SEC Officials Address Fair Value Accounting for Private Assets

Senior officials at the Securities and Exchange Commission have issued a joint statement addressing fair value measurement and disclosure considerations for private assets, signaling heightened regulatory attention to how investment funds value holdings that lack readily observable market prices.

The statement was issued by Kurt Hohl, Chief Accountant, and Brian Daly, Director of the Division of Investment Management — two of the agency's most senior figures overseeing accounting standards and fund regulation. The joint nature of the communication underscores the cross-divisional importance the SEC places on consistent and transparent valuation practices across the asset management industry.

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Fair value measurement has grown increasingly significant as private markets — including private equity, private credit, and other illiquid asset classes — have expanded dramatically in recent years. Investment funds holding such assets are required to apply judgment-intensive methodologies when estimating values, creating potential variability in reported figures and raising investor protection concerns that regulators have monitored closely.

The statement reflects broader SEC efforts to ensure that disclosures accompanying fair value estimates give investors sufficient context to assess the assumptions and risks embedded in reported figures. Funds and their auditors are expected to pay close attention to any interpretive guidance embedded in the officials' remarks, as such statements can influence examination priorities and enforcement focus.

Continue reading at Speeches and Statements for the full text of the officials' guidance.