How is HLBV calculated?

The sum of the amounts allocated to each partner during the waterfall plus the current balance of their capital account equals their HLBV balance. Changes in this balance are used to determine the changes in value of the partner’s investment over the accounting period.

What is a hypothetical liquidation?

Hypothetical Liquidation means a hypothetical series of transactions occurring on a given date, in which the Operating Partnership is liquidated and all assets of the Operating Partnership, including cash, are sold for cash equal to their Carrying Value, taking into account any adjustments thereto for such period, all …

What is the difference between 704 b and tax basis?

Section 704(b) accounts reflect a partner’s economic interest in the entity, GAAP balances report balances that comply with accounting board requirements, and tax basis balances reflect a partner’s capital balance under federal income tax principles.

What are targeted allocations?

Targeted allocations, which generally do not meet any of the safe-harbor requirements, allocate partnership items so that the partners’ ending capital accounts equal the amount the partners should receive under the partnership agreement’s specific order of distribution in liquidation, commonly called the distribution …

Where did the concept of hlbv come from?

The HLBV concept comes from guidance proposed by the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants (AICPA) in Statement of Position (SOP) Accounting for Investors’ Interests in Unconsolidated Real Estate Investments, released November 21, 2000.

What do you need to know about hlbv pro?

HLBV Pro captures and models the provisions defined in the transaction documents, which governs cash flows, IRR calculations, Flip Dates and corresponding allocation percentages, among other key parameters and calculations.

How does accounting work for a hlbv project?

Following HLBV accounting: 1 Project assets are deemed sold at their book-carrying values under a hypothetical sale scenario. 2 Liabilities are settled. 3 Remaining cash is distributed to the partners in liquidation of their interest.

Can a spreadsheet be used to calculate hlbv?

Until now, no automated HLBV software application has been available in the renewable energy marketplace that would allow analysts and portfolio managers to model and calculate HLBV. As a result, they have relied heavily on commonly used financial spreadsheet software which has proven to introduce an increase in risk and inefficiencies.

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