Fair Value in Times of COVID-19
The Financial Accounting Standards Board Accounting Standards Codification (FASB ASC) defines fair value, or Topic ASC 820, as the “amount that would be received in an orderly transaction using market participant assumptions at the measurement date”. The uncertainty associated with COVD-19 and the actions taken to reduce the spread of the virus have caused extreme […]
Understanding Personal Goodwill Valuations
The Internal Revenue Service defines goodwill as “the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor”.1 Court decisions have recognized a distinction between the goodwill of a business itself and the goodwill attributable to the owners or professionals of a business, also […]
Securities and Exchange Commission Charges Florida Investment Adviser with Fraud (May 2020)
TCA Fund Management Group Corp. (“TCA”) and TCA Global Credit Fund GP, Ltd. (“GP” or “Fund”, and with TCA, “Defendants”), a Florida based registered investment adviser, was charged by the Securities and Exchange Commission (“SEC”) with fraudulently engaging in revenue recognition practices that inflated revenue and the net asset value (“NAV”).(1) TCA was compensated based […]
SEC’s New Framework Proposal for Fund Valuation Practices
The Securities and Exchange Commission (SEC) has proposed a new rule to modernize fund valuation practices. The rule clarifies how fund boards can satisfy their valuation obligations, and, according to SEC Chairman Jay Clayton, “would improve valuation practices, including oversight, thereby protecting investors”. The proposed rule would: establish requirements for determining the fair value of […]
SEC Grants No-Action Relief For The Sale of Debt Securities to Affiliates
On March 26, 2020, the SEC granted no-action relief to help open-end registered investment companies enhance liquidity and fund shareholder redemptions in light of significant securities market disruptions related to COVID-19. The relief broadly allows any Fund holding debt securities, under Rule 17a-9 as slightly modified, to be purchased by any affiliated person of the […]