Complex Securities Valuation


Innovative structures like earn-outs, convertible debt, and equity-based derivatives are common strategies companies use to optimize their risk-reward metrics. Valuation and accounting for such structures are often complex and subject to regulatory scrutiny. A holistic approach that provides valuation and technical accounting solutions is needed to address various audit, reporting, and tax requirements.

Companies have been increasingly using innovative structures to optimize the risk-reward metrics in their transactions, leading to the growing use of complex instruments like earn-outs, structured debt and equity-based derivatives and such combinations.

While these instruments have emerged as a powerful tool in corporate transaction strategy, the accounting and valuation of such complex securities pose a major challenge and often have unexpected financing reporting implications.

Our complex securities specialists have been at the forefront; offering clients comprehensive and integrated solutions for analysing, valuing and accounting on a broad range of complex securities.

Our team of professionals are well equipped to provide transparent and independent valuation solutions, fully supported by a detailed narrative report suitable for review by independent auditors, the SEC, and the IRS.

Our experience includes providing valuation services for financial reporting, tax compliance and management planning purposes, and covers the following:

  • Contingent consideration
  • Convertible/hybrid securities
  • Corporate guarantees
  • Employee stock options
  • Embedded derivatives
  • Warrants
  • Interest rate swaps
  • Forward agreements
  • Structured products (e.g., CDOs, CLOs, ABS and RMBS)
  • Non-controlling interests
  • Interest rate derivatives

How is KNAV delivering Above & Beyond?

KNAV understands the unique structures and curated models and facilitates reasonable and supportable values. Our experienced team provides efficient solutions and reasonable fair value reporting for complex financial instruments.

Our Team

Faisal Lakhani

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