The AICPA Accounting and Valuation Guide was developed to provide guidance for valuation specialists, preparers of financial statements and auditors on fair value (FV) measurement of portfolio company investments. The overall objective of the guide is to provide an overview and greater understanding of the valuation process, and to offer best practice recommendations for complying with FASB “Accounting Standards Codification (ASC) 946 Financial Services – Investment Companies and ASC 820 Fair Value Measurement.”
The guidance calls for robust application of valuation methodologies and describes sophisticated techniques for supporting key inputs and assumptions and defined more-complex methodologies. Although an extensive document, the guide provides key takeaways on the following items:
Although non-authoritative in nature, the guide itself has been reviewed and approved by at least two-thirds of the members of the Financial Reporting Executive Committee and therefore should be considered in the valuation process.
For further insights in to the guide, see Baker Tilly’s whitepaper.
For more information on this topic or to learn how Baker Tilly’s private equity specialists can help, contact our team.