The 2018 International Private Equity and Venture Capital (IPEV) Valuation Guidelines were recently published by the IPEV Board. In order to reflect changes in accounting standards and enhancements in best practice the IPEV Board continually updates the Guidelines. The most recent revision to the IPEV Guidelines prior to these changes was in 2015. Some of the notable changes that have been made include removal of Price of Recent Investment as a Valuation Technique in line with appropriate accounting standards, ‘Private Capital’ replacing the term ‘Private Equity’ to highlight the applicability of the Guidelines to various types of private investments, and further detail on valuation considerations for early-stage and debt investments.
The International Private Equity and Venture Capital Valuation Guidelines (‘Valuation Guidelines’) set out recommendations, intended to represent current best practice, on the valuation of Private Capital Investments. The term “Private Capital” is used in these Valuation Guidelines in a broad sense to include privately held (i.e., unlisted) Investments in early stage ventures, management buy-outs, management buy-ins, infrastructure, credit and similar Investments and Investments in Funds making such Investments.
These Valuation Guidelines are focused on articulating valuation best practice from a conceptual, practical, and investor reporting standpoint. Given differences in local regulation, they do not seek to fully address best practice as it relates to internal processes, controls and procedures, governance aspects, committee oversights, the experience and capabilities required of the Valuer, or the audit or review of valuations. However, where appropriate the Valuation Guidelines do provide guidance with respect to valuation process best practice as discussed in the following.
You can find the complete Valuation Guidelines through the link below.