Many private equity (PE) firms continue to face scrutiny on fair value measurements from their limited partners (LPs), their auditors, the IRS, and the SEC. Additionally, the Dodd-Frank Act requires many large PE funds to register with and be subject to periodic inspections by the SEC. An independent, third-party valuation ensures the integrity of the fair value measurements of PE firms to their LPs and other stakeholders.
Great American has successfully performed portfolio company investment valuations for many of our PE clients. These valuations involve determining the fair value of investments in the equity and debt instruments of privately-held enterprises. At present, there is no definitive industry-wide accepted process for valuing illiquid assets or securities and positions for which there are no “active market” quotations. However, GA applies US GAAP guidance (ASC 820, ASC 946, and ASC 825) to accurately value these types of assets, which increases transparency and reflects fair value changes.