Complex financial instruments
RSM helps you get accurate valuation of your complex financial instruments (CFIs)
Complex financial instruments (CFIs) have distinctive features that need to be considered when valuing security. And determining their true value is difficult. Valuation involves a significant number of assumptions and the application of selected financial models. If these assumptions are not aligned with your perspective, or if the model cannot fully capture the instrument’s complexities, the valuation conclusion may be incorrect, and the asset or liability in question may not be valued appropriately.
RSM’s valuation team includes professionals with backgrounds in quantitative finance, mathematics, and coding to ensure we meet the needs of our clients. We understand Monte Carlo simulations, lattice models, code-based solutions, and OPM—the options pricing model. Our consistent and inclusive approach to valuation helps you understand the impact of each security’s features on the value of the overall instrument.
Financial instrument and compensation capabilities
RSM provides accounting and valuation services for the entire spectrum of complex financial instruments and equity-based compensation awards.
- Stock options, restricted stock awards, restricted stock units and profits interest awards
- Complex long-term incentive plans for executives
- Modification of awards
- Tender offers and secondary market sales
- Valuation of equity-based compensation awards
- Equity allocation in complex structures and profits interests
- New credit agreements
- Convertible note issuances
- Debt modifications/refinancings
- Debt restructurings
- Valuation of embedded derivatives at issuance and subsequent mark-to-market (MTM) valuations
- Valuation of debt pre- and post-modification/restructuring
- Valuation of overall debt instrument (fair value method) at issuance and subsequent MTM valuations
- Valuation of loan guarantees
- Preferred stock issuances
- Warrants
- Private investments in public equity
- Simple agreements for future equity
- Equity restructurings
- Noncontrolling interests
- Contingent consideration (earnouts)
- Valuations of embedded derivatives at issuance and subsequent MTM valuations (if needed)
- Valuation of equity instrument if the fair value option is elected or the instrument is accounted for as a liability (under ASC 480 or ASC 815)
- Implementations and assessments of hedging strategies related to interest rate, foreign exchange and commodity price risk
- Establishment and maintenance of hedge accounting programs for cash flow, fair value and net investment hedges under ASC 815
- Hedge effectiveness testing before implementation and at subsequent periods
- Fair value of over-the-counter derivatives
- Credit valuation adjustment at inception and subsequent periods
- Consolidation assessments for investments under ASC 810
- Accounting for debt investments under ASC 310/ASC 320 and equity investments under ASC 321/ASC 323, including impairment
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