Recognition Of Partnership Values On PFS

[Bryan Hancock]

I was wondering what method folks use to value their in-process partnerships on deals they're working on when they submit their PFS to lenders. Things have become quite complicated to account for lately with all of the projects I have going so I have begun reporting a range of net worth values. My accountant gave me some pointers on this, but these items obviously aren't GAAP perfect or anything. I am reporting:

1. Contributed equity to project as the "conservative value" that falls in line with the rest of my PFS

2. An average of contributed equity and recognition of full pro rata value as an "intermediate valuation"

3. Recognition of full pro rata value as an "aggressive valuation"

Ideally the pro rata value would be cash contributed as a percentage of overall project costs, but our projects have long lead times with city delays so I have tried to recognize things based more on project duration, which seems more accurate and fairer.

Any thoughts or comments? What method do you use? Getting perfect statements for each submission to a lender would be quite expensive so I was wondering if other people have used similar methods or perhaps something that is better.