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Accounting for Private Equity Investments: A Comprehensive Guide
Author: Dr. Evelyn Reed, CPA, CFA. Dr. Reed is a Professor of Accounting at the University of California, Berkeley, specializing in investment accounting and financial reporting. She has over 20 years of experience advising private equity firms and has published extensively on the topic of accounting for private equity investments.
Publisher: Wiley Finance, a leading publisher of financial textbooks and professional resources with a strong reputation for accuracy and in-depth analysis in the financial accounting field.
Editor: Mr. David Chen, CA. Mr. Chen is a chartered accountant with 15 years of experience in auditing and financial reporting, specializing in private equity transactions.
Keywords: accounting for private equity investments, private equity accounting, investment accounting, fair value accounting, cost method, equity method, consolidation, private equity fund accounting, IFRS, GAAP, carried interest, management fees
Introduction: Navigating the Complexities of Accounting for Private Equity Investments
Accounting for private equity investments presents unique challenges due to the illiquid nature of the underlying assets and the complex structures often employed. Unlike publicly traded securities, private equity investments lack readily available market prices, requiring sophisticated valuation techniques and a thorough understanding of relevant accounting standards. This article provides a comprehensive overview of the methodologies and approaches used in accounting for private equity investments, focusing on both US GAAP (Generally Accepted Accounting Principles) and IFRS (International Financial Reporting Standards). Proper accounting for private equity investments is crucial for accurate financial reporting, investor transparency, and effective decision-making.
Methods of Accounting for Private Equity Investments
The choice of accounting method depends on several factors, including the level of influence the investor holds in the investee company and the nature of the investment. The primary methods used in accounting for private equity investments are:
1. Cost Method: This method is applied when the investor has no significant influence over the investee company (generally less than 20% ownership). The investment is recorded at its original cost, and any changes in the fair value of the investment are not reflected in the investor's financial statements until the investment is sold. This method is relatively simple but can significantly underrepresent the true economic value of the investment, especially in cases where the investee's value has appreciated significantly.
2. Equity Method: When an investor has significant influence (generally between 20% and 50% ownership), the equity method is employed. Under this method, the investment is initially recorded at cost, but subsequent changes in the investee's net assets are reflected in the investor's financial statements. The investor recognizes its share of the investee's net income or loss in its income statement and adjusts the carrying amount of the investment accordingly. This method provides a more accurate representation of the investment's value than the cost method.
3. Consolidation: If an investor controls the investee company (generally more than 50% ownership), the investee's financial statements are consolidated into the investor's financial statements. This means the assets, liabilities, revenues, and expenses of the investee are combined with those of the investor, providing a comprehensive picture of the combined entity. Consolidation necessitates the application of complex accounting rules, particularly regarding minority interest and non-controlling interests.
4. Fair Value Method: Regardless of the ownership percentage, some investments might be accounted for at fair value through profit or loss (FVTPL) or fair value through other comprehensive income (FVOCI). This approach requires the investment to be valued at its fair value at each reporting period. Determining fair value can be challenging for illiquid private equity investments, often requiring the use of valuation techniques such as discounted cash flow analysis, comparable company analysis, or precedent transactions. The chosen method should reflect the nature and purpose of the investment.
Valuation Techniques in Accounting for Private Equity Investments
Accurate valuation is crucial in accounting for private equity investments, especially when using the fair value method or equity method. Commonly used valuation techniques include:
Discounted Cash Flow (DCF) Analysis: This method projects future cash flows and discounts them back to their present value using an appropriate discount rate. It's considered a robust method but requires making assumptions about future performance.
Comparable Company Analysis: This method compares the investment to similar publicly traded companies to estimate its value. It relies on finding truly comparable companies, which can be challenging for private companies.
Precedent Transactions: This method examines the prices paid in similar transactions to determine the value of the investment. It's useful but can be influenced by market conditions at the time of the precedent transaction.
Asset-Based Valuation: This method values the investment based on the fair value of its underlying assets. It's suitable for companies with readily identifiable and marketable assets.
Reporting and Disclosure Requirements for Private Equity Investments
Accounting for private equity investments requires meticulous reporting and disclosure. Investors must disclose relevant information about their investments, including the accounting method used, the valuation techniques applied, and any significant assumptions made. Transparency is crucial for ensuring accurate financial reporting and maintaining investor confidence. The specific reporting requirements vary depending on the applicable accounting standards (GAAP or IFRS) and the nature of the investment.
Challenges and Considerations in Accounting for Private Equity Investments
Accounting for private equity investments presents several challenges:
Illiquidity: The illiquid nature of private equity investments makes valuation challenging.
Complex Structures: Private equity investments often involve complex legal and financial structures, making accurate accounting more difficult.
Lack of Transparency: Private companies are not subject to the same disclosure requirements as publicly traded companies, making it challenging to gather the necessary information for accurate valuation and accounting.
Valuation Uncertainty: Different valuation techniques can lead to varying results, creating uncertainty in the reported value of the investments.
Conclusion
Accounting for private equity investments is a complex process requiring a deep understanding of accounting standards, valuation techniques, and the specific characteristics of the investments. The choice of accounting method depends on several factors, including the level of influence and the investment's purpose. Accurate valuation is crucial, and transparency in reporting and disclosure is essential for maintaining investor confidence and ensuring accurate financial reporting. The complexities involved necessitate expertise in both accounting and private equity investment strategies for successful navigation.
FAQs
1. What is the difference between the cost method and the equity method in accounting for private equity investments? The cost method records the investment at its initial cost, while the equity method reflects changes in the investee's net assets. The choice depends on the level of influence the investor has.
2. How is fair value determined for illiquid private equity investments? Fair value is often estimated using valuation techniques such as discounted cash flow analysis, comparable company analysis, and precedent transactions.
3. What are the key disclosure requirements for private equity investments? Disclosures include the accounting method used, valuation techniques employed, significant assumptions made, and any impairment losses.
4. What are the implications of choosing the wrong accounting method for private equity investments? Using an incorrect method can lead to misstated financial statements, misleading investors, and potential regulatory issues.
5. How does consolidation affect the financial statements of a private equity firm? Consolidation combines the financial statements of the investor and the investee, providing a comprehensive picture of the combined entity.
6. What role does carried interest play in accounting for private equity investments? Carried interest, the share of profits received by the general partners, is accounted for differently based on the partnership agreement and applicable accounting standards.
