulatory requirements (e.g., tax) with insight into the practical implications

• Industry guidelines (e.g., INREV)• Consolidation• Fund structuring• Impact and opportunities of the AIFMD• Roles and responsibilities of directors and service providers

• Use of learning materials including “software based” modules

Financial Accounting, Advisory and Reporting Services 3

Your finance team is overloaded and you are looking for resources. We propose:

• Temporary staff assignment• Assistance for preparation of consolidated financial statements

and consolidation reporting • Full preparation of consolidated financial statements and/or

statutory annual accounts• Preparation of close-the-books instructions, control checklists

under Lux GAAP, IFRS and US GAAP• Assistance in determining the correct accounting treatment of

financial instruments (including hedge accounting strategies), impairments, valuations, actuarial calculations, foreign currency accounting and complex revenue arrangements under Lux GAAP, IFRS and US GAAP

You wish to assess your level of compliance with reporting guidelines and receive industry insight on how to improve your reports to stakeholders. We propose:

• Evaluation of correct level of compliance with transparency and leverage requirements as defined in the AIFMD and action plan to be implemented

• Review of standalone and consolidated financial statements and more specifically:• Assessment of the level of compliance with accounting

frameworks, such as EVCA, EPRA, INREV, Lux GAAP, IFRS and US GAAP

• Extracting information (for example, statistics) from the financial statements into a form/report

• Benchmarking with industry practice• Re-design of reporting templates to align with investors

expectation and industry best practice

You struggle to compute deferred tax and to prepare related disclosures. We propose:

• Design of tools to compute deferred taxes and monitor tax efficiently

• Compute deferred tax, effective tax rate and monitoring tax structuring efficiency

• Review deferred tax computation and disclosures

Transactions

You wish to convert your financial statements to IFRS and US GAAP. We propose:

• Support in conversion into IFRS and US GAAP. This includes:• Identification of gaps and accounting options• Assess the impact of conversion on the control environment

and information systems• Definition of a conversion plan • Computation of conversion adjustments• Preparation of IFRS or US GAAP first time adopter financial

statements

You need the advice of a technical expert. We propose:

• Drafting of reports to those in charge of corporate governance on technical accounting questions and on key judgments and estimates made by the preparers of financial statements

• Support in consolidation requirements including consolidation scope, link with exit strategy and exemptions

• Preparation of technical discussion papers to provide management with robust arguments and practical insights to support specific accounting treatments. For example, debt versus equity, presentation of financial instruments and accounting analysis of PECs and CPECs under Lux GAAP, IFRS and US GAAP, purchase price allocation for a business combination

• On-call support arrangements to supply immediate access to technical professionals with practical experience of accounting challenges and industry issues

• Luxembourg GAAP, IFRS and US GAAP technical advice and accounting opinions

• Acquisition and disposal accounting• Reporting to investors on specific transactions• Preparation of special purpose financial statements

4 Financial Accounting, Advisory and Reporting Services

Our dedicated team of multidisciplinary specialists

Michael HornsbyPartner, Audit and Assurance Servicesmichael.hornsby@lu.ey.com+352 42 124 8310

Thierry BertrandPartner, Leader of Financial Accounting, Advisory and Reporting Services thierry.bertrand@lu.ey.com+352 42 124 8845

Florence Rupert Senior Manager, Financial Accounting, Advisory and Reporting Servicesflorence.rupert@lu.ey.com+352 42 124 8195

Renaud BreyerExecutive Director, Financial Accounting, Advisory and Reporting Servicesrenaud.breyer@lu.ey.com +352 42 124 8255

EY | Assurance | Tax | Transactions | Advisory

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This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.

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