Financial Reporting Valuation
ASC 820 (FAS 157) Testing

For better or worse, ASC 820 has changed the way financial institutions do business.

By requiring that even illiquid assets be accounted for based on “fair market value,” it is creating a new level of transparency and accountability.

Before ASC 820 (FAS 157), hedge funds, private equity funds and other holders of illiquid assets would value them based on models that were clearly inaccurate or methodologies that made invalid assumptions. Even though the value of an asset changes continuously, for example, the institution might base the asset’s value on the price paid for the asset years ago.

But how can you determine “fair market” value when there is no readily accessible market for an asset?

ASC 820 (FAS 157) allows three levels of valuation, which are explained in Pluris’ “FAS 157 Handbook,” which is available here. It is the responsibility of the institution to value its assets at the highest level possible, based on reasonable access to data.

Pluris draws on its in-depth expertise and its access to proprietary, real-market information that is not available to other companies so that it can test your assets and ensure that they are valued in a manner that is acceptable to auditors, shareholders and anyone else who may be impacted.

For more information on our ASC 820 (FAS 157) testing services, contact Pluris today.