The AICPA has published a set of free technical practice aids that offer nonauthoritative implementation guidance to FASB’s Accounting Standards Update 2009-12, Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). These entities, often called alternative investments, include hedge, private equity and real estate funds.
The FASB rule allows an investor, as a practical expedient, to estimate the fair value of an alternative investment on the basis of its net asset value if certain criteria are met. It is effective for reporting periods ending after Dec. 15, 2009.
Technical Practice Aids sections 2200.18–.27 cover a series of issues related to the FASB rule, such as determining whether net asset value calculation is consistent with the FASB Codification Topic Financial Services—–Investment Companies, determining whether an adjustment to net asset value is necessary and certain disclosure considerations.