Profit Interest Support in Financial Reporting - Carta Release Notes - Product Updates

Profit Interest Support in Financial Reporting

Financial Reporting will now include Profits Interest Units (PIUs) in all expense and disclosure reports.

Why is this important?

Expense accounting is crucial for private companies because it's the only way to accurately measure profitability, ensure tax compliance, make informed business decisions, and secure funding.

How does Profit Interest support in Financial Reporting works?

• New Disclosure Table: The Minimum Disclosures report will now include a new "PIUs outstanding table" if the company has PIUs. This table includes a dedicated "Repurchased" line for greater clarity.
• Partial Repurchases: When a PIU is partially repurchased, the system cancels the original security and issues a new "balance" security. The report will reflect this (e.g., one grant canceled, one new grant issued). A footnote in the "Tranches" tab confirms that expense is not double-counted.
• Fair Value Override: The report defaults to the Intrinsic Value method for PIU expense. The "Override Fair Value" is still available if there's any need to change it.

Where can I learn more about this?

• How do I use the Minimum Disclosures Report?
• Profits interests outstanding table

Eduardo Bacil Monteiro Dias