Financial Reporting

Portfolio Valuation

A portfolio is a combination of financial assets including bonds, stocks, commodities, and cash reserves. Within a portfolio, the assets are divided into classes to balance risk and return allocation. A portfolio valuation determines the worth of all the assets, which helps investors allocate their investments more effectively.

The Purpose

Under ASC 820, private equity funds, hedge funds, pension funds, and other institutional investors are required to periodically report the values of their portfolio investments to their investors. Although many asset managers have the ability to perform this “mark to market” analysis themselves, investors, funds, and regulators commonly prefer to use an independent valuation firm to prevent the appearance of a conflict of interest.

Trigger Events

  • Periodic financial reporting
  • Retirement preparation
  • Managing hedge funds
  • Managing private equity funds
  • Managing pension funds

Scalar’s Services

Scalar’s portfolio work has included the valuations of preferred and common equity, convertible debt, floating rate municipal bonds, tangible and intangible assets, options, and complex derivatives. Scalar tailors portfolio valuation engagements to suit the needs of each client and can provide opinions in several forms; negative assurance, positive assurance, an independently concluded range of fair value, or an independently concluded fair value in the form of a single number.

Scalar can also provide the solvency opinion, fairness opinion, or purchase price allocation that initiates the recording of the asset on the balance sheet. By having Scalar perform the subsequent portfolio valuations, there is a consistent methodology, and we are already familiar with the assets, leading to a more efficient process.

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