COVID-19 and the resulting financial challenges are testing the execution of valuation policies and procedures in ways that they have not been tested since the Great Recession of 2008-2009. The two primary drivers of activity are liquidity in fixed income markets and volatility in all asset classes.
KPMG Audit Partners, Sean McKee, Matt Giordano, and Kim Zavislak, provide an overview of the most important things the public investment management market should think about in terms of valuation from a management, board, and regulatory perspective.
Topics addressed include:
- current volatility factors that may challenge timely and accurate valuations
- SEC actions to protect investors, while allowing management and the capital markets to work under COVID-19 conditions
- pricing vendor considerations with respect to valuations
- the importance of communication and remaining connected across boards, management, auditors, Chief Compliance Officers, and pricing vendors to understand the stresses and pressures that each are experiencing
- importance of documentation of due diligence to support fair value estimates in an uncertain environment
- risk disclosure considerations from both registration statement and financial statement perspective.
- inputs that carry direct relevance when calculating fair value under accounting standards and securities laws
- key reminders related to the fair valuation accounting standards and prior enforcement actions.
*Earlier episodes of Talking Asset Management were produced for the KPMG Investment Management Perspectives podcast series