Fair Value Accounting for Venture Capital and Private Equity Funds (ASC 820)

If a fund’s financial statements are audited, a valuation professional may be required to determine the fair value of investments in portfolio companies. Accounting Standards Codification (“ASC”) Topic 820, which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles (“GAAP”). Fair value under ASC Topic 820 is defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”

Our expertise in traditional valuation techniques, coupled with option-based methods, provides the understanding to perform valuations of illiquid securities including early stage companies.

Illiquid investments are requiring more through analyses than in the past. Delphi provides an independent viewpoint for the valuations of:

  • Illiquid equity investments, from common stock to preferred investments with complex rights
  • Warrants & Options
  • Convertible securities