The calculation of the net worth of L.A.’s wealthiest residents is a difficult task for the reporters and editors of the Los Angeles Business Journal. This year the particular challenge arose from claims by some that their net worth rebounded strongly based on investments in distressed debt or real estate.

The paper starts by identifying a group of candidates who appeared on past lists, almost made the list or who might be wealthy enough to make it. Individuals are sent a questionnaire asking for details on holdings in stock, property, investment and debt. Some billionaires deny our request and ask to be removed from our list. Others are responsive and provide detailed information on holdings – some on the record, some off.

Reporters then go through a detailed process of identifying and valuing holdings. For those that disclose holdings, valuations are double checked to make sure that candidates are not overvalued or undervalued holdings and that debt is included.

Individuals who hold at least 5 percent of stock in public companies are required to disclose their holdings to the Securities and Exchange Commission. For privately held wealth, estimates are made based on valuations of comparable public companies. We also rely on expert opinions from wealth managers, real estate brokers or others with specific knowledge of an industry.

Once a net worth figure is calculated and biographical information compiled, reporters follow up with candidates or designated assistants to verify the results. Many of the final numbers are very accurate, but it is difficult to obtain more than an estimate for a minority who have private holdings and refuse to cooperate in the process.