аЯрЁБс>ўџ 24ўџџџ1џџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџџьЅС@ №ПbjbjзІзІ 4ЕЬЕЬџџџџџџˆžžžžžžžВКККК Ц Вв ЖооооооооQ S S S S S S $ˆ Rк–w žоооооw žžооŒ œœœо žоžоQ œоQ œœ žže ов Pу˜,NЄЧКш.1 Q Ђ 0в 9 ,p|pe ВВžžžže TpžЙ ˜ооœоооооw w ВВdЄ’ ВВЯЁШБСдЦцЭј Accounting Practice Valuation of investments not traded on recognized securities markets Colleges and universities enter into arrangements, or otherwise make investments through a variety of activities, including exchanges of expertise, facilities, and other support services for equity interests in non-public companies. The value of investments that result from these activities may not be readily determinable by reference to recent purchases or sales of the equity interests. Other types of investments may result from the acquisition of assets that are expected to produce future revenue flows from the development and marketing of patent rights either purchased by, or donated to, the college or university. Investments should be recorded at cost, or fair value if donated or in exchange, upon acquisition. If cost or fair value cannot be objectively determined, the investment should not be recorded with a carrying value until that point where an objectively supportable fair value can be determined. Colleges and universities should record changes in the fair value of all investments in their annual financial statements as a component of investment income. For investments that are traded on recognized securities markets, fair value should be determined by reference to its trading value as of the Balance Sheet date. For investments that are not traded on recognized securities markets, institutions should develop alternative mechanisms for periodically valuing the individual investment holdings. The extent and nature of alternative mechanisms adopted should be consistent with the materiality of the individual investment holdings. The materiality of the current recorded value, and the potential for changes in fair value, should be considered in determining the extent or nature of efforts to determine changes in fair value from Balance Sheet date to Balance Sheet date. Potential for changes in fair value of investments would be determined by a consideration of the prospects for either highly favorable future financial results, or the potential for dramatic and significant losses. Each investment holding not traded on recognized securities markets should be reviewed on an annual basis to determine (1) that the holding continues to fall into a category of investments not traded on recognized securities markets, and (2) that the entity continues to be an operational entity with plans to continue its operations. Institutions should not perform alternative valuation procedures for individual holdings with a recorded value of less than $100,000, apart from an annual assessment that the entity is a going concern and continues in the category of investments not traded on recognized securities markets. Institutions should write-off investments in situations where there is objective information that the investment will not be realizable, for example, the entity begins bankruptcy proceedings, or ceases operations. Alternative mechanisms may include collecting financial statements of the companies in which investments are made or received, conducting interviews with company personnel to assess financial position, results, and prospects for the future, or in the case of large value assets such as patent or development rights, an appraisal done by an independent appraisal firm. Other methodologies can be used, as long as the process, and results yield a verifiable basis for a valuation, and the degree of valuation effort expended is appropriate to the size of the investment and its expected volatility in value. Each institution should review the nature and composition of its investments not traded on a recognized securities market, and develop an institutional procedure for annual valuation. 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