Assets acquired to be used in research and development activities. (2019)

• Record Type: Book
• Other Names: American Institute of Certified Public Accountants, publisher.
• Contents: Introduction .01-.11 Background .02-.05 Scope .06-.09 Information Included in This Guide .10 Guide to the Guide .11 1 Overview of the Private Equity and Venture Capital Industry and Its Investment Strategies .01-.81 Introduction .01-.13 Investment Strategies and Portfolio Company Life Cycle .14-.21 Typical Fund Structures and Role of Fund Manager .22-.27 Fund Entity (Limited Partnership) — The Investment Company .22-.24 Compensation, Fund Management Fees, and Carried Interest .25-.27 Investor Base .28-.38 Defined Benefit Pension Plans .30-.31 Sovereign Wealth Funds .32 Development Finance Institutions .33 Endowment Funds .34 High-Net-Worth Individuals and Family Offices .35-.37 Funds of Funds .38 Investment Horizon and Return Considerations .39-.45 Long-Term Orientation .39-.41 Risk Tolerance .42-.45 Impact on Portfolio Company Valuations .46-.57 Planning for "Exits" .46-.48 Strategic Buyers .49-.51 Public Equity Markets and IPO .52-.57 Considerations for Early-Stage Portfolio Companies .58-.73 The Portfolio Company’s Strategy and Positioning .66 Market Opportunity .67 Product Adoption and Customer Behavior .68 Competitive Landscape and Presence of a First-to-Market Advantage .69 Regulatory Approval and Other Gating Factors to Market Access .70 Use of Subject Matter Experts and Advisers .71 Executive Management and Their Track Records .72 Macro Investment Environment for the Particular Early-Stage Portfolio Company .73 Regulatory Environment .74-.77 U.S. Securities and Other Regulation .75-.77 Business Development Companies and Small Business Investment Companies .78-.81 Business Development Companies .78 Small Business Investment Companies .79-.81 2 Fair Value and Related Concepts .01-.45 Definitions of Value .01-.06 Why Do Financial Reporting Standards Require Fair Value? .07 Fair Value Concepts — FASB ASC 820 .08-.30 Fair Value and Exit Price .08-.10 Entry or Transaction Price .11 Transaction Costs .12 Unit of Account .13 Measurement Date .14 Principal (or Most Advantageous) Market .15-.20 Active Market .21-.24 The Fair Value Hierarchy .25-.27 Market Participants .28-.30 Fair Value Concepts — SEC Matters .31-.37 Securities Valued "in Good Faith" .34-.37 Other Relevant Nonauthoritative Guidance .38-.45 AICPA Accounting and Valuation Guide Valuation of Privately-Held-Company Equity Securities Issued as Compensation .38 AICPA Technical Questions and Answers .39-.41 Other Industry Guidance .42-.45 3 Market Participant Assumptions .01-.24 Introduction .01-.03 Market Participant Considerations .04-.06 Required Rate of Return .07-.12 Relevance of Observable Transactions in Developing Market Participant Assumptions .13 Consideration of Future Conditions .14-.16 Considering Whether Investors’ Interests are Aligned .17-.22 Types of Information Typically Considered .23-.24 4 Determining the Unit of Account and the Assumed Transaction for Measuring the Fair Value of Investments .01-.155 Introduction .01-.03 Relevant Technical Guidance .04-.12 Grouping Assets for Measuring Fair Value .13-.16 Time Horizon for the Investment .17-.24 Implications of the Initial Transaction for Determining the Grouping of Assets in the Assumed Exit Transaction .25-.30 Examples .31-.154 Example 1: 100% of equity held within a single fund (single reporting entity) .32-.56 Example 2: 45% of equity held in each of two funds managed by the same GP .57-.63 Example 3: Club deal, 30% of equity held in each of three funds managed by different GPs .64-.67 Example 4: 100% of equity in a reporting entity with a significant deferred tax asset .68-.73 Example 5: Debt and 100% of equity held within a single fund (single reporting entity) .74-.78 Example 6: Debt and 100% of equity held within different funds .79-.100 Example 7: Repurchased