Private Equity & Investment Funds Knowledge Center
Explore our verified library of Private Equity & Investment Funds transactions. Every entry is reviewed for IFRS compliance and real-world accuracy by our technical accounting team.
Capital Call - LP Funding Received
Recording the receipt of called capital from Limited Partners (LPs) in response to a capital call notice issued by the General Partner (GP) to fund a new portfolio investment or fund expenses.
Capital Call - Deployment into Portfolio Investment
Recording the deployment of called capital into a new or follow-on portfolio company investment (equity purchase or loan), funded directly from LP capital call proceeds.
Management Fee - Accrual and GP Offset Against Capital Call
Accruing the periodic management fee owed to the GP and applying the standard 80% (or LPA-specified percentage) monitoring/transaction fee offset to reduce the management fee charged to LPs.
Portfolio Investment - Fair Value Mark-to-Market (Unrealized Gain)
Recording the quarterly or annual fair value adjustment on a private equity portfolio company investment under ASC 820, resulting in an unrealized gain flowing through the fund's income statement.
Portfolio Investment - Fair Value Mark-to-Market (Unrealized Loss / Write-Down)
Recording a downward fair value adjustment on a portfolio investment reflecting deteriorating company performance, market multiple compression, or credit distress.
GP/LP Distribution - Return of Capital (Pre-Carried Interest)
Recording a distribution to LPs representing a return of invested capital from a portfolio company exit or recapitalization proceeds, before any carried interest or performance fee threshold has been met.
GP/LP Distribution - Carried Interest (Performance Fee) via Waterfall
Recording the GP's carried interest distribution after LPs have received their full capital return and preferred return (hurdle rate), representing the GP's 20% (or LPA-specified) profit share on investment gains.
GP Clawback Obligation - Accrual of Contingent Liability
Recognizing a contingent clawback liability for the GP when early carried interest distributions may need to be returned to LPs due to subsequent underperforming investments causing the overall fund IRR to fall below the preferred return hurdle.
Subscription Credit Facility - Drawdown to Fund Investment
Recording a drawdown on the fund's subscription credit facility (a short-term credit line secured by LP unfunded commitments) used to fund a portfolio investment before a formal capital call is issued to LPs.
Portfolio Company Exit - Realized Gain Recognition
Recording the full disposal of a portfolio company investment (via M&A sale, IPO secondary, or recapitalization), recognizing the realized gain as the difference between total exit proceeds and the investment's cost basis.
Fund Formation - Organizational Costs Capitalized
Recording legal, registration, and structuring costs incurred during the formation of a new private equity fund prior to the first closing.
Fund Formation - Organizational Costs Amortization (Monthly)
Recording the monthly amortization of capitalized fund organizational costs over the elected amortization period.
Placement Agent Fee - Fund Raise Commission
Recording the placement agent fee paid to third-party capital raisers upon closing of LP commitments, typically 1%–2% of committed capital raised.
First Closing - LP Commitment Register & Equalization
Recording the equalization payment required from LPs joining at a subsequent closing to place them on equal economic footing with LPs from the first closing, including interest on prior capital calls.
LP Default on Capital Call - Defaulting LP Penalty
Recording the accounting treatment when an LP fails to fund a capital call by the due date, triggering default provisions under the LPA including penalty interest and potential forfeiture of LP interest.
LP Default - Non-Defaulting LP Shortfall Funding
Recording the additional capital call issued to non-defaulting LPs to cover the shortfall created by a defaulting LP, as permitted under the LPA.
Recycled Capital - Reinvestment of Returned Proceeds
Recording the reinvestment of early exit proceeds or dividend recap proceeds back into new portfolio investments within the investment period, as permitted by the LPA recycling provision.
Broken Deal Costs - Failed Transaction Expense
Expensing due diligence, legal, and advisory costs incurred on a potential portfolio investment that did not close (broken deal / aborted transaction).
Fund Operating Expenses - Audit, Legal & Fund Administration
Recording recurring fund-level operating expenses including annual audit fees, fund counsel legal fees, fund administrator fees, and D&O insurance premiums.
Preferred Return (Hurdle Rate) - Quarterly Accrual
Accruing the LP preferred return (typically 8% per annum) on contributed and uncalled capital for purposes of tracking the hurdle threshold that must be cleared before the GP earns carried interest.
Management Fee - Step-Down After Investment Period Ends
Recording the reduction in management fee basis when the fund transitions from the investment period (fee on committed capital) to the post-investment period (fee on invested/cost basis of remaining portfolio).
Management Fee Waiver - GP Co-Investment Reduction
Recording the reduction of management fees when the GP elects to waive fees in exchange for a profits interest or co-investment right, a common tax-efficient structuring technique.
