The assets must be valued on the merger date under the acquiring fund's valuation methodology. Consideration must be given as to how to handle any differences in valuation of assets between the acquired and acquiring funds' methods; examples include the valuation of equities at the bid price versus at the mean between the bid and asked prices, and use of different pricing agents potentially resulting in pricing differences for similar securities.

An assessment must be made as to how to value prepaid expenses and other similar assets of the acquired company. The funds should consider what value, if any, these assets have to the acquiring fund.

In certain instances, it may not be clear which of the two funds constitutes the surviving entity for financial reporting purposes. Although the larger fund would normally be considered the survivor of the merger, continuity in one or more of the following might lead to a determination that the smaller fund should be considered the survivor: (i) portfolio management, (ii) overall management and corporate governance arrangements, (iii) principal portfolio objectives and policies, and (iv) distribution arrangements.

In a 1994 no-action letter (North American Security Trust), the SEC stated that the accounting survivor in a merger between funds is not necessarily the surviving legal entity, noting that the following qualitative factors should be considered: investment adviser, investment objectives/policies, expense structure, portfolio composition, and operating environment. Relative size is important, but not the sole determinant. These criteria were adopted in the Audit Guide for the identification of the accounting survivor under GAAP. Note that, under ASC 805-10-55-12, relative voting rights post-combination is one factor to be considered in identifying the acquiring entity, but also to be considered are such factors as the composition of the combined entity’s "governing body" and senior management.

See Asset Management Advisory 2009-23 for additional information and considerations relating to fund mergers.