Pluris’ analysis was very thorough and surpassed my expectations. I would not hesitate to recommend their services.
Tim Low
Forte Asset Management

Embedded Derivatives

When raising capital, companies often create securities with embedded derivatives. Sometimes, this is quite unintentional, but the resulting contract provisions still often require fair value measurements at issuance as well as quarterly updates. With our depth of valuation experience, unique and proprietary data, and capital markets expertise, Pluris is often called in to provide valuations of newly-issued securities and their embedded derivatives. Some examples:

  • Convertibles with both debt and equity characteristics.
  • Detachable warrants issued with convertible debentures or preferred shares.
  • Mismatch between functional and settlement currency, leading to derivative accounting applied to foreign companies listed in the United States.

Read our Accounting Alerts for more information on fair value accounting for embedded derivatives. If your company is required to fair value securities issued, or derivatives embedded in those securities, call us to discuss your situation and how we can help. If you are involved in a private placement (e.g., a PIPE) of securities and need to plan how the transaction will impact your financial statements post-deal, contact us as soon as possible to prepare.

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