Subscription Credit Facility - Repayment via LP Capital Call
Recording the repayment of the subscription line of credit using proceeds from the LP capital call that was issued to fund the facility repayment.
NAV-Based Credit Facility - Drawdown for LP Liquidity
Recording a drawdown on a NAV-based credit facility (secured against the fair value of the fund's portfolio rather than unfunded LP commitments) used to provide LP liquidity or fund follow-on investments in a mature fund.
GP Management Company - Management Fee Revenue Recognition
Recording management fee revenue at the GP management company level (separate entity from the fund), when the management company receives the net management fee from the fund it manages.
Co-Investment - LP Direct Participation Alongside Fund
Recording the fund's investment in a portfolio company where LPs are also investing directly alongside the fund (co-investment), and the fund books only its own allocated portion.
Co-Investment Vehicle - No Fee / No Carry Structure Setup
Recording the initial LP capital contribution into a standalone co-investment special purpose vehicle (SPV) that charges zero management fee and zero carried interest, investing alongside the main fund.
Side Pocket - Segregation of Illiquid / Special Asset
Recording the transfer of a portfolio investment into a side pocket structure to ring-fence an illiquid or hard-to-value asset from the main fund's liquid portfolio, preventing unfair dilution for incoming and exiting investors.
LP Interest Transfer (Secondary) - Seller's Accounting
Recording the sale of an LP's interest in the fund to a secondary buyer, from the perspective of the fund recognizing the transfer and updating the LP register.
GP-Led Secondary Restructuring - Continuation Fund
Recording the transfer of select portfolio assets from an existing fund into a new continuation vehicle (GP-led secondary), where existing LPs can cash out or roll into the new vehicle.
Direct Lending - Unitranche Loan Investment (BDC / Credit Fund)
Recording the origination of a unitranche senior secured loan to a middle-market portfolio company by a credit-focused PE fund or Business Development Company (BDC).
PIK Interest - Payment-in-Kind Interest Income Accrual
Accruing PIK (Payment-in-Kind) interest on a portfolio company loan where interest is added to the principal balance rather than paid in cash, increasing the loan's face amount.
Mezzanine Debt Investment - Warrant Coverage Bifurcation
Recording a mezzanine loan investment where the fund receives equity warrants as additional compensation (kicker), requiring bifurcation of the proceeds between the debt and warrant components.
Preferred Equity Investment - Accrued PIK Dividends
Recording the quarterly accrual of cumulative PIK dividends on a preferred equity investment in a portfolio company, increasing the liquidation preference and recorded investment value.
Dividend Recapitalization - Proceeds Received by Fund
Recording the receipt of a special dividend from a portfolio company funded by new third-party debt at the portfolio company level (dividend recapitalization), returning capital to the fund without a full exit.
Blocker Corporation - Setup for Tax-Exempt and Foreign LPs
Recording the capitalization of a blocker corporation (C-Corp) interposed between the fund and a portfolio company to shield tax-exempt LPs (pension funds, endowments) and foreign LPs from UBTI and FDAP income.
Blocker Corporation - Corporate Income Tax Accrual
Recording the corporate income tax accrual at the blocker corporation level on operating income (interest, dividends, capital gains) earned from the portfolio investment held by the blocker.
Foreign LP Withholding Tax - FIRPTA / FDAP Distribution
Recording the withholding of US federal tax on distributions to foreign LPs under FIRPTA (Foreign Investment in Real Property Tax Act) or FDAP (Fixed, Determinable, Annual, Periodic income) rules.
Fund of Funds - Investment in Underlying PE Fund
Recording an investment made by a fund of funds (FoF) vehicle into an underlying PE fund as a Limited Partner, with look-through treatment for financial reporting.
Fund of Funds - Double Fee Layer Accrual and Disclosure
Recording the FoF-level management fee and carried interest in addition to the underlying fund fees, representing the 'double fee' layer borne by FoF investors.
Distressed Debt Investment - Purchase at Discount to Par
Recording the purchase of a distressed portfolio company's debt securities at a significant discount to face value (e.g., 40 cents on the dollar) with intent to either recover par through restructuring or convert to equity.
Distressed - Debt-to-Equity Conversion in Restructuring
Recording the conversion of distressed debt holdings into equity of the reorganized portfolio company pursuant to a Chapter 11 plan of reorganization or out-of-court restructuring.
Portfolio Company - Full Write-Off (Total Loss)
Recording the complete write-off of a portfolio company investment to zero upon bankruptcy filing, liquidation, or determination that the investment has no remaining recoverable value.
Currency Hedging - FX Forward to Hedge EUR-Denominated Investment
Recording a forward foreign exchange contract entered into by the fund to hedge the USD/EUR currency risk on a European portfolio company investment denominated in Euros.
