SOURCE: Advantage for Analysts

November 17, 2008 14:58 ET

Advantage for Analysts® LLC Demystifies HLBV and Simplifies Tax Equity Accounting for Renewable Energy Financing

SAN FRANCISCO, CA--(Marketwire - November 17, 2008) - A recent article by Advantage for Analysts ("Advantage") in the October 2008 issue of North American Wind Power demystifies Hypothetical Liquidation at Book Value, or HLBV, the primary accounting method used for calculating book earnings for tax equity partnership deals. In the article the authors, Dennis Moritz and Rajiv Advani, describe HLBV and its relation to the rules that define a partnership structure.

The authors highlight that demystifying HLBV requires an understanding that the HLBV method and the rules that define the partnership are separate. Many practitioners believe HLBV is calculated differently for each situation when it is simply the partnership structure that is changing. The challenge, the authors note, is to create a model that calculates HLBV based on the rules from the existing partnership model. It is not unusual for modelers to spend weeks recreating the partnership logic for the HLBV calculation and introduce errors in the process.

Rajiv Advani points out, "The Advantage Partnership Solution Set offers an alternative to spreadsheets for modeling tax equity partnerships and calculating accounting book earnings. After structuring the tax equity partnership in Advantage, a standard report generates the HLBV results."

HLBV, however, is not the only method used for calculating book earnings. Dennis Moritz further comments, "Advantage can accommodate other methods as well, including the International Financial Reporting Standard, or IFRS methodology, used by firms based outside the U.S. The product has come a long way since we modeled the first PAPS structure at Babcock & Brown."

About Advantage for Analysts® LLC

Advantage for Analysts ("Advantage") provides software and services solutions for structuring, analyzing and tracking Tax Equity Partnership Flip Financings for renewable energy projects. Babcock & Brown originally developed Advantage and has been using the software since 1999 to support its asset management and investment advisory business. Advantage became an independent entity in 2004. Learn more at

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