7. How do IFRS and GAAP differ in their treatment of private equity investments? While both address similar principles, there are nuances in their guidance on topics like fair value measurements and consolidation.
8. What is the impact of impairments on the accounting for private equity investments? Impairments, when an investment's value falls below its carrying amount, must be recognized and reported according to relevant accounting standards.
9. How can technology improve the accuracy and efficiency of accounting for private equity investments? Software solutions can automate many aspects of the valuation process, enhance data management, and improve reporting efficiency.
Related Articles
1. Understanding Fair Value Measurement in Private Equity: This article delves into various fair value measurement techniques specific to the complexities of private equity investments and the nuances of applying these techniques.
2. Consolidation Methods for Private Equity Portfolio Companies: A detailed guide on the different consolidation techniques used for private equity investments, highlighting the differences and implications of each method.
3. The Impact of IFRS 9 on Private Equity Accounting: Analysis of the effect of IFRS 9's financial instrument classifications and impairment requirements on private equity accounting.
4. Private Equity Fund Accounting: A Practical Guide: A step-by-step guide focusing on the unique aspects of accounting for private equity fund structures.
5. Tax Implications of Private Equity Investments: Explores the tax ramifications of various investment structures and strategies for private equity investors.
6. Valuation Adjustments in Private Equity Transactions: A detailed look at the valuation adjustments often required to ensure accuracy during the acquisition and accounting phases of a private equity investment.
7. Due Diligence and Accounting in Private Equity Acquisitions: Examines the critical role of accounting due diligence in mitigating risks during private equity acquisitions.
8. Performance Measurement and Attribution in Private Equity: Discusses various methods for measuring and attributing returns for private equity investments, incorporating accounting data.
9. Reporting and Disclosure Requirements under GAAP for Private Equity: A comprehensive summary of the GAAP reporting standards specifically applicable to private equity firms and their investments.
| accounting for private equity investments: Private Equity Accounting, Investor Reporting, and Beyond Mariya Stefanova, 2015-02-26 Today's only advanced comprehensive guide to private equity accounting, investor reporting, valuations and performance measurement provides a complete update to reflect the latest standards and best practices, as well as the author's unique experience teaching hundreds of fund professionals. In Private Equity Accounting, Investor Reporting and Beyond Mariya Stefanova brings together comprehensive advanced accounting guidance and advice for all private equity practitioners and fund accountants worldwide: information once available only by learning from peers. Replete with up-to-date, user-friendly examples from all main jurisdictions, this guide explains the precise workings and lifecycles of private equity funds; reviews commercial terms; evaluates structures and tax treatments; shows how to read Limited Partnership Agreements; presents best-practice details and processes, and identifies costly pitfalls to avoid. |
| accounting for private equity investments: Accounting and Valuation Guide AICPA, 2019-10-08 Developed for preparers of financial statements, independent auditors, and valuation specialists, this guide provides nonauthoritative guidance and illustrations 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). It features16 case studies that can be used to reason through real situations faced by investment fund managers, valuation specialists and auditors, 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, such as: Unit of account Transaction costs Calibration The impact of control and marketability Backtesting |
| accounting for private equity investments: Private Equity Harry Cendrowski, Louis W. Petro, James P. Martin, Adam A. Wadecki, 2012-03-22 An authoritative guide to understanding the world of private equity (PE) investing, governance structures, and operational assessments of PE portfolio companies An essential text for any business/finance professional's library, Private Equity: History, Governance, and Operations, Second Edition begins by presenting historical information regarding the asset class. This information includes historical fundraising and investment levels, returns, correlation of returns to public market indices, and harvest trends. The text subsequently analyzes PE fund and portfolio company governance structures. It also presents ways to improve existing governance structures of these entities. A specific focus on portfolio company operations, including due diligence assessments, concludes the text. Seamlessly blends historical information with practical guidance based on risk management and fundamental accounting techniques Assists the book's professional audience in maximizing returns of their PE investments Highly conducive to advanced, graduate-level classroom use Purchase of the text includes access to a website of teaching materials for instructional use Learn more about PE history, governance, and operations with the authoritative guidance found in Private Equity: History, Governance, and Operations, Second Edition. |
| accounting for private equity investments: International Private Equity Eli Talmor, Florin Vasvari, 2011-06-24 Bringing a unique joint practitioner and academic perspective to the topic, this is the only available text on private equity truly international in focus. Examples are drawn from Europe the Middle East, Africa and America with major case studies from a wide range of business sectors, from the prestigious collection of the London Business School’s Coller Institute of Private Equity. Much more than a simple case book, however, International Private Equity provides a valuable overview of the private equity industry and uses the studies to exemplify all stages of the deal process, and to illustrate such key topics as investing in emerging markets; each chapter guides the reader with an authoritative narrative on the topic treated. Covering all the main aspects of the private equity model, the book includes treatment of fund raising, fund structuring, fund performance measurement, private equity valuation, due diligence, modeling of leveraged buyout transactions, and harvesting of private equity investments. |
| accounting for private equity investments: Private Equity Funds James M. Schell, Pamela Lawrence Endreny, Kristine M. Koren, 2023-08-28 The best guide to private equity funds. Insight and explanations for both fund sponsors and investors. The gold standard. --Andrew Zalasin, General Partner and CFO: RRE Ventures Best Practices for Organizing and Managing a Fund With nearly $7 trillion invested in more than 20,000 funds, investor interest in the private equity industry has returned, despite the economic turmoil of recent years. Still, guidance about the organization and administration of these funds is tough to find. This 1,400+ page resource, will equip corporate lawyers, investment professionals, and tax practitioners and with best practices to manage these funds effectively. Private Equity Funds: Business Structure and Operations covers a wide range of important issues, such as: the key economic differences between various types of funds; structuring the private equity fund to meet economic expectations and investment goals; securing maximum tax benefits for the sponsor of the fund; duties of the fund's General Partner and Investment Advisor; the major regulatory issues affecting the private equity fund; and much more. Private Equity Funds: Business Structure and Operations reflects the aftermath of the financial crisis of 2007 to 2009. The authors also focus on cyber risk and the compliance obligations of investment advisers. |