Foreign Currency Translation - EUR Investment Remeasurement
Recording the foreign currency translation adjustment on a EUR-denominated portfolio company investment when converting to the fund's USD functional currency at period end.
In-Kind Distribution - Public Stock Distribution to LPs (Post-IPO)
Recording the distribution of publicly traded shares (received via IPO lock-up expiration of a portfolio company) directly to LPs in-kind rather than selling and distributing cash.
M&A Exit - Escrow Holdback Receivable (Rep & Warranty)
Recording the portion of M&A exit proceeds held in escrow pending satisfaction of representations and warranties, recorded as a contingent receivable at estimated fair value.
M&A Exit - Escrow Release (Full or Partial)
Recording the release of M&A escrow proceeds upon expiration of the rep & warranty period, with recognition of the difference between estimated and actual amounts received.
M&A Exit - Earnout Payment Received (Contingent Consideration)
Recording the receipt of an earnout payment from the acquirer of a portfolio company, triggered when the portfolio company achieves agreed post-closing performance milestones.
Carried Interest Vehicle - Allocation to GP Carry Pool
Recording the carried interest allocation to the separate GP carry vehicle (or carry pool) at the fund level, representing the GP's accrued economic entitlement to future profits distributions.
GP Commitment - General Partner's Own Capital Contribution
Recording the GP's mandatory co-investment (typically 1%–3% of total fund commitments) contributed alongside LP capital to align incentives, known as the GP commitment or 'skin in the game'.
Portfolio Company - Follow-On Investment (Add-On Acquisition)
Recording a follow-on capital contribution to a portfolio company to fund its acquisition of a smaller add-on company (buy-and-build strategy), increasing the fund's cost basis.
Cross-Fund Investment - Co-Investment Between Two Funds (Same GP)
Recording an investment made jointly by Fund III and Fund IV managed by the same GP in the same portfolio company, requiring careful allocation of investment terms and conflicts of interest documentation.
Bridge Financing - Short-Term Loan to Portfolio Company
Recording a short-term bridge loan extended by the PE fund directly to a portfolio company to cover an immediate capital need (e.g., pending closing of permanent financing or a capital call).
Distribution Recall - LP Distribution Recalled for Reinvestment
Recording the recall of a previously distributed amount from LPs to fund a new investment, as permitted by the LPA's distribution recall provision (typically limited to return of capital distributions only).
NAV Calculation - Quarterly LP Capital Account Statement
Recording all components of the quarterly NAV calculation that flows into each LP's capital account statement, including investment fair value changes, income, expenses, and distributions.
ILPA Fee Reporting - Standardized Fee & Expense Disclosure
Preparing the ILPA (Institutional Limited Partners Association) standardized fee and expense reporting template disclosure, reconciling all fees from the fund to the GP management company and portfolio companies.
Fund Performance Metrics - DPI, RVPI, TVPI, and IRR Calculation
Calculating and recording the standard PE fund performance metrics: DPI (Distributions to Paid-In), RVPI (Residual Value to Paid-In), TVPI (Total Value to Paid-In), and Net IRR for LP reporting.
Credit Fund - Broadly Syndicated Leveraged Loan (Level 2 Fair Value)
Recording the mark-to-market fair value adjustment on a broadly syndicated leveraged loan held by a credit-focused PE fund, using observable market prices (Level 2 under ASC 820).
Venture Capital - SAFE Note Investment (Simple Agreement for Future Equity)
Recording an investment in a SAFE (Simple Agreement for Future Equity) note issued by an early-stage portfolio company, which converts to equity upon a qualifying financing round or exit.
Venture Capital - SAFE Note Conversion to Preferred Equity
Recording the conversion of a SAFE note into Series A Preferred Stock upon a qualifying priced round, at the SAFE's conversion terms (valuation cap or discount to round price, whichever is more favorable).
Infrastructure Fund - Revenue-Producing Asset (Toll Road / Utility)
Recording the investment in a revenue-producing infrastructure asset (toll road, airport, utility) and the recognition of operating distribution income received from the asset.
Infrastructure Fund - Operating Distribution Income from Asset
Recording the periodic operating distributions received from an infrastructure portfolio asset (e.g., quarterly dividend from a utility concession company), classified as investment income.
Real Assets Fund - Oil & Gas Investment Depletion Allowance
Recording the depletion allowance on an oil and gas mineral rights or working interest investment held by a natural resources PE fund, reducing the investment's carrying value as reserves are extracted.
Investment Period End - Unused Commitment Write-Back to LPs
Recording the permanent reduction of unfunded LP commitments at the end of the investment period when the GP elects not to call remaining uncommitted capital, releasing LPs from their funding obligation.
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