Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2025

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The Company believes the following significant accounting policies, among others, affect its more significant estimates and assumptions used in the preparation of the financial statements.

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

The Company is an investment company for U.S. GAAP purposes and follows accounting and reporting guidance in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 946 – Financial Services- Investment Companies. The Adviser has evaluated this guidance and determined that the Company meets the criteria to be classified as an investment company. The Company’s fiscal year ends on December 31.

Use of Estimates

The preparation of the financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results may ultimately differ materially from those estimates.

Consolidation

The Company generally consolidates its investments in investment companies (which included affiliated investment companies while operating as a private lending fund), which are wholly owned and controlled by the Company. If the underlying company is an operating company, consolidation is generally not appropriate. The consolidated financial statements include the accounts of the Company and its wholly owned and controlled subsidiaries after elimination of intercompany balances and transactions. The Company may utilize the subsidiaries to facilitate the investment activities or structures within the overall investment objective. The accounts of the subsidiaries are prepared for the same reporting period end as the Company using consistent accounting policies.

Segment Reporting

In accordance with ASC Topic 280 - Segment Reporting ("ASC 280"), the Company has determined that it has a single operating and reporting segment. As a result, the Company’s segment accounting policies are the same as described herein and the Company does not have any intra-segment sales and transfers of assets. The Company has an investment objective to generate both current income, and to a lesser extent, capital appreciation through debt and equity investments. The chief operating decision maker ("CODM") is comprised of the Company’s co-chief executive officers and assesses the performance and makes operating decisions of the Company on a consolidated basis primarily based on the Company’s net increase in net assets resulting from operations ("net income"). In addition to numerous other factors and metrics, the CODM utilizes net investment income as a key metric in determining the amount of dividends to be distributed to the Company’s Shareholders. As the Company’s operations comprise of a single reporting segment, the segment assets are reflected on the Consolidated Statement of Financial Condition as "Total assets" and the significant segment expenses are listed on the Consolidated Statement of Operations as "Operating Expenses".

Cash and Cash Equivalents

Cash and cash equivalents represent cash on hand, cash held in banks and liquid investments with original maturities of three months or less and money market funds that are not held for investment purposes. A portion of the Company’s cash may be swept into an overnight sweep account of the financial institution where the Company’s cash is held. Cash equivalents, other than money market funds, are carried at cost plus accrued interest, which approximates fair value. Money market funds are carried at net asset value, which approximates fair value. The Company is subject to credit risk should a financial institution be unable to fulfill its obligations. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk. As of September 30, 2025, of the $56.6 million of cash and cash equivalents on the Consolidated Statement of Financial Condition, the Company held $50.1 million in cash equivalents.

Investments at Fair Value

The Company records investment transactions on a trade date basis. Investments are recorded at fair value on the Consolidated Statement of Financial Condition and changes in the fair value of investments are reflected on the Consolidated Statement of Operations as net change in unrealized gain/(loss) on investments. Realized gain/(loss) on investments are recorded on the specific identification method. Realized gains are recognized to the extent sales proceeds exceed the cost basis. Realized losses are recognized when the cost basis exceeds sales proceeds.

The Company records its investments at fair value, in accordance with U.S. GAAP. Fair value is defined under U.S. GAAP as the expected price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See further discussion in Note 5 - "Fair Value Measurements".

The value of any investment or other asset held by the Company as of any date will be determined by the Adviser in good faith and in accordance with the principles set forth below and shall include the marked-to-market value of any hedges effected in connection with such investment, and the Adviser will determine, in its discretion, the appropriate hedge positions intended for such investment. Investment transactions will be recorded on the trade date. Realized gains or losses will be measured by the difference between the net

proceeds received (excluding prepayment fees, if any) and the amortized cost basis of the investment using the specific identification method without regard to net change in unrealized gains or losses previously recognized, and include investments charged off during the period, net of recoveries. The net change in unrealized gains or losses will primarily reflect the change in investment values, including the reversal of previously recorded unrealized gains or losses with respect to investments realized during the period.