| accounting for private equity investments: Private Capital - Private Equity And Beyond Prof Eli Talmor, Prof Florin Vasvari, 2019 |
| accounting for private equity investments: Mastering Private Equity Claudia Zeisberger, Michael Prahl, Bowen White, 2017-08-07 The definitive guide to private equity for investors and finance professionals Mastering Private Equity was written with a professional audience in mind and provides a valuable and unique reference for investors, finance professionals, students and business owners looking to engage with private equity firms or invest in private equity funds. From deal sourcing to exit, LBOs to responsible investing, operational value creation to risk management, the book systematically distils the essence of private equity into core concepts and explains in detail the dynamics of venture capital, growth equity and buyout transactions. With a foreword by Henry Kravis, Co-Chairman and Co-CEO of KKR, and special guest comments by senior PE professionals. This book combines insights from leading academics and practitioners and was carefully structured to offer: A clear and concise reference for the industry expert A step-by-step guide for students and casual observers of the industry A theoretical companion to the INSEAD case book Private Equity in Action: Case Studies from Developed and Emerging Markets Features guest comments by senior PE professionals from the firms listed below: Abraaj • Adams Street Partners • Apax Partners • Baring PE Asia • Bridgepoint • The Carlyle Group • Coller Capital • Debevoise & Plimpton LLP • FMO • Foundry Group • Freshfields Bruckhaus Deringer • General Atlantic • ILPA • Intermediate Capital Group • KKR Capstone • LPEQ • Maxeda • Navis Capital • Northleaf Capital • Oaktree Capital • Partners Group • Permira • Terra Firma |
| accounting for private equity investments: Investing in Private Equity Partnerships Kay Müller, 2008-06-17 Kay Müller provides insight into the monitoring activities of private equity fund investors and explores their information requirements. He analyzes the reporting of private equity fund managers, reveals information gaps and provides guidance on how to improve investor relations. |
| accounting for private equity investments: The LPA Anatomised Nigel Van Zyl, Edward Lee, 2018 |
| accounting for private equity investments: Taxation of U.S. Investment Partnerships and Hedge Funds Navendu P. Vasavada, 2010-07-13 A new, lucid approach to the formulation of accounting policies for tax reporting Unraveling the layers of complexity surrounding the formulation of accounting policies for tax reporting, Taxation of US Investment Partnerships and Hedge Funds: Accounting Policies, Tax Allocations and Performance Presentation enables your corporation to implement sound up-front accounting and tax policies in order to reduce the overall cost of CFO and legal functions within a U.S. Investment partnership. Understand the pitfalls and optimize across legitimate policies that are consistent with the IRS regulations Presents a clear roadmap for accounting, tax policies, tax filing and performance presentation for US investment partnerships and hedge funds Providing tremendous understanding to a complex topic, Taxation of US Investment Partnerships and Hedge Funds is guaranteed to demystify the inner workings of the formulation of accounting policies for tax reporting. |
| accounting for private equity investments: FRS 102 , 2015 |
| accounting for private equity investments: International Investments in Private Equity Peter Klaus Cornelius, 2011-02-17 How can private equity investors exploit investment opportunities in foreign markets? Peter Cornelius uses a proprietary database to investigate and describe private equity markets worldwide, revealing their levels of integration, their risks, and the ways that investors can mitigate those risks. In three major sections that concentrate on the risk and return profile of private equity, the growth dynamics of discrete markets and geographies, and opportunities for private equity investments, he offers hard-to-find analyses that fill knowledge gaps about foreign markets. Observing that despite the progressive dismantling of barriers investors are still home-biased, he demonstrates that a methodical approach to understanding foreign private equity markets can take advantage of the macroeconomic and structural factors that drive supply and demand dynamics in individual markets. - Foreword by Josh Lerner - Teaches readers how to investigate and analyze foreign private equity markets - Forecasts private equity investment opportunities via macroeconomic and structural factors in individual markets - Draws on data from a proprietary database covering 250 buyout and VC funds and 7,000 portfolio companies |
| accounting for private equity investments: Audits of Property and Liability Insurance Companies , 2000 |
| accounting for private equity investments: Lessons from Private Equity Any Company Can Use Orit Gadiesh, Hugh Macarthur, 2008-02-07 Private equity firms are snapping up brand-name companies and assembling portfolios that make them immense global conglomerates. They're often able to maximize investor value far more successfully than traditional public companies. How do PE firms become such powerhouses? Learn how, in Lessons from Private Equity Any Company Can Use. Bain chairman Orit Gadiesh and partner Hugh MacArthur use the concise, actionable format of a memo to lay out the five disciplines that PE firms use to attain their edge: · Invest with a thesis using a specific, appropriate 3-5-year goal · Create a blueprint for change--a road map for initiatives that will generate the most value for your company within that time frame · Measure only what matters--such as cash, key market intelligence, and critical operating data · Hire, motivate, and retain hungry managers--people who think like owners · Make equity sweat--by making cash scarce, and forcing managers to redeploy underperforming capital in productive directions This is the PE formulate for unleashing a company's true potential. |
| accounting for private equity investments: Private Equity Demystified John Gilligan, Mike Wright, 2020-11-05 Private equity has grown rapidly over the last three decades, yet largely remains poorly understood. Written in a highly accessible style, the book takes the reader through what private equity means, the different actors involved, and issues concerning sourcing, checking out, valuing, and structuring deals. |
| accounting for private equity investments: Private Equity as an Asset Class Guy Fraser-Sampson, 2010-05-17 Unfairly reviled, and much misunderstood, private equity differs from all other asset classes in various important respects, not least the way in which its fund mechanisms operate, and the way in which its returns are recorded and analysed. Sadly, high level asset allocation decisions are frequently made on the basis of prejudice and misinformation, rather than a proper appreciation of the facts. Guy Fraser-Sampson draws upon more than twenty years of experience of the private equity industry to provide a practical guide to mastering the intricacies of this highly specialist asset class. Aimed equally at investors, professionals and business school students, it starts with such fundamental questions as ’what is private equity?’ and progresses to detailed consideration of different types of private equity activity such as venture capital and buyout. Rapid and significant changes in the environment during the recent financial crisis have prompted the need for a new edition. Separate chapters have been added on growth and development capital, as well as secondary investing. Newly emergent issues are considered, such as lengthening holding periods and the possible threat of declining returns. Particular problems, such as the need to distinguish between private equity and hedge funds, are addressed. The glossary has also been expanded. In short, readers will find that this new edition takes their understanding of the asset class to new heights. Key points include: A glossary of private equity terms Venture capital Buyout Growth capital Development capital Secondary investing Understanding private equity returns Analysing funds and returns How to plan a fund investment programme Detailed discussion of industry performance figures |
