AICPA: Working Draft – Accounting and Valuation Guide: Valuation of Portfolio Company Investments of VC and PE Funds
In mid-May, the AICPA issued a working draft of an "Accounting and Valuation Guide: Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies". The Guide, developed by the AICPA PE/VC Task Force, provides guidance and illustrations for preparers of financial statements, auditors and valuation specialists. The focus of the Guide is on the accounting for and valuation of equity and debt securities of portfolio company investments in accordance with ASC 946 and ASC 820. The comment period on the Guide closed on August 15. While this Guide is still undergoing revision and is not yet authoritative, it does provide sound practice guidance in the valuation of portfolio company interests. We especially suggest reviewing the real-life case studies included in Part 2 of the Guide as you begin your year-end valuation assessments.