Financial Reporting
Your SPV Owns One Position and No Information Rights. You Still Owe a December 31 Mark.
A single-asset SPV with no information rights still owes a fair value mark. What ASC 820, accrued carry and the 5% look-through rule require by December 31.
By 409.AI Team - 2026-10-06
# Your SPV Owns One Position and No Information Rights. You Still Owe a December 31 Mark.
You raised a $4 million special purpose vehicle in early 2024 to put twenty-five LPs into a single late-stage AI company. One wire out, one line on the cap table, no board seat, no information rights, and a side letter that says the company will share what it chooses to share. Since then you have received two press releases and a holiday card.
Now it's December, your administrator wants the year-end NAV, and your auditor wants to know how you got it. The honest answer, that nobody will tell you anything, is not an accounting policy.
The SEC staff said as much in September. In their [Statement on Fair Value Measurement and Disclosure Considerations for Private Assets](https://www.sec.gov/newsroom/speeches-statements/hohl-daley-statement-fair-value-measurement-disclosure-considerations-private-assets-092806), published September 28, 2026, Chief Accountant Kurt Hohl and Division of Investment Management Director Brian Daly wrote that "a lack of timely information does not relieve management of its responsibility to estimate fair value." The statement was aimed largely at private credit, but that sentence travels. We covered [what the full statement asks of fund managers](https://409.ai/articles/sec-staff-statement-private-asset-fair-value-calibration-nav) when it landed. This piece is about the structure the statement never mentions by name and that now carries an enormous share of venture exposure: the single-asset SPV.
The SPV is not a line item. It's an entity with its own books.
Managers who run SPVs out of a spreadsheet tend to think of them as a pass-through. Money in, shares held, money out at exit. That framing survives right up until the first audit, and then it stops.
An SPV that holds investments for capital appreciation and manages them on a fair value basis has the fundamental characteristics of an investment company under ASC 946. What it often lacks are the typical ones. It holds a single investment rather than several. Sometimes it has a single investor. The codification anticipates exactly this: the absence of one or more typical characteristics doesn't disqualify an entity, but it does force you to apply judgment, document the conclusion, and live with it consistently. We walked through [the two-tier investment company test and the statements that follow from it](https://409.ai/articles/asc-946-investment-company-venture-fund-financial-statements) in more detail, and the test matters here because its answer decides whether your SPV carries the position at fair value every period or not at all.
Assume it does. Two separate measurement questions open up, and conflating them is the most common error in SPV reporting.
The first is what the shares are worth. The second is what an LP's interest in the SPV is worth. They are not the same number, and the gap between them is usually wider than people expect.
Marking the shares when the company tells you nothing
Start with the position itself. Under ASC 820 the measurement objective doesn't move because your information is thin: you still need the price a market participant would pay at the measurement date. Thin information changes your inputs and your uncertainty, not your obligation.
Most SPV positions land squarely in Level 3, where [a single significant unobservable input pulls the whole measurement down the hierarchy](https://409.ai/articles/asc-820-level-3-classification-significant-unobservable-input). So the question becomes what evidence you actually have, ranked by how much weight it can bear.
A priced primary round is the strongest evidence, with a caveat most SPV managers skip. If the company closed a Series E in May at $74.00 per share, that's the price of Series E, not the price of your Series D. A new senior class sits above you in the waterfall and usually carries its own liquidation preference and protections. Pushing $74.00 onto your Series D shares overstates the mark. Running [a backsolve through an option pricing model](https://409.ai/articles/409a-allocation-methods-opm-pwerm-backsolve) to allocate the implied equity value across the stack is the technique that produces a defensible per-class number.
Secondary prints are the next tier, and they need reading. Brokered quotes for a hot private name are often for common stock, often subject to a company right of first refusal that may never clear, and increasingly they're quotes for units in somebody else's SPV, which means the price embeds a layer of fees and carry that has nothing to do with the underlying share. A print at $58 in a structure with a 2% fee and 20% carry is not evidence that a share is worth $58. Strip the wrapper before you use the number. [What a secondary transaction does and doesn't prove about value](https://409.ai/articles/tender-offers-secondary-sales-409a-valuation) applies the same way to a fund's mark as it does to a company's own valuation.
The company's 409A is the tier people misuse most. If a portfolio company shares its 409A report with you, remember what you're reading: a common stock conclusion, prepared for a tax purpose, typically carrying a marketability discount that a fund marking preferred shares has no business inheriting. [The 409A number and fair value under ASC 820 answer different questions](https://409.ai/articles/409a-valuation-vs-fair-market-value), and an auditor who sees one copied into the other will ask why.