| accounting for private equity investments: Guide to Hedge Funds Philip Coggan, 2011-09-20 Hedge fund managers are the new masters of the universe. The best earn more than $1 billion a year and are so sought after that they can afford to turn investor money away. The funds they run have, to some extent, established an alternative financial system, replacing banks as lenders to risky companies, acting as providers of liquidity to markets and insurers of last resort for risks such as hurricanes, and replacing pension funds and mutual funds as the most significant investors in many companies—even in some cases buying companies outright. The revised and updated second edition of this lively guide sheds much needed light on the world of hedge funds by explaining what they are, what they do, who the main players are, the regulations affecting them, the arguments as to whether they are a force for good or bad, and what the future holds for them. More people have a view about hedge funds than know about them. Philip Coggan bridges the knowledge gap in this clearly written guide. Every chapter is a goldmine of information and analysis, making it easy to learn about hedge funds. No investor, no investment adviser, no trustee, no dinner-table conversationalist should express opinions on the sector until they have read this book. —Elroy Dimson, BGI Professor of Investment Management, London Business School While much has been written about hedge fund strategies and their (occasionally spectacular) failures, we have not yet seen a general primer to help the investor understand the world of hedge funds. Philip Coggan presents us with exactly that—a well-written, succinct summary of a world we all need to understand better. —Rob Arnott, Chairman of Research Affiliates and Editor Emeritus of the Financial Analysts Journal |
| accounting for private equity investments: Private Equity Harold Kent Baker, Greg Filbeck, Halil Kiymaz, 2015 During the past few decades, private equity (PE) has attracted considerable attention from investors, practitioners, and academicians. In fact, a substantial literature on PE has emerged. PE offers benefits for institutional and private wealth management clients including diversification and enhancement of risk-adjusted returns. However, several factors such as liquidity concerns, regulatory restrictions, and the lack of transparency limit the attractiveness of some PE options to investors. The latest volume in the Financial Markets and Investments Series, Private Equity: Opportunities and Risks offers a synthesis of the theoretical and empirical literature on PE in both emerging and developed markets. Editors H. Kent Baker, Greg Filbeck, Halil Kiymaz and their co-authors examine PE and provide important insights about topics such as major types of PE (venture capital, leveraged buyouts, mezzanine capital, and distressed debt investments), how PE works, performance and measurement, uses and structure, and trends in the market. Readers can gain an in-depth understanding about PE from academics and practitioners from around the world. Private Equity: Opportunities and Risks provides a fresh look at the intriguing yet complex subject of PE. A group of experts takes readers through the core topics and issues of PE, and also examines the latest trends and cutting-edge developments in the field. The coverage extends from discussing basic concepts and their application to increasingly complex and real-world situations. This new and intriguing examination of PE is essential reading for anyone hoping to gain a better understanding of PE, from seasoned professionals to those aspiring to enter the demanding world of finance. |
| accounting for private equity investments: Private Capital Investing Roberto Ippolito, 2020-02-03 A step-by-step, comprehensive approach to private equity and private debt Private Capital Investing: The Handbook of Private Debt and Private Equity is a practical manual on investing in the two of the most common alternative asset classes (private equity and private debt) and provides a unique insight on how principal investors analyze investment opportunities. Unlike other textbooks available in the market, Private Capital Investing covers the various phases that principal investors follow when analyzing a private investment opportunity. The book combines academic rigor with the practical approach used by leading institutional investors. Chapters are filled with practical examples, Excel workbooks (downloadable from the book website), examples of legal clauses and contracts, and Q&A. Cases are referred at the end of every chapter to test the learning of the reader. Instructors will find referrals to both third-party cases or cases written by the author. • Covers analytical tools • Includes the most common methods used to structure a debt facility and a private equity transaction • Looks at the main legal aspects of a transaction • Walks readers through the different phases of a transaction from origination to closing Bridging the gap between academic study and practical application, Private Capital Investing enables the reader to be able to start working in private equity or private debt without the need for any further training. It is intended for undergraduates and MBA students, practitioners in the investment banking, consulting and private equity business with prior academic background in corporate finance and accounting. |
| accounting for private equity investments: Accounting for Investments, Volume 1 R. Venkata Subramani, 2011-11-03 The 2008 financial crisis highlighted the need for responsible corporate governance within financial institutions. The key to ensuring that adequate standards are maintained lies with effective accounting and auditing standards. Accounting for Investments: Equities, Futures and Options offers a comprehensive overview of these key financial instruments and their treatment in the accounting sector, with special reference to the regulatory requirements. The book uses the US GAAP requirements as the standard model and the IFRS variants of the same are also given. Accounting for Investments starts from the basics of each financial product and: defines the product analyses the structure of the product evaluates its advantages and disadvantages describes the different events in the trade cycle elaborates on the accounting entries related to these events. The author also explains how the entries are reflected in the general ledger accounts, thus providing a macro level picture for the reader to understand the impact of such accounting. Lucidly written and informative, Accounting for Investments is a comprehensive guide for any professional dealing with these complex products. It also provides an accessible text for technology experts who develop software and support systems for the finance industry. |
| accounting for private equity investments: Private Equity and Venture Capital in Europe Stefano Caselli, Giulia Negri, 2018-01-26 Global financial markets might seem as if they increasingly resemble each other, but a lot of peculiar aspects qualify different markets with different levels of development. Private equity investors can take advantage of these variations. Structured to provide a taxonomy of the business, Private Equity and Venture Capital in Europe, Second Edition, introduces private equity and venture capital markets while presenting new information about the core of private equity: secondary markets, private debt, PPP within private equity, crowdfunding, venture philanthropy, impact investing, and more. Every chapter has been updated, and new data, cases, examples, sections, and chapters illuminate elements unique to the European model. With the help of new pedagogical materials, this Second Edition provides marketable insights about valuation and deal-making not available elsewhere. - Covers new regulations and legal frameworks (in Europe and the US) described by data and tax rates - Features overhauled and expanded pedagogical supplements to increase the versatility of the Second Edition - Focuses on Europe - Includes balanced presentations throughout the book |
