United States

AICPA Accounting and Valuation Guide released

FINANCIAL REPORTING INSIGHTS  | 

The American Institute of Certified Public Accountants (AICPA) recently released its new Accounting and Valuation Guide, Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies. This guide provides nonauthoritative guidance and illustrations regarding the accounting for and valuation of portfolio company investments held by investment companies within the scope of FASB ASC 946, Financial Services—Investment Companies (including private equity funds, venture capital funds, hedge funds and business development companies). The guide will assist preparers of financial statements, independent auditors and valuation specialists in addressing many accounting and valuation issues (such as unit of account, transaction costs, calibration, the impact of control and marketability, backtesting) that have emerged over time in estimating the fair value of these investments.