Blackstone to change accounting method

NEW YORK, June 6 (Reuters) - U.S. private equity firm Blackstone Group [BG.UL] said in a filing this week it would change some of the accounting practices it expected to use in its initial public offering.

Blackstone, which could fetch as much as $4.75 billion for its IPO, also said that it had decided not to adopt a controversial new accounting rule, known as FAS 159, or the fair value option.

The rule would have allowed the company to recognize future income from its investments immediately, by accounting for its assets at "fair value" -- or the price the instrument could fetch in a current market transaction.

That type of accounting has often been criticized when there is not a liquid market for an asset, as could be the case for privately held companies.

Instead Blackstone, said it will use a more common method of valuing its assets.

"We will record as revenue the amount that would be due to us per the fund agreements at each period end as if the fund agreements were terminated at that date," the company said in the prospectus.

(Reporting by Emily Chasan; Reuters Messaging: rm://emily.chasan.reuters.com@reuters.net;Tel: +1 646 223 6114))