Staff from the U.S. Securities and Exchange Commission’s Office of the Chief Accountant and Division of Investment Management issued reminders on fair value measurement, investor disclosures and audit evidence for private assets, with a particular focus on private credit. The statement applies to all registrants with private credit exposure and responds to the asset class’s growing scale and valuation complexity. Private credit holdings in registered fund portfolios rose nearly 60% from USD 170 billion in December 2020 to USD 270 billion in December 2025. Management remains responsible for estimating fair value despite gaps or delays in borrower information. Valuations should reflect market participant assumptions, incorporate reasonably available market data and use calibration to assess whether models remain consistent with current conditions. For material Level 3 measurements, disclosures should be entity specific and explain valuation techniques, significant unobservable inputs and measurement uncertainty. Investors may also need information on restructurings, extensions, nonaccrual assets and payment in kind interest to assess asset quality, credit risk and the sustainability of reported income. The statement also addresses the optional use of net asset value as a practical expedient for private fund interests. Management should assess and document whether each investment meets the relevant criteria using all reasonably available information, including investee controls, market developments and secondary market data. Auditors should apply professional skepticism, reassess risks as conditions change and obtain persuasive evidence supporting management’s methods, assumptions, data and use of investee reported net asset values.
2026-09-28U.S. Securities & Exchange Commission
U.S. Securities and Exchange Commission staff reinforces private asset valuation and disclosure expectations amid 60% growth in registered funds’ private credit holdings
U.S. Securities and Exchange Commission staff reminded registrants and auditors to apply rigorous valuation, disclosure and audit practices to private assets, particularly private credit. Management should use market based assumptions, maintain robust calibration and provide tailored disclosures on valuation uncertainty and portfolio risks. The statement also calls for evidence based assessments of net asset value measurements and persuasive audit evidence.