2022 Year End Valuation Matters
With year-end around the corner, we have seen a significant uptick in requests from alternative investment funds with valuation needs. Many of our recent inquiries have been in connection with the following:
- Independent valuations for portfolio companies with “stale” marks (12+ months since investment was made or a subsequent round was raised).
- Many funds are anticipating auditor scrutiny of these “stale” marks, especially due to this year’s market volatility.
- Valuations of Funds’ Portfolio Companies, Debt Instruments, and/or other securities held by the funds for Q4 Reporting purposes.
- Many funds that previously valued their positions internally have decided to outsource the valuation function to CLA (i) based on their auditor recommendations to utilize an independent third-party valuation provider, and/or (ii) in order to focus their efforts elsewhere.
- Our “positive assurance” service, where we independently review assumptions, valuation methods, and conclusions to determine that a funds’ internal valuations are “reasonable.”
- Investors, auditors and administrators appreciate the independence, and it supports the audit process as we can answer auditor questions.
CLA is here to help funds follow best practice guidelines should they have any valuation needs
How we can help
CLA’s valuation professionals are experienced in helping address this valuation issue and provide peace of mind. We’ll help provide the resources you need to implement a practical plan designed specifically for your situation.
Craig Arends is a principal at CLA and is the managing principal of CLA's private equity practice. Craig brings a concentration of experience in providing accounting and transaction structuring advice for leveraged recapitalizations, purchase accounting and SEC reporting, assessing quality of earnings, and GAAP accounting. He has far-reaching experience with critiquing financial models and reviewing target companies' financial performance to identify cost reductions and/or operating efficiencies Craig has more than 30 years of experience in public accounting serving public companies, private equity groups, and companies, including a term as principal in charge of a Big Four Capital Markets Group in Moscow, Russia. He has led financial accounting due diligence projects for private equity investor groups and venture capital funds, primarily in the technology, communications, and manufacturing industries, as well as assisting with Foreign Corrupt Practice Act matters ranging from investigation of payments made, validation of compliance with corporate policies, and review of proposed transactions to ensure compliance. When not working, Craig enjoys watching any sports, but his most favorite are baseball, football and soccer.
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