| accounting for private equity investments: The Myth of Private Equity Jeffrey C. Hooke, 2021-10-05 Once an obscure niche of the investment world, private equity has grown into a juggernaut, with consequences for a wide range of industries as well as the financial markets. Private equity funds control companies that represent trillions of dollars in assets, millions of employees, and the well-being of thousands of institutional investors and their beneficiaries. Even as the ruthlessness of some funds has made private equity a poster child for the harms of unfettered capitalism, many aspects of the industry remain opaque, hidden from the normal bounds of accountability. The Myth of Private Equity is a hard-hitting and meticulous exposé from an insider’s viewpoint. Jeffrey C. Hooke—a former private equity executive and investment banker with deep knowledge of the industry—examines the negative effects of private equity and the ways in which it has avoided scrutiny. He unravels the exaggerations that the industry has spun to its customers and the business media, scrutinizing its claims of lucrative investment returns and financial wizardry and showing the stark realities that are concealed by the funds’ self-mythologizing and penchant for secrecy. Hooke details the flaws in private equity’s investment strategies, critically examines its day-to-day operations, and reveals the broad spectrum of its enablers. A bracing and essential read for both the financial profession and the broader public, this book pulls back the curtain on one of the most controversial areas of finance. |
| accounting for private equity investments: The Performance of Private Equity Funds Ludovic Phalippou, 2010 The performance of private equity funds as reported by industry associations and previous research is overstated. A large part of performance is driven by inflated accounting valuation of ongoing investments and we find a bias toward better performing funds in the data. We find an average net-of-fees fund performance of 3% per year below that of the Samp;P 500. Adjusting for risk brings the underperformance to 6% per year. We estimate fees to be 6% per year. We discuss several misleading aspects of performance reporting and some side benefits as a first step toward an explanation. |
| accounting for private equity investments: Private Equity Douglas Cumming, 2009-12-31 A comprehensive look at the private equity arena With private equity differing from other asset classes, it requires a whole new approach for those trained in more traditional investments such as stocks and bonds. But with the right guidance, you can gain a firm understanding of everything private equity has to offer. This reliable resource provides a comprehensive view of private equity by describing the current state of research and best practices in this arena. Issues addressed include the structure of private equity funds and fundraising, the financial and real returns of private equity, and the structure of private equity investments with investees, to name a few. Discusses the role of private equity in today's financial environment Provides international perspectives on private equity Details the regulation of private equity markets Filled with in-depth insights and expert advice, this book will provide you with a better understanding of private equity structures and put you in a better position to measure and analyze their performance. |
| accounting for private equity investments: The Oxford Handbook of Private Equity Douglas Cumming, 2012-03-22 This Handbook provides a comprehensive picture of the issues surrounding the structure, governance, and performance of private equity. |
| accounting for private equity investments: Private Equity Demystified John Gilligan, Mike Wright, 2020-11-04 This book deals with risk capital provided for established firms outside the stock market, private equity, which has grown rapidly over the last three decades, yet is largely poorly understood. Although it has often been criticized in the public mind as being short termist and having adverse consequences for employment, in reality this is far from the case. Here, John Gilligan and Mike Wright dispel some of the biggest myths and misconceptions about private equity. The book provides a unique and authoritative source from a leading practitioner and academic for practitioners, policymakers, and researchers that explains in detail what private equity involves and reviews systematic evidence of what the impact of private equity has been. Written in a highly accessible style, the book takes the reader through what private equity means, the different actors involved, and issues concerning sourcing, checking out, valuing, and structuring deals. The various themes from the systematic academic evidence are highlighted in numerous summary vignettes placed alongside the text that discuss the practical aspects. The main part of the work concludes with an up-to-date discussion by the authors, informed commentators on the key issues in the lively debate about private equity. The book further contains summary tables of the academic research carried out over the past three decades across the private equity landscape including: the returns to investors, economic performance, impact on R&D and employees, and the longevity and life-cycle of private equity backed deals. |
| accounting for private equity investments: Alternative Investments CAIA Association, Hossein B. Kazemi, Keith H. Black, Donald R. Chambers, 2016-09-27 In-depth Level II exam preparation direct from the CAIA Association CAIA Level II is the official study guide for the Chartered Alternative Investment Analyst professional examination, and an authoritative guide to working in the alternative investment sphere. Written by the makers of the exam, this book provides in-depth guidance through the entire exam agenda; the Level II strategies are the same as Level I, but this time you'll review them through the lens of risk management and portfolio optimisation. Topics include asset allocation and portfolio oversight, style analysis, risk management, alternative asset securitisation, secondary market creation, performance and style attribution and indexing and benchmarking, with clear organisation and a logical progression that allows you to customise your preparation focus. This new third edition has been updated to align with the latest exam, and to reflect the current practices in the field. The CAIA designation was developed to provide a standardized knowledge base in the midst of explosive capital inflow into alternative investments. This book provides a single-source repository of that essential information, tailored to those preparing for the Level II exam. Measure, monitor and manage funds from a risk management perspective Delve into advanced portfolio structures and optimisation strategies Master the nuances of private equity, real assets, commodities and hedge funds Gain expert insight into preparing thoroughly for the CAIA Level II exam The CAIA Charter programme is rigorous and comprehensive, and the designation is globally recognised as the highest standard in alternative investment education. Candidates seeking thorough preparation and detailed explanations of all aspects of alternative investment need look no further than CAIA Level II. |
