A valuer's guide to the IPEV Guidelines

• Part 1 of 4 · Principles

• Part 2 of 4 · Techniques

Fair value follows IFRS 13 and ASC 820: the price received to sell an investment at the measurement date. The 2025 edition reinforces the known or knowable test: later events count only if they were knowable at that date.

Use multiples, discounted cash flows, net assets or industry benchmarks. The price of a recent investment is no longer a default fair value but a calibration point, and techniques should be calibrated to transaction prices.

• Part 3 of 4 · Instruments

• Part 4 of 4 · Judgement

Complex instruments

Judgement, data and AI

New and expanded guidance covers venture debt, convertible loan notes, SAFEs and ASAs, and capital structures with several equity classes, using scenario-based, option pricing or hybrid methods.

Added guidance covers limited information, more frequent valuations, transaction costs, secondary transactions and ESG. AI tools may support, but never replace, professional judgement and scepticism.

■ IPEV 2025 · Preface and Section I.1 · Fair Value

Scope and the concept of Fair Value

The Guidelines set out recommended practice for valuing Private Capital Investments at Fair Value under IFRS and US GAAP. The Preface fixes scope, status and effective date; Section 1 defines Fair Value as an exit price and explains markets, tranches, consistency and the Unit of Account (Guidelines 1.1–1.7).

Scope, status and structure (Preface)

Fair Value concept (Guidelines 1.1–1.7)

Who the Guidelines serve (Preface): They cover all Private Capital, from venture capital and growth equity to buyouts, infrastructure and private credit, and apply equally to Fund-of-Funds valuing their interests in underlying Funds. They are written to be consistent with both IFRS and US GAAP fair value requirements.

Exit price (1.1): Fair Value is the price that would be received to sell an asset in an Orderly Transaction between Market Participants at the Measurement Date. It is an exit price seen through the eyes of independent, knowledgeable, able and willing buyers and sellers, not the holder's own view.

Status and precedence (Preface): The Guidelines are recommended best practice, not law. Where they conflict with legislation, regulation or the accounting standards a Fund must follow, those requirements prevail, and Fund management remains responsible for the accounting conclusions in its financial statements.

Principal or most advantageous market (1.2): Fair Value assumes a sale in the Principal Market, the one with the greatest volume and activity for the asset, or failing that the Most Advantageous Market. For a private holding this is usually a hypothetical sale to a willing Market Participant buyer.

Effective date (Preface): The 2025 edition replaces the December 2022 edition and applies to reporting periods beginning on or after 1 April 2026. Earlier adoption is encouraged, so a Fund can move to the new commentary from its next quarter-end.

Quoted prices first (1.3): Where an identical instrument trades in an Active Market, its quoted price at the Measurement Date is used exclusively. Other Valuation Techniques come in only where no such price exists for the Investment being valued.

How the document is organised (Preface): Section I holds the Guidelines with commentary, Section II gives additional application guidance on specific topics and Section III defines capitalised terms. Appendix 1 repeats the Guidelines without commentary, Appendix 2 adds background and Appendix 3 lists the changes.

Realisation assumed today (1.4): For unquoted Investments, Fair Value assumes the Investment is realised or sold at the Measurement Date, whether or not the Fund intends to sell or the business is ready for sale. This is the only Guideline whose wording changed in 2025, for clarity.

Why Fair Value matters (Introduction): Investors use reported Fair Values to monitor performance, prepare financial statements, allocate assets, select managers and set compensation. Consistent, well-evidenced estimates make results comparable across managers, vintages and strategies.

Several tranches (1.5): Where a Fund holds several securities in one Investee Company, they are valued together if a Market Participant would buy them together, and separately if each would trade on its own. The answer follows how Market Participants actually transact.

Basis, technique and inputs (Introduction): The Guidelines separate the basis of value (Fair Value), the Valuation Technique used to estimate it and the inputs fed into that technique. Keeping the three apart helps a valuer explain which judgement drives a change in value.

Consistency and change (1.6): Techniques should be applied consistently from period to period. A change is justified when circumstances change, such as a new stage of development, new markets, new or lost information or different market conditions, and the reason must be documented.

Example: A Fund owns preference shares and a shareholder loan in the same company, and a buyer would only take both. They are valued as one package. If a lender would buy the loan on its own, the loan is valued as a separate unit.

■ IPEV 2025 · Section I.2 · Principles

Principles of valuation

Section 2 turns the Fair Value concept into working rules: assess value at every Measurement Date, use current market data, think as a Market Participant, allocate Enterprise Value across the capital structure, judge prudently, calibrate to transaction prices and backtest against realisations (Guidelines 2.1–2.7).

Assessment and allocation (2.1–2.4)

Judgement, calibration, backtesting (2.5–2.7)

Every Measurement Date (2.1): Fair Value is estimated at each Measurement Date, normally each reporting date. Cost or the last round price is not carried forward by default; the Valuer must actively assess whether value has changed since the previous estimate.

Prudent, not conservative (2.5): Judgement should be prudent but free of bias; excessive caution or deliberately low values are not Fair Value. Information is used if it was known or knowable by a Market Participant at the Measurement Date.

Current data and techniques (2.2): Use Valuation Techniques suited to the nature, facts and circumstances of the Investment, applying reasonable current market data and inputs combined with Market Participant assumptions at the Measurement Date.

Lagged data and later events (2.5): Earnings at an earlier date, such as 31 March figures for a 30 June valuation, are adjusted for known trends. A transaction agreed after the Measurement Date indicates value only to the extent its conditions were knowable, with closing risk reflected.

Market Participant lens (2.3): Assumptions reflect what a buyer would pay, not the holder's intentions. The Price of a Recent Investment is not automatically Fair Value; it is used to calibrate inputs, and Fair Value will generally change from one Measurement Date to the next.

Calibration defined (2.6): Where the entry price was Fair Value, calibrate the inputs of the Valuation Technique so that it reproduces that price at entry, then update those inputs at each later Measurement Date for changes in the company and the market. Accounting standards require this.

From Enterprise Value to equity (2.4 i–iii): Estimate Enterprise Value, then adjust for surplus assets, excess liabilities, working capital, excess cash, bonuses, tax, pensions and contingencies such as ESG provisions. Deduct instruments ranking ahead of the Fund's highest-ranking instrument, as a Market Participant would.

Calibrating multiples (2.6): Compare the implied entry multiple with comparable companies and decide how the difference should evolve. The entry discount or premium is not carried forward mechanically; absolute or relative movements may be used if applied consistently.

Dilution and apportionment (2.4 iv–vi): Reflect dilution from options, warrants and management incentives to reach Attributable Enterprise Value, then apportion it between instruments by ranking and allocate it to the Fund's holdings. A Valuer may also 'step into the shoes' of a buyer of those instruments.

Calibrating income inputs (2.6): For a DCF, solve for the discount rate implied by the entry price and split it into a WACC and a company-specific premium (alpha). Reassess both at later dates, and calibrate to any more recent orderly transaction in the instrument.

Debt and preferences (2.4 commentary): Deduct debt at par or payoff if it must be repaid on a change of control, otherwise at a value reflecting its terms. Probability-weight prepayment penalties, assume in-the-money options and warrants are exercised, and review liquidation preferences.

Backtesting (2.7): When an Investment is sold, listed or refinanced, compare the exit price with earlier Fair Value estimates to learn what drove the difference, what was known or knowable, and whether the process is biased. Backtesting improves the process; it is not a hunt for mistakes.