Investments that are listed on a national securities exchange (including such investments when traded in the after hours market) will be valued at their last sales price on the date of determination on the largest securities exchange (by trading volume in such investment) on which such investments will have traded on such date. If no such sales of such investments occurred on the date of determination, such investments will be valued at the midpoint between the "bid" and the "asked" price for long positions and at the "asked" price for short positions on the largest securities exchange (by trading volume in such investment) on which such investments are traded, on the date of determination. Investments that are not listed on an exchange but are traded over-the-counter will be valued at the representative "bid" quotations if held long and at representative "asked" quotations if held short, unless included in the NASDAQ National Market System, in which case they will be valued based upon their last sales prices (if such prices are available).

Investments that are not listed on an exchange and are not traded over-the-counter but for which external pricing or valuation sources are available will be valued in accordance with such external pricing or valuation sources; provided, however, that such valuations may be adjusted by the Adviser to account for recent trading activity or other information that may not have been reflected in pricing obtained from external sources. Privately negotiated derivative investments, such as interest rate swaps, credit default swaps and various basket indices typically shall be valued at the midpoint between the "bid" and "asked" prices by third party pricing services and/or trading counterparties, or based on proprietary pricing models used by the Adviser or independent service providers.

The value of investments that are not listed on an exchange, are not traded over-the-counter and for which no third party pricing sources are available (which may include trade claims, mortgage loans, corporate loans, consumer loans, leases, property, private securities and other receivables and assets), as is expected to be the case for substantially all of our investments, will be valued at fair value as determined in good faith by (A) our Adviser, who, following the BDC Election, was appointed as the Board’s Valuation Designee (as defined in Rule 2a-5 under the 1940 Act), no less frequently than monthly and (B) by one or more independent valuation agents selected by the Adviser no less frequently than quarterly (with certain de minimis exceptions), and such valuations shall reflect any credit risk associated with such investments where deemed appropriate. When the Adviser deems it necessary or advisable, investments may be valued based on proprietary pricing models developed by the Adviser or independent valuation agents. All assets and liabilities initially will be valued in the applicable local currency and then translated into U.S. dollars using the applicable exchange rate on the date of determination.

If the Adviser determines that the value of any investments as determined pursuant to this section does not accurately reflect the fair market value of such investments, the Adviser shall value such investments as it reasonably determines. If the Adviser determines that any investment is so thinly traded that the Company would be unable to dispose of the Company’s position in such investment within a reasonable time frame at the market price, then the Company may apply a discount to the value of such investment in an amount that it, in its discretion, deems appropriate. The Adviser’s valuation committee approves final investment valuations.

Forward Foreign Currency Contracts and Other Derivative Instruments

The Company uses forward foreign currency contracts in order to manage its foreign exchange risk. Forward foreign currency contracts represent future commitments to purchase or sell currencies at a specified time. These contracts are recorded at fair value utilizing an industry standard pricing model, see further discussion below.

Net realized and net change in unrealized gain/(loss) on forward foreign currency contracts are reflected in the Consolidated Statement of Operations. The below table details the Company's reconciliation of gross to net balances expressed in thousands:


Counterparty		Gross Amounts of Recognized Assets/(Liabilities)				Gross Amounts offset in the Consolidated Statement of Financial Condition				Net Amount of Asset/(Liabilities) Presented on the Consolidated Statement of Financial Condition			Cash Collateral (Received)/Pledged			Net Amount

Bank of Nova Scotia	$		280		$		(162	)	$		118	$		-	$		118
Bank of Nova Scotia			(162	)			162				-			-			-
Total	$		118		$		-		$		118	$		-	$		118

Investments in forward foreign currency contracts subject the Company to off-balance sheet market risk, where future changes in foreign currency rates may cause the fair value to differ from the amount recognized in the Consolidated Statement of Financial Condition. The below table details the Company's current positions expressed in thousands:


Counterparty		Notional amount to be purchased			Notional amount to be sold		Settlement Date		Fair Value			Balance Sheet Location of Net Amounts
Bank of Nova Scotia	$		24	C$		33	12/29/2025	$		183		Change in net unrealized gain/(loss) on forward foreign currency contracts
Bank of Nova Scotia			28	€		24	2/2/2026			(162	)	Change in net unrealized gain/(loss) on forward foreign currency contracts
Bank of Nova Scotia			22	£		17	3/11/2026			97		Change in net unrealized gain/(loss) on forward foreign currency contracts
							Total	$		118

An unrealized gain/(loss) on derivative instruments is generally recorded based upon market changes in the underlying asset, calculated by reference to changes in specified prices or rates for a specified amount of an underlying asset or otherwise determined notional amount, adjusted for other factors such as liquidity and counterparty credit risk. A realized gain/(loss) is recognized at the reset date, if any, or at the termination of the agreement. Net realized and net change in unrealized gain/(loss) is presented on the Consolidated Statement of Operations.