| accounting for private equity investments: Getting a Job in Private Equity Brian Korb, Aaron Finkel, 2008-12-03 If you're seriously considering a career in private equity, you have to become familiar with how firms hire. With Getting a Job in Private Equity, you'll gain invaluable insights that will allow you to stay one step ahead of other individuals looking to secure a position in this field. Here, you'll discover what it takes to make it in PE from different entry points, what experience is needed to set yourself up for a position, and what can be done to improve your chances of landing one of these limited opportunities. |
| accounting for private equity investments: International Convergence of Capital Measurement and Capital Standards , 2004 |
| accounting for private equity investments: The Smart Money Method Stephen Clapham, 2020-11-24 In The Smart Money Method, the stock-picking techniques used by top industry professionals are laid bare for investors. This is the inside track on how top hedge funds pick stocks and build portfolios to make outsize returns. Stephen Clapham is a retired hedge fund partner who now trains stock analysts at some of the world’s largest and most successful institutional investors. He explains step-by-step his research process for picking stocks and testing their market-beating potential. His methodology provides the tools and techniques to research new stock ideas, as well as maintain and eventually sell an investment. From testing your thesis and making investment decisions, to managing your portfolio and deciding when to buy and sell, The Smart Money Method covers everything you need to know to avoid common pitfalls and invest with confidence. Unique insight is presented in several specific areas, including how to: • Find stock ideas • Assess the quality of any business • Judge management’s ability • Identify shady accounting and avoid dying companies • Value any business to find bargain shares • Navigate the consequences of COVID-19 And throughout, there are real-life investing examples and war stories from a 25-year career in stock markets. The message is clear – you can beat the market. To do so, you need to learn and apply the insider secrets contained within this book. |
| accounting for private equity investments: Raising Capital for Private Equity Funds Heather M. Stone, 2009 Raising Capital for Private Equity Funds is an authoritative, insiders perspective on key strategies for raising private equity capital in a changing legal environment. |
| accounting for private equity investments: Private Equity Demystified John Gilligan, Mike Wright, 2020-11-04 This book deals with risk capital provided for established firms outside the stock market, private equity, which has grown rapidly over the last three decades, yet is largely poorly understood. Although it has often been criticized in the public mind as being short termist and having adverse consequences for employment, in reality this is far from the case. Here, John Gilligan and Mike Wright dispel some of the biggest myths and misconceptions about private equity. The book provides a unique and authoritative source from a leading practitioner and academic for practitioners, policymakers, and researchers that explains in detail what private equity involves and reviews systematic evidence of what the impact of private equity has been. Written in a highly accessible style, the book takes the reader through what private equity means, the different actors involved, and issues concerning sourcing, checking out, valuing, and structuring deals. The various themes from the systematic academic evidence are highlighted in numerous summary vignettes placed alongside the text that discuss the practical aspects. The main part of the work concludes with an up-to-date discussion by the authors, informed commentators on the key issues in the lively debate about private equity. The book further contains summary tables of the academic research carried out over the past three decades across the private equity landscape including: the returns to investors, economic performance, impact on R&D and employees, and the longevity and life-cycle of private equity backed deals. |
| accounting for private equity investments: "Replicating Private Equity with Value Investing, Homemade Leverage, and Hold-to-Maturity Accounting". A Paper Discussion Tim Niklas Buchholz, 2022-05-13 Studienarbeit aus dem Jahr 2021 im Fachbereich BWL - Investition und Finanzierung, Note: 1,0, FOM Essen, Hochschule für Oekonomie & Management gemeinnützige GmbH, Hochschulleitung Essen früher Fachhochschule, Sprache: Deutsch, Abstract: Gemeinhin wird angenommen, dass die professionelle und aktive Verwaltung von Private Equity-Anlagen viele Vorteile gegenüber der passiven Kapitalanlage in börsennotierten Wertpapieren aufweist. Private Equity-Fonds erheben dabei geschätzte Gebühren in höhe von 3,5 bis 5 Prozent p. a. Die Managementgebühren erfordern dabei eine Anlagestrategie, welche deutlich überdurchschnittliche risikobereinigte Renditen erzielt. Ebenfalls sollte diese nicht trivial am öffentlichen Kapitalmarkt repliziert werden können, d. h. diese muss alleingestellt gegenüber passiven Investmentstrategien existieren. Andernfalls kann die Gebührenstruktur nicht gerechtfertigt werden, da die passive Anlage grundsätzlich weniger laufende Kosten erzeugt und zeitgleich freier handelbar ist als Beteiligungen an Private-Equity-Fonds. Hieraus ergibt sich die Frage, ob die Replikation von Private-Equity-Anlagen mit Hilfe einer passiven Anlage am öffentlichen Kapitalmarkt möglich ist. Zusätzlich ist die Frage zu klären, ob diese eine ernstzunehmende Alternative, insbesondere im Hinblick auf die risikobereinigte Rendite sowie die Gebührenstruktur, darstellt. Die abgeleitete Frage aus der erläuterten Problemstellung wird dabei anhand des Papers von Erik Stafford mit dem Titel „Replicating Private Equity with Value Investing, Homemade Leverage, and Hold-to-Maturity Accounting“ beantwortet und durch Hinzunahme weiterer wissenschaftlicher Ausführungen diskutiert. Zunächst wird hierzu das Paper kurz zusammengefasst und im Anschluss die ökonomische Relevanz der Fragestellung dargelegt. Anschließend wird die Datengrundlage präsentiert und dessen Ergebnisse zusammengefasst dargelegt. Schlussendlich wird eine kritische Würdigung vorgenommen. |
| accounting for private equity investments: Private Capital Florin Vasvari, Eli Talmor, 2019-12-02 The growth of private capital has been astounding, leading to an unprecedented increase in the capital allocation by institutional investors and family offices around the world. It has also led to an expansion to other types of assets such as infrastructure, real estate and private credit, and subsequently to its rebranding as private capital. The two-volume book provides a comprehensive overview of the main topics in private capital. This volume is devoted to fund level aspects: private capital as an asset class, fund structuring, types, performance measurement, fundraising, fund due diligence, accounting and reporting, governance, administration and tax considerations. It also covers risk management, ESG as well as special classes of funds: secondaries, credit, real estate, infrastructure and natural resources. Professors Talmor and Vasvari combine academic rigor and real world cutting edge experience to provide an insightful and detailed description of private equity today. This is a most valuable contribution to the academia, the industry, and business in general.- Henry R. Kravis, Co-Founder, Co-Chairman and Co-CEO of KKR If I were to encapsulate in a single place all that I have learned in more than thirty years of international private equity investing, I could not have come close to doing as good a job as Professors Eli Talmor and Florin Vasvari have done in their new two-volume book on this subject. For anyone interested in learning about the complications, as well as the potential rewards involved in this type of investing, I highly recommend Private Capital. - David M. Rubenstein, Co-Founder and Co-Executive Chairman of The Carlyle Group Professors Talmor and Vasvari provide a rigorous and comprehensive treatment of private equity, including a look at important developments in the private capital market not covered in-depth elsewhere.- Stephen A. Schwarzman, Co-Founder, Chairman and CEO of The Blackstone Group Professor Talmor and Professor Vasvari's book provides a comprehensive analysis and practical guide to the expanding world of private capital. Integrating a review of best business practice with academic insight and rigour, this text is an excellent handbook for anyone interested in this exciting asset class, whether they are a student or an experienced professional.- Helen Steers, Head of Europe, Pantheon |
