ASC 820 | Portfolio Valuation
ASC 820 (formerly FAS 157) compliance requires private equity and venture capital (PE and VC) firms to value their portfolio companies at 'fair value'. Aranca’s portfolio valuation services help PE and VC clients to comply with ASC 820 standards' complex provisions and avoid any audit issues in their quarterly and annual reporting. Our valuation framework and processes are designed to make ASC 820 valuation hassle-free, time-bound and affordable.
Aranca’s Portfolio Valuation Approach
Compliance with ASC 820 provisions is tough because of intricacies involved in valuation and the additional burden it puts on partners’ time. At Aranca, we believe that the partners’ time is better utilized in evaluating new opportunities and helping current portfolio companies succeed, instead of grappling with ASC 820 valuation process. By partnering with Aranca, several PE and VC firms have achieved compliance with ASC 820 without the attendant headaches. Our rigorous valuation framework ensures that the valuations will withstand audit scrutiny of the highest standard, while still allowing clients enough flexibility to maintain objective control over the final reported numbers.
Aranca offers two approaches for ASC 820 compliance to suit client’s valuation requirements:
- End-to-End Solution: Aranca will assume the responsibility of coordinating with private equity firm’s portfolio companies for collecting, compiling and reviewing the relevant information and developing key assumptions for delivering the draft valuation analysis for partner review. This approach requires minimal intervention and save huge amount of time for the partners.
- Valuation Analysis: This is a cost effective option designed for especially for smaller PE and VC firms. They can collect and provide relevant information required for valuation from the portfolio companies, and engage Aranca to deliver a valuation analysis compliant with ASC 820.
Our ASC 820 valuation models are flexible and provide full visibility into the key drivers impacting the value of portfolio company and allow necessary adjustments to derive reasonable valuation results. In addition, we also provide a brief valuation note / report which documents the key valuation inputs, assumptions methods and qualitative analysis in a succinct manner for any audit review at later date.