Buzz Archive:
Pluris FAS 157 Handbook for Private Equity (March 2007)

by Espen Robak, CFA, President, Pluris Valuation Advisors LLC, 3/25/2008

FAS 157 has already become a game-changer for VCs, PE funds, hedge funds, public and private companies. The new standard provides the most rigorous requirements yet for how to value private or illiquid securities. The Financial Accounting Standards Board has come decisively down on the side of mark-to-market. No longer can funds rely on cost - or even the most recent round - and still be sure to survive auditor scrutiny. Further, "standard" illiquidity discounts for private or illiquid securities such as restricted stock, warrants, convertibles or other PIPE securities are no longer allowed: more research and data will be required.

How much extra work will be required? Will outside valuation consultants always be required? Are blockage discounts really eliminated? Want to learn more about FAS 157 and how it will impact your business? Espen Robak, CFA, of Pluris Valuation Advisors LLC has produced a FAS 157 handbook.