| accounting for private equity investments: Pratt's Guide to Private Equity and Venture Capital Sources, 2021 Edition Dan Gunner, 2021-03-31 |
| accounting for private equity investments: Investment Banks, Hedge Funds, and Private Equity David P. Stowell, 2012-09-01 The dynamic environment of investment banks, hedge funds, and private equity firms comes to life in David Stowell's introduction to the ways they challenge and sustain each other. Capturing their reshaped business plans in the wake of the 2007-2009 global meltdown, his book reveals their key functions, compensation systems, unique roles in wealth creation and risk management, and epic battles for investor funds and corporate influence. Its combination of perspectives—drawn from his industry and academic backgrounds—delivers insights that illuminate the post-2009 reinvention and acclimation processes. Through a broad view of the ways these financial institutions affect corporations, governments, and individuals, Professor Stowell shows us how and why they will continue to project their power and influence. - Emphasizes the needs for capital, sources of capital, and the process of getting capital to those who need it - Integrates into the chapters ten cases about recent transactions, along with case notes and questions - Accompanies cases with spreadsheets for readers to create their own analytical frameworks and consider choices and opportunities |
| accounting for private equity investments: Fair Value Measurements International Accounting Standards Board, 2006 |
| accounting for private equity investments: Financial Regulation in the EU Raphaël Douady, Clément Goulet, Pierre-Charles Pradier, 2017-08-29 Financial regulation has dramatically evolved and strengthened since the crisis on both sides of the Atlantic, with enhanced international coordination through the G-20 and the Financial Stability Board and, at the regional level, a definite contribution from the European Union. However the new regulatory environment has its critics, with many divergent voices arguing that over-regulation has become a root cause of our current economic stagnation. This book provides a bigger picture view of the impact and future of financial regulation in the EU, exploring the relationship between microeconomic incentives and macroeconomic growth, regulation and financial integration, and the changes required in economic policy to further European integration. Bringing together contributions from law, economics and management science, it offers readers an accessible but rigorous understanding of the current state of play of the regulatory environment, and on the future challenges. Coverage will include: • A review of the recent regulatory changes from a legal and economic perspective • Analysis of how the economic model of financial institutions and entities is impacted by the new frameworks • How to improve securitization and new instruments under MIFID II • Issues in the enhanced supervision under delegated acts for AIFMD, CRR-CRD IV and Solvency II • How long term funding can be supplied in lieu of the non-conventional monetary policies • A new architecture for a safer and more efficient European financial system Financial Regulation in the EU provides much needed clarity on the impact of new financial regulation and the future of the economy, and will prove a must have reference for all those working in, researching and affected by these changes. |
| accounting for private equity investments: Private Equity in Action Claudia Zeisberger, Michael Prahl, Bowen White, 2017-08-07 Global Best Practice in Private Equity Investing Private Equity in Action takes you on a tour of the private equity investment world through a series of case studies written by INSEAD faculty and taught at the world's leading business schools. The book is an ideal complement to Mastering Private Equity and allows readers to apply core concepts to investment targets and portfolio companies in real-life settings. The 19 cases illustrate the managerial challenges and risk-reward dynamics common to private equity investment. The case studies in this book cover the full spectrum of private equity strategies, including: Carve-outs in the US semiconductor industry (LBO) Venture investing in the Indian wine industry (VC) Investing in SMEs in the Middle East Turnaround situations in both emerging and developed markets Written with leading private equity firms and their advisors and rigorously tested in INSEAD's MBA, EMBA and executive education programmes, each case makes for a compelling read. As one of the world's leading graduate business schools, INSEAD offers a global educational experience. The cases in this volume leverage its international reach, network and connections, particularly in emerging markets. Private Equity in Action is the companion to Mastering Private Equity: Transformation via Venture Capital, Minority Investments & Buyouts, a reference for students, investors, finance professionals and business owners looking to engage with private equity firms. From deal sourcing to exit, LBOs to responsible investing, operational value creation to risk management, Mastering Private Equity systematically covers all facets of the private equity life cycle. |
| accounting for private equity investments: Private Equity Daniel Burmester, 2018-01-29 Private equity funds are often called grasshoppers or corporate raiders. Are these accusations true? Are financial investors who generally acquire non-listed companies and sell them after a few years for as much profit as possible really value destroying? In order to answer these and other questions, it is important to understand the business model of private equity funds. The aim of this book is to convey this understanding. The business model of private equity funds has been explained comprehensively and lively. Furthermore, questions like the following will be discussed: What does a private equity fund earn when selling a portfolio company? What do the investors who provide the capital earn? In the beginning, the historical developments of private equity are explained. Next, there is a comprehensive, lively, and practical explanation of the business model of private equity based on the individual stages of a private equity fund's lifecycle. All stages will be discussed, from the fundraising to the value creation methods to the successful sale of the portfolio company (exit). Later in the book, the leverage buyout valuation (LBO) model, which is used by private equity funds, is explained using a practical case study. After reviewing the case study, readers on their own should be able to build an LBO model using the main functions. |
PRIVATE EQUITY ACCOUNTING
private equity accounting unique and difficult to understand, at least at first, by accountants from outside of the asset class. This guide sets out to give the reader, in a systematic and hopefully …
Illustrative financial statements - KPMG
Private Equity, L.P. ASC 946-205-45-1 Statement of assets and liabilities (1) See guidance in ASC paragraph 505-10-45-2 to determine classification of capital contributions receivable as an
Private Equity Accounting: Critical Points All Investors Should …
Accounting perspective (Financial Statements) - Under IFRS and US GAAP, expensed through P&L and not shown as allocation of profits / gains regardless of how these are structured
AICPA Private Equity/Venture Capital Accounting and …