debt and 100% of equity in a single fund .101-.109 Example 8: Debt investment with options or warrants .110-.135 Example 9: Distressed equity investment with options or warrants .136-.146 Example 10: Multiple investments in different classes of equity .147-.154 Summary .155 5 Overview of Valuation Approaches .01-.109 Market Approach .06-.09 Considerations in Applying the Guideline Public Company Method .10-.45 Identification of Guideline Public Companies .11-.17 Number of Guideline Public Companies Selected for Comparison .18 How to Calculate Multiples and Which Multiples to Use .19-.31 Adjustments to Guideline Public Company Multiples to Enhance Comparability .32-.33 Adjustments to Subject Portfolio Company Financial Data .34-.35 Elimination of Multiples That are Not Meaningful .36-.37 How to Select Multiples to Apply to the Subject Portfolio Company in the Guideline Public Company Method .38-.42 Weighting of Multiple Type .43-.44 Enterprise Versus Equity-Level Multiples .45 Considerations in Applying the Guideline Company Transactions Method .46-.55 Limitations on Availability of Data .47 Assessing Relevant Time Period for Guideline Company Transactions .48 Number of Guideline Company Transactions Selected for Comparison .49 How to Select Multiples to Apply to the Subject Portfolio Company in the Guideline Company Transactions Method .50-.51 Transactions in the Portfolio Company’s Instruments .52-.55 Income Approach .56-.94 Significant Assumptions of the Income Approach .70-.90 Income and Market Approach Summary .91 Milestone-Driven Valuations .92-.94 Asset Approach .95-.109 Significant Assumptions of the Asset Approach .104-.109 6 Valuation of Debt Instruments .01-.32 Fair Value of Debt Instruments (When Debt is the Unit of Account) .05-.19 Value of Debt for the Purpose of Valuing Equity .20-.32 7 Valuation of Equity Interests in Simple Capital Structures .01-.11 8 Valuation of Equity Interests in Complex Capital Structures .01-.79 Rights Associated with Preferred Stock .09-.13 Methods of Estimating the Fair Value of Multiple Classes of Equity .14 Overall Comments Applicable to All Four Methods for Valuing Equity Interests .15-.17 Considerations Affecting the Selection of a Method for Valuing Equity Interests in Complex Capital Structures .18-.79 Scenario-Based Methods .20-.36 The Option Pricing Method .37-.53 The Current Value Method .54-.59 Hybrid Methods .60-.66 Considerations in Selecting a Methodology for Valuing Equity Interests .67-.79 9 Control and Marketability .01-.34 Controlling Versus Minority Interests .04-.23 Marketable Versus Nonmarketable Interests .24-.32 Assessing Discounts or Premiums Via Calibration .33-.34 10 Calibration .01-.47 Introduction .01-.04 Valuation Implications of Observed Transactions .05-.09 Applying Calibration in Valuing a Debt Investment in a Business .10-.12 Applying Calibration in Valuing an Equity Investment in a Business .13-.25 Market Approach .13-.18 Income Approach .19-.25 Relevance of Calibration as Time Passes .26-.27 Implications of Calibration When Considering Theoretical Discounts or Premiums Associated with Control and Marketability .28-.30 Inferring Value From Transactions in a Portfolio Company’s Instruments .31-.43 Consistency with Other Valuations Performed for the Portfolio Company .44-.47 11 Backtesting .01-.101 Introduction
• Publisher Details: Place of publication not identified : Wiley
• Publication Date: 2019
• Extent: 1 online resource (688 pages)
• Subjects: 657.72; Assets (Accounting) -- Management -- Evaluation
• Languages: English
• ISBNs: 9781948306638
• Access Rights: Legal Deposit; Only available on premises controlled by the deposit library and to one user at any one time; The Legal Deposit Libraries (Non-Print Works) Regulations (UK).
• Access Usage: Restricted: Printing from this resource is governed by The Legal Deposit Libraries (Non-Print Works) Regulations (UK) and UK copyright law currently in force.