In a recent webinar held on March 18, Ross Hostetter, Managing Director in the Portfolio Valuation practice, discussed how CFOs should treat their December 31, 2019 financials in light of the COVID-19 pandemic. Ross notes that the last 12-month results won’t reflect what’s happening now, and “everyone will be clamoring to determine what the future looks like.” But “in the heat of the moment, in trying to get your evaluations done with the time that we have, I would just caution on making too many changes to the financial results, at the risk of then hitting the results again with a decreased multiple or increased discount rates” later.
David Larsen, Managing Director in the Portfolio Valuation practice, also stressed that fair value is defined by a price a seller could receive using market assumptions at the time of the mark, but in an orderly transaction, not a fire sale.
Both Ross and David’s insights were featured Private Funds CFO.