Chapter 1, Overview of the Private Equity and Venture Capital Industry and Its Investment Strategies Chapter 2, Fair Value and Related Concepts Chapter 3, Market Participant …
Private Equity Accounting Investor Reporting And Beyond
comprehensive guide to private equity accounting, investor reporting, valuations and performance measurement provides a complete update to reflect the latest standards and best practices, as …
Equity method investments and joint ventures - Viewpoint
Investments – Equity Method and Joint Ventures. The equity method is used to account for investments in common stock or other eligible investments by recognizing the investor’s share …
Private Equity Accounting, - pearsoncmg.com
the private equity accounting and investor reporting practitioners whose task to provide adequate reporting for the Limited Partners is very challenging, facing lack of detailed guidance and …
Illustrative financial statements: Private Equity - KPMG
Private Equity, L.P. Statement of assets and liabilities (1) See guidance in ASC paragraph 505-10-45-2 to determine classification of capital contributions receivable as an asset or as a
AICPA Accounting and Valuation Guide, - KPMG
Accounting and Valuation Guide, Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies. Section Chapters Key topics …
Private Equity Accounting, - Pearson Deutschland
Today's only advanced comprehensive guide to private equity accounting, investor reporting, valuations and performance measurement provides a complete update to reflect the latest …
Valuation of Portfolio Company Investments of Venture …
Capital and Private Equity Funds and Other Investment Companies.2 The Guide provides nonauthoritative guidance and illustrations for preparers of financial statements, independent …
PRIVATE EQUITY VALUATION
This new publication, Private Equity Valuation, expands on the first edition by: Updating valuation techniques and nuances. Incorporating the changes to fair value rules made by FASB and the …
AICPA Private Equity/Venture Capital Accounting and …
Sep 14, 2016 · • Chapter 1, Overview of the Private Equity and Venture Capital Industry and Its Investment Strategies • Chapter 2, Fair Value and Related Concepts • Chapter 3, Market …
PROPOSED VALUATION GUIDELINES - Business Valuation …
Private Equity Valuation Guidelines are intended to assist managers in their estimation of fair value and are intended to be consistent with GAAP (FASB Statement No. 157) and the AICPA …
Equity method investments and joint ventures (issued
This guide discusses the identification of investments that are subject to the equity method of accounting guidance, and the initial and subsequent accounting for those investments. It also …
Illustrative financial statements - KPMG
See Appendix A for a sample presentation of the schedule of investments for investments in private investment companies and Appendix B for an alternativepresentation of the schedule …
Working draft of the AICPA Accounting and Valuation Guide …
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 …
Illustrative financial statements - KPMG
Private equity, L.P. Statement of assets and liabilities (1) See guidance in ASC 505-10-45-2 to determine classification of capital contributions receivable as an asset or as a reduction of
Private Equity Accounting, - Pearson Deutschland
When a private equity fund invests alongside other fund investors, it is gener- ally appropriate to use enterprise value as a starting point for measuring fair value. Some auditors question this …
PRIVATE EQUITY ACCOUNTING
private equity accounting unique and difficult to understand, at least at first, by accountants from outside of the asset class. This guide sets out to give the reader, in a systematic and hopefully …
Illustrative financial statements - KPMG
Private Equity, L.P. ASC 946-205-45-1 Statement of assets and liabilities (1) See guidance in ASC paragraph 505-10-45-2 to determine classification of capital contributions receivable as an
Private Equity Accounting: Critical Points All Investors …
Accounting perspective (Financial Statements) - Under IFRS and US GAAP, expensed through P&L and not shown as allocation of profits / gains regardless of how these are structured
Private Equity - National Association of Insurance …
• A private equity (PE) firm is an investment management company that utilizes its own funds, as well as capital from additional investors to enhance or increase the value of a company; PE …
AICPA Private Equity/Venture Capital Accounting and …
Chapter 1, Overview of the Private Equity and Venture Capital Industry and Its Investment Strategies Chapter 2, Fair Value and Related Concepts Chapter 3, Market Participant …
Private Equity Accounting Investor Reporting And Beyond
comprehensive guide to private equity accounting, investor reporting, valuations and performance measurement provides a complete update to reflect the latest standards and best practices, as …
Equity method investments and joint ventures - Viewpoint
Investments – Equity Method and Joint Ventures. The equity method is used to account for investments in common stock or other eligible investments by recognizing the investor’s share …
Private Equity Accounting, - pearsoncmg.com
the private equity accounting and investor reporting practitioners whose task to provide adequate reporting for the Limited Partners is very challenging, facing lack of detailed guidance and …
Illustrative financial statements: Private Equity - KPMG
Private Equity, L.P. Statement of assets and liabilities (1) See guidance in ASC paragraph 505-10-45-2 to determine classification of capital contributions receivable as an asset or as a
AICPA Accounting and Valuation Guide, - KPMG
Accounting and Valuation Guide, Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies. Section Chapters Key topics …
Private Equity Accounting, - Pearson Deutschland
Today's only advanced comprehensive guide to private equity accounting, investor reporting, valuations and performance measurement provides a complete update to reflect the latest …
Valuation of Portfolio Company Investments of Venture …
Capital and Private Equity Funds and Other Investment Companies.2 The Guide provides nonauthoritative guidance and illustrations for preparers of financial statements, independent …
PRIVATE EQUITY VALUATION
This new publication, Private Equity Valuation, expands on the first edition by: Updating valuation techniques and nuances. Incorporating the changes to fair value rules made by FASB and the …
AICPA Private Equity/Venture Capital Accounting and …
Sep 14, 2016 · • Chapter 1, Overview of the Private Equity and Venture Capital Industry and Its Investment Strategies • Chapter 2, Fair Value and Related Concepts • Chapter 3, Market …
PROPOSED VALUATION GUIDELINES - Business Valuation …
Private Equity Valuation Guidelines are intended to assist managers in their estimation of fair value and are intended to be consistent with GAAP (FASB Statement No. 157) and the AICPA …
Equity method investments and joint ventures (issued
This guide discusses the identification of investments that are subject to the equity method of accounting guidance, and the initial and subsequent accounting for those investments. It also …
Illustrative financial statements - KPMG
See Appendix A for a sample presentation of the schedule of investments for investments in private investment companies and Appendix B for an alternativepresentation of the schedule …
Working draft of the AICPA Accounting and Valuation Guide …
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 …
Illustrative financial statements - KPMG
Private equity, L.P. Statement of assets and liabilities (1) See guidance in ASC 505-10-45-2 to determine classification of capital contributions receivable as an asset or as a reduction of
Private Equity Accounting, - Pearson Deutschland
When a private equity fund invests alongside other fund investors, it is gener- ally appropriate to use enterprise value as a starting point for measuring fair value. Some auditors question this …
