Illustrative financial statements - KPMG

Il ustrative financial statements

Private equity funds

September 2016

The information contained in these illustrative financial statements is of a general nature relating only to private investment companies only and is not intended to address the circumstances of any particular entity. The form and content of financial statements are the responsibility of the specific entity's management. These illustrative financial statements: (a) are intended to provide general information on applying accounting principles generally accepted in the United States of America effective as of September 30, 2016, and do not include all possible disclosures that may be required for private investment companies; (b) are not intended to be a substitute for management's review of applicable law or accounting standards or for professional judgment as to the adequacy of disclosures and fairness of presentation; and (c) are being provided with the understanding that the information contained herein should not be construed as legal, accounting, tax, or other professional advice or services and that no one should act on any information contained herein without the appropriate professional advice provided in connection with the entity's particular situation. Although we endeavor to provide accurate and timely information, there can also be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Certain information contained in these illustrative financial statements may be superseded as new guidance or interpretations are issued. Financial statement preparers and other users of these illustrative financial statements are therefore cautioned to stay informed of, and carefully evaluate, subsequent authoritative and interpretative guidance.

? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 584120

Table of contents

Private equity, L.P.

1

Statement of assets and liabilities.........................................................................3

Schedule of investments.......................................................................................4

Statement of operations........................................................................................6

Statement of changes in partners' capital.............................................................7

Statement of cash flows.......................................................................................8

Notes to financial statements................................................................................9

Appendix

27

Appendix A: Investments in private investment companies...............................31

Appendix B: Alternative presentation..................................................................36

Appendix C: Adoption of ASU 2015-07...............................................................41

? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 584120

Private equity, L.P.

? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 584120

Please refer to the conditions of use on the inside cover of this publication.

? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 584120

Private equity, L.P.

Statement of assets and liabilities

December 31, 20XX

Assets Investments, at fair value (cost $649,396,000) Cash and cash equivalents Interest and dividends receivable Due from related parties Escrow proceeds receivable Capital contributions receivable (1) Other assets

Total assets

Liabilities Management fee payable Capital distributions payable Notes payable Accrued expenses and other liabilities

Total liabilities

Partners' capital(2)

$ 780,640,000 8,215,000 500,000 57,000 85,000 900,000 118,000

790,515,000

2,080,000 1,050,000

100,000 45,000

3,275,000

$

787,240,000

(1) See guidance in ASC 505-10-45-2 to determine classification of capital contributions receivable as an asset or as a reduction of partners' capital.

(2) See Appendix B for alternative presentation

See accompanying notes to financial statements.

? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 584120

Private equity, L.P.

Schedule of investments (3)

December 31, 20XX

Investments, at fair value Private operating companies United States

Consumer technology (44.2% of partners' capital) Private Consumer Technology Company 1 Preferred stock, 30,000,000 shares Common stock, 10,000,000 shares Notes, X.X%, due 7/15/20XX, principal $10,000,000

Private Consumer Technology Company 2 Preferred stock, 10,000,000 shares Warrants, expires 1/31/20XX

Health care (14.9% of partners' capital) Private Health Care Company 1 Preferred stock, 7,500,000 shares Common stock, 2,000,000 shares

Private Health Care Company 2 Contingent consideration (2)

Percentage of partners'

capital

22.9% 4.2 1.5

15.2 0.4

12.7 2.2

Cost

$150,000,000 10,000,000 10,000,000

170,000,000 100,300,000

596,000 100,896,000

80,000,000 25,000,000 105,000,000

--

Total United States China

Consumer technology (5.6% of partners' capital) Private Consumer Technology Company 3 (1) Common stock, 15,000,000 shares Notes, X.X%, due 8/30/20XX, principal $5,000,000 Warrants, expires 8/25/20XX

59.1% 375,896,000

4.4

30,000,000

1.0

5,000,000

0.2

750,000

Total China Total private operating companies

5.6% 64.7%

35,750,000 411,646,000

Fair value

$180,290,000 33,000,000 12,000,000

225,290,000 120,000,000

3,000,000 123,000,000

100,000,000 17,500,000

117,500,000 100,000

465,890,000

35,000,000 8,000,000 1,250,000

44,250,000 510,140,000

(1) Private Consumer Technology Company 3 is held by JS Blocker Corp., which is wholly owned by Private equity, L.P. (2) An accounting policy election should be made as to whether contingent consideration is recognized as a financial asset measured at fair value

or treated as a gain contingency under Topic 450 Contingencies. (3) See Appendix B for alternative presentation See accompanying notes to financial statements.

? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 584120

Illustrative financial statements 4

Private equity, L.P.

Schedule of investments (continued)

December 31, 20XX

Investments, at fair value Marketable equity securities United States

Consumer technology Public Consumer Technology Company 1 Common stock, 44,000,000 shares

Percentage of partners'

capital

18.4% $

Cost

Fair value

125,000,000 $ 145,000,000

Public Consumer Technology Company 2 Common stock, 32,000,000 shares

15.9

112,750,000

125,500,000

Total marketable equity securities

34.3

237,750,000

270,500,000

Total investments, at fair value

99.0%

$ 649,396,000

$ 780,640,000

The following table illustrates one way to present investments by type:

Investments by type, at fair value Total preferred stock Total common stock Total notes Total warrants Total contingent consideration

Percentage of partners' capital

50.8% 45.1

2.5 0.6 --

Cost $ 330,300,000

302,750,000 15,000,000 1,346,000 --

Total investments, at fair value

99.0%

$ 649,396,000

Fair value $ 400,290,000

356,000,000 20,000,000 4,250,000 100,000

$ 780,640,000

See accompanying notes to financial statements.

? 2016 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. NDPPS 584120

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