Following its BDC Election, the Company complies with Rule 18f-4 under the 1940 Act, which requires BDCs that use derivatives to, among other things, comply with a value-at-risk leverage limit, adopt a derivatives risk management program, and implement certain testing and board reporting procedures. Rule 18f-4 exempts BDCs that qualify as "limited derivatives users" from the aforementioned requirements, provided that these BDCs adopt written policies and procedures that are reasonably designed to manage the BDC’s derivatives risks and comply with certain recordkeeping requirements. The Company qualifies and intends to continue to qualify as a "limited derivatives user". The Company has adopted a derivatives policy and complies with the recordkeeping requirements of Rule 18f-4.

The private warrants held by the Company and included in the Consolidated Statement of Equity are classified as equity investments not as a derivative instrument. See further discussion in Note 2 - "Summary of Significant Accounting Policies" under the "Investments" section.

Interest Income

Interest income (including paid-in-kind interest) and interest expense is recognized as earned on an accrual basis and is earned or incurred from fixed income securities, certain financing arrangements and broker balances, and includes accretion of discounts and amortization of premiums calculated using the effective yield method, where applicable. Generally, investments are placed on non-accrual status when a borrower has missed multiple payments and the Company believes future payments are doubtful. Expenses are recognized as incurred on an accrual basis.

The Company will reduce current interest income by charging off any interest receivable (or cost basis of investments in the case of paid-in-kind interest) when the collection of all or a portion of such interest becomes doubtful or where credit quality restricts the ability to reasonably estimate cash flows. Other factors such as purchase price, fair value and current market conditions are also considered when determining non-accrual status for investments. The Company does not accrete discounts or amortize premiums or recognize paid-in-kind interest on investments that are placed on non-accrual status.

As of September 30, 2025, and December 31, 2024 we had no non-accrual debt investments.

Other Income

When the Company purchases an investment, it may receive fees during the life of the investment such as commitment fees, letter of credit fees and amendment fees. The upfront fees received in connection with investments that are deemed to be an adjustment to yield are capitalized and amortized over the term of the investment. Other fees that are received, but not deemed to be an adjustment to yield may be recognized as earned and are included in other income on the Consolidated Statement of Operations. Upon prepayment of a loan or debt security, any prepayment premiums, unamortized upfront loan origination fees and unamortized discounts are recorded as interest income in the current period.

Organization and Offering Costs

The Company will bear expenses relating to the organization of the Company and the offering of its Class I common shares of beneficial interest, par value $0.01 per share (the "Shares").

Organization costs include the cost of regulatory compliance, formation, including legal fees related to the creation and organization of the Company and its organizational documents, as well as its election to be regulated as a BDC. For the avoidance of doubt, organization costs shall not include sales loads, commissions or placement agent fees. Organization costs are expensed as incurred on the Consolidated Statement of Operations.

For the three and nine months ended September 30, 2025, the Company recorded $0.2 million and $2.8 million, respectively, of organization costs in the Consolidated Statement of Operations.

Offering costs include legal, accounting, printing and other expenses associated with the preparation of a registration statement in connection with any subsequent offering of Shares. Offering costs are capitalized as deferred offering costs on the Consolidated Statement of Financial Condition and amortized to expense over a twelve-month period. For deferred offering costs incurred prior the issuance of Shares, amortization commenced upon the initial issuance of the Shares.

As of September 30, 2025, the Company recorded $0.8 million of deferred offering costs, capitalized, within the Consolidated Statement of Financial Condition. Upon the initial issuance of the Shares, the Company began amortizing the deferred offering costs over a 12 month period. As of the three and nine months ended September 30, 2025, $0.2 million of offering costs were amortized in the Consolidated Statement of Operations.

