AICPA Releases Final Guide on Valuation of Venture Capital and Private Equity Investments

The American Institute of CPAs (AICPA) has issued guidance for investment companies on how to fair value their portfolio company investments. The accounting and valuation guide titled Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies is intended to harmonize views of industry participants, auditors and valuation specialists.

The guide provides nonauthoritative guidance and examples 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, Financial Services–Investment Companies (including private equity funds, venture capital funds, hedge funds, and business development companies) in determining Fair Value in accordance with FASB ASC 200.

The guide was developed by the AICPA PE/VC Task Force, which includes members from the PE/VC industry, auditors, valuation practitioners, and AICPA staff. David Larsen, Managing Director of Duff & Phelps, has been a member of the AICPA PE/VC Task Force for six years and was instrumental in the development of the guide.

Read the press release here.