Complex Financial Instruments
- Fair Value estimates have been increasing their reliance on complex valuation methods normally reserved for banks and quantitative hedge funds. While many models are available, most are more applicable to marketable securities. Fair Value accounting deals with securities of private companies, sometimes embedded within a larger contract.
- Sorbus concentrates on the valuation of complex financial instruments in the context of a comprehensive Fair Value accounting. We value financial instruments as part of broader private company capital structure, in coordination with purchase accounting, as an embedded derivative or in a stand-alone contract. Our methods scale with the needs of each assignment, from simple discounting to algorithmic simulations supported by proprietary programming and/or specialized third-party solutions.
We thrive on building consultative partnerships with clients. Beyond providing accurate opinions of value, Sorbus helps clients achieve comfort with and understanding of valuation approaches in the context of tax and financial reporting requirements. We help define valuation project scope and timelines, manage all aspects of execution, and take a “hands-on” approach during audit reviews.
Our services cover the following securities:
- Equity derivatives, embedded or stand-alone
- Debt securities, i.e. amortizable, convertible, redeemable
- Contingent claims
- Structured cash flow instruments, i.e. P2P notes
- Forward contracts, swaps, caps and floors