Working Draft of the AICPA Accounting and Valuation Guide

Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies

May 15, 2018

The AICPA’s Financial Reporting Executive Committee has issued a working draft of the AICPA 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 for preparers of financial statements, independent auditors, and valuation specialists regarding the accounting for and valuation of portfolio company investments held by investment companies within the scope of FASB ASC 946 (including private equity funds, venture capital funds, hedge funds, and business development companies). This guide may also be useful for non-investment companies, such as corporate venture capital groups or pension funds, which make investments in similar types of portfolio companies and pursue similar strategies (however, the numerous and varied aspects of these non-investment entities were not considered or contemplated in the preparation of this guide.) This guide addresses many accounting and valuation issues that have emerged over time to assist investment companies in addressing the challenges in estimating fair value of these investments. Interested parties are encouraged to review the working draft and submit their comments.

We are looking for your informal feedback on this working draft. All comments will be kept confidential and will not be posted on the AICPA Web site. If you would like to provide comments, please e-mail them to Yelena Mishkevich at yelena.mishkevich@aicpa-cima.com by August 15, 2018. The Financial Reporting Executive Committee and the PE/VC Task Force that developed this working draft are looking forward to hearing from you.

Please note that this working draft will undergo thorough editorial review before it is finalized. As such, when commenting, please do not worry about editorial issues.

The working draft is split into two documents (Part I [chapters 1-14] and Part II [appendices A-C and Glossary]), which are available to download as PDF files.

Download Part I of the Working Draft

Download Part II of the Working Draft