Since inception (including the three and nine months ended September 30, 2024), the Adviser has elected to pay certain organization costs under the Amended and Restated Expense Support and Conditional Reimbursement Agreement ("Expense Support Agreement"). Expense support amounts fronted by the Adviser will be subject to recoupment under to terms of the Expense Support Agreement. See discussion in Note 3 - "Related Party Transactions and Agreements" for additional disclosure on the Expense Support Agreement.

Debt Issuance and Financing Costs

Debt issuance and financing costs generally relate to lender fees and legal fees associated with the establishment of the financing vehicles consolidated by the Company. Debt issuance and financing costs also include extension fees and upfront fees on loans or revolving credit facilities held by the Company. These costs are capitalized and are amortized over the term of the financing arrangements, revolving credit and loan facilities, as applicable. The deferred debt issuance and financing costs are netted with their respective liabilities on the Consolidated Statement of Financial Condition.

Foreign Currency Translation

Assets and liabilities that are denominated in foreign currencies were translated into U.S. dollars at the closing rates of exchange on September 30, 2025. Transactions during the period are translated at the rate of exchange prevailing on the date of the transaction. The Company includes that portion of the results of operations resulting from changes in foreign exchange rates on investments in net realized and unrealized gain/(loss) on investments in the Consolidated Statement of Operations. All other foreign currency translation gain/(loss) is included in the net realized and net change unrealized foreign currency translation gain/(loss) on the Consolidated Statement of Operations.

Income Taxes

For tax periods prior to the effective date of the Company's election to be treated as a RIC under Subchapter M of the Code (such election, the "RIC Election"), the Company expects to be classified as a partnership for U.S. federal income tax purposes. As a partnership, the Company generally will not pay U.S. federal income taxes, but each of the Company’s investors will generally be required to file U.S. income tax returns and pay income taxes on the income and gains allocated to it in respect of its interest in the Company (whether or not distributed).

The Company will make a RIC Election when it files its U.S. federal income tax return for the taxable year that begins, August 1, 2025. As of that date, it is expected the Company will be treated as a RIC for U.S. federal income tax purposes. So long as the Company maintains its status as a RIC, it generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it distributes at least annually to its investors as distributions. Rather, any U.S. federal income tax liability related to amounts distributed by the Company represents obligations of the Company’s investors.

To qualify as a RIC, the Company must (among other requirements) meet certain source of income and asset diversification requirements and timely distribute to its investors at least 90% of its investment company taxable income, as defined by the Code, for each year. As of September 30, 2025, the Company was compliant with quarterly requirements.

If the Company fails to distribute in a timely manner an amount at least equal to the sum of (i) 98% of the Company’s ordinary income for the calendar year, (ii) 98.2% of the amount by which the Company’s capital gains exceed its capital losses (adjusted for certain ordinary losses) for the one-year period ending October 31 in that calendar year and (iii) certain undistributed amounts from previous years on which the Company paid no U.S. federal income tax (collectively, the "Excise Tax Distribution Requirements"), the Company will be subject to a 4% nondeductible U.S. federal excise tax on the amount by which it does not meet the Excise Tax Distribution Requirements. For this purpose, however, any ordinary income or capital gain net income retained by the Company that is subject to corporate income tax for the tax year ending in that calendar year will be considered to have been distributed by year-end (or earlier if estimated taxes are paid).

As of September 30, 2025 and December 31, 2024, the tax cost and estimated gross unrealized appreciation (depreciation) from investments for federal income tax purposes are as follows:


($ in thousands)		September 30, 2025				December 31, 2024
Tax cost	$		980,471		$		-
Gross unrealized appreciation			2,094				-
Gross unrealized depreciation			(3,295	)			-
Net unrealized investment appreciation / (depreciation) on investments	$		(1,201	)	$		-

New Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," ("ASU 2023-09"). ASU 2023-09 requires additional disaggregated disclosures on the entity’s effective tax rate reconciliation and additional details on income taxes paid. ASU 2023-09 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. The Company is currently evaluating the impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 2200-40)," ("ASU 2024-03") which requires disaggregated disclosure of certain costs and expenses, including purchases of inventory, employee compensation, depreciation, amortization and depletion, in each relevant expense caption. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption and retrospective application is permitted. The Company is currently evaluating the impact on its consolidated financial statements.

Other than the aforementioned guidance, the Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial statements.

Fortress Private Lending Fund 10-Q