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 Certain information contained in these illustrative financial statements may be superseded as new guidance or interpretations are issued.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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