The AICPA’s Private Equity and Venture Capital Task Force (the “Task Force”) along with the Financial Reporting Executive Committee released the final publication of the accounting and valuation guide, Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies (“the VC and PE Guide”) in August 2019.

The VC and PE Guide provides guidance for investment companies and their advisors, including, but not limited to, company management, boards of directors, valuation specialists and independent auditors. It includes examples and case studies illustrating leading practices, which were developed by the Task Force related to the valuation of illiquid investments by investment companies within the scope of FASB ASC 946, Financial Services—Investment Companies. The VC and PE Guide is not authoritative and is not meant to change any existing guidance. Rather, it is designed to help interpret and apply existing fair value concepts consistent with ASC 820, Fair Value Measurement.

The VC and PE Guide may also be useful for non-investment companies, such as corporate venture capital groups or pension funds, which make investments in similar types of portfolio companies and pursue similar strategies. However, the numerous and varied aspects of these non-investment entities were not considered or contemplated in the preparation of the VC and PE Guide.