Then there's calibration, which the SEC statement treats as the discipline that holds all of this together. The staff reiterated that when later measurement relies on unobservable inputs, ASC 820 requires management to calibrate the technique so that the result equals the transaction price at initial recognition. For an SPV, this is simple to do and simple to skip. Your entry was $40.00 per share in March 2024. Whatever model you're running at December 31, 2026, it should have reproduced $40.00 on day one. If it can't, the model is telling you something before the auditor does.
The second number: what your LP actually owns
Suppose the work above lands the Series D at $66.50 per share. The SPV holds 100,000 shares, so the gross position is $6,650,000 against a $4,000,000 cost.
That is not the number your LPs own. The SPV charges 20% carry on gains, and at the measurement date the manager's accrued incentive allocation on a $2,650,000 unrealized gain is $530,000. Net assets attributable to the LPs are $6,120,000. An investor who funded $400,000, a 10% interest, owns $612,000 of NAV rather than the $665,000 their pro-rata share of the gross position would suggest. Eight percent of the position's value sits on the GP's side of the ledger, and it belongs there in the accounts the moment the gain exists, not at distribution.
Fund managers who hold SPV interests rather than running them should read that paragraph twice, because it's the number that flows into their own financial statements.
If you're the fund holding the SPV interest
A fund that owns an LP interest in an SPV faces its own measurement decision, and the NAV practical expedient is where most of them land by habit. The expedient lets you use the investee's NAV per share without adjustment, which is convenient and narrower than it looks. The investee has to be an investment company under ASC 946, its NAV has to be calculated consistently with Topic 946 measurement principles, and the expedient is unavailable if it's probable at your measurement date that you'll sell the interest for something other than NAV.
That last condition has teeth in 2026. If you've been shown a bid for your SPV interest, or you're running a process on it, the expedient is off the table for that position.
Electing the expedient also changes how the investment appears. [PwC's guidance on NAV measurement](https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/financial_statement_/financial_statement___18_US/chapter_20_fair_valu_US/204_net_asset_value_US.html) is explicit that investments measured at NAV as a practical expedient aren't categorized in the fair value hierarchy at all, a change [FASB made in ASU 2015-07](https://storage.fasb.org/ASU%202015-07_2.pdf). Your Level 1, 2 and 3 totals won't tie to the balance sheet, so the statements need a reconciliation showing the NAV-measured amount separately, plus the ASC 820-10-50-6A disclosures covering strategy, unfunded commitments, redemption terms and restrictions.
One more requirement catches funds off guard. ASC 946-210-50-9 requires a nonregistered investment partnership to look through its investee funds: where your proportional share of an investment held by an investee exceeds 5% of your net assets, that underlying investment has to be named and categorized, either inside the condensed schedule of investments or in a note to it. Three SPVs into the same AI company, each individually small, can easily cross that line in aggregate. The company's name ends up in your schedule of investments whether or not you ever held its shares directly.
What the auditor is going to test
Not your conclusion first. Your process.
Expect questions about who prepared the mark and who reviewed it, what evidence was in the file at the measurement date rather than assembled in March, whether the model calibrates to entry, how the class-level allocation was done, and whether the accrued carry was calculated as of the reporting date rather than rolled forward from last year. For positions where the information is genuinely stale, expect to be asked what you did about it, which is a different question from what you knew. Requesting updated financials and being refused is a documented fact. Not asking is a control gap.
This is the point where [a written valuation policy earns its keep](https://409.ai/articles/fund-valuation-policy-asc-820-audit-sec-exam). An SPV manager with one position and no policy improvises a methodology under deadline pressure, and improvised methodology is what gets reperformed. A policy that already says how a senior round is allocated across classes, how secondary prints are weighted and adjusted, and what happens when information goes stale turns December into execution rather than invention.
Before year-end
Pull your entry price and confirm your current technique reproduces it. Write down, with dates, every piece of evidence you have on the company from the last twelve months, including the requests that went unanswered. Decide the per-class allocation before you decide the number, not after. Compute accrued carry at the measurement date so the LP-level NAV is the one that hits the capital statements. And if you hold SPV interests in your fund, check whether the look-through threshold has quietly been crossed.
[Marking a private position under ASC 820](https://409.ai/articles/asc-820-level-3-fair-value-fund-portfolio-valuation) was never about certainty. It's about producing a number a reasonable person could rebuild from your file. A single-asset SPV with no information rights makes that harder, and it does not make it optional. When the company won't talk to you, that file is the whole defence, and [ASC 820 portfolio valuation](https://409.ai/products/asc-820) is the work of building it.