Debt valuation methodologies for financial reporting
Debt valuation has long been a topic of debate among entities required to report fair value. Because of varied interpretations of accounting standards, methodologies for valuing debt have ranged from simply reporting the remaining principal balance to an application of complex algorithms. This wide variance in methodologies can result in inconsistent results and volatility not reflective of market conditions.
The following resources facilitate the appropriate application of valuation principles by providing a framework for measuring the fair value of debt that is rooted in a careful observation of relevant markets.
- Debt valuation applications and best practices—borrower's perspective
- Debt valuation—applications and best practices—lender's perspective [coming soon]
- Chatham Debt Management valuation best practices [coming soon]
Our featured insights
John Kjelstrom accepts the role of Chair of the NCREIF PREA Reporting Standards Council
At the NCREIF Annual Fall Conference, John Kjelstrom accepted the role of Chair of the NCREIF PREA Reporting Standards Council. Accepting from his predecessor, John Caruso, he is committed to expanding the mission of the Reporting Standards to facilitate transparency and consistency globally.
Financing Priorities 2024: Capital Markets for Corporates, Private Equity, and Real Property Investors
Join us as we examine the latest priorities and trends for navigating real estate and corporate financing. Our expert panel will explore the dynamic capital markets landscape, revealing how it may impact priorities in 2024. Through an interactive Q&A format that encourages a variety of...
Request your Q3 2023 Lending Market Overview
The purpose of this report is to present changes in lending markets across key property types for use in marking debt to market for financial reporting. The Chatham fixed- and floating-rate indices for each property type represent how coupon rates and spreads have changed. For the third quarter...
Request your Q3 2023 Average Market Credit Spreads report
Credit spreads shown are averages based on market rate conclusions for independent debt valuations conducted as of September 30, 2023. The market spread for an individual loan may vary based on property and loan characteristics, including, but not limited to, location, tenant profile, cash flow,...
Debt Valuation for Commercial Real Estate Summer 2023
In this webinar, John Kjelstrom will moderate a panel of experts (Chase Schmitt, Jaran Burt, and Heather Danchik) discussing the intersection of accounting principles, current capital markets conditions, and valuation techniques.
Transparency and consistency in real estate reporting: the GP-LP dynamic
John Kjelstrom, an active member of NCREIF and current Vice Chair of the NCREIF-PREA Reporting Standards Council, facilitated a panel discussion on transparency and consistency in real estate reporting at the recent NCREIF Spring Conference.
Market update as regulators take control of troubled banks
Since Friday, March 10, we’ve observed the distress of two banks, Silicon Valley Bank and Signature Bank, which have both been placed into FDIC receivership. The FDIC has taken the step of guaranteeing the deposits of both banks above the legislated $250K per account limit, and the Federal Reserve has demonstrated further commitment to ensuring bank liquidity by establishing the Bank Term Funding Program.