TY  - UNPD
A1  - Ferreira, Petrus
A1  - Kräussl, Roman
A1  - Landsman, Wayne R.
A1  - Nykyforovych, Maria
A1  - Pope, Peter
T1  - Reliability and relevance of fair values : private equity investments and investee fundamentals
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 593
N2  - We directly test the reliability and relevance of fair values reported by listed private equity firms (LPEs), where the unit of account for fair value measurement attribute (FVM) is an investment stake in an individual investee company. FVMs are observable for multiple investment stakes, fair values are economically important, and granular data on investee economic fundamentals that should underpin fair values are available in public disclosures. We find that LPE fund managers determine valuations based on accounting-based fundamentals—equity book value and net income—that are in line with those investors derive for listed companies. Additionally, our findings suggest that LPE fund managers apply a lower valuation weight to investee net income if direct market inputs are unobservable during investment value estimation. We interpret these findings as evidence that LPE fund managers do not appear mechanically to apply market valuation weights for publicly traded investees when determining valuations of non-listed. We also document that the judgments that LPE fund managers apply when determining investee valuations appear to be perceived as reliable by their investors.
T3  - CFS working paper series - 593 
Y1  - 2018
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/46933
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-469338
UR  - https://www.ifk-cfs.de/fileadmin/downloads/publications/wp/2018/CFS_WP_593.pdf
IS  - April 2018
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -