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Anonymous CFO

Does anyone know of an Excel model that computes the fair value of a preferred stock ratchet provision?

Asked on Sept. 1, 2015

ASC 815 40 (aka EITF 07-05) requires that the anti-dilution provision for down round price ratchets be fair valued and recorded as a derivative liability. Is anyone aware of an Excel model or "add in" that can perform the necessary computations?

Answers

Mark Stokes CFO • March 21, 2011

Try this: https://www.proformative.com/og/resource/general-content/anti-dilution-calculations-full-ratchet-broad-based-weighted-average-mod. Both an excel model and the references behind it.

Kirk Sprunger CFO • September 20, 2011

I am also looking for a model to compute the fair value of a down round provision in a preferred stock provision. My understanding is that this is a monti carlo simulation model requiring the use of Crystal Ball or @risk add in software.

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