Financial Reporting Choices of Large Private Firms

In recent years, there has been an increase in the number of firms opting to either forgo the public equity market or exit the market in favor of private financing.[1] Increasingly, financing for private firms comes from private funds, such as private equity, venture capital, and hedge funds. In 2015, private funds owned stakes in over 7,500 firms and had over $4 trillion in capital under management.[2] This amounts to a significant portion of the overall economy relative to the total U.S. market capitalization of $25 trillion.[3]

As the privately-held sector of the economy grows, the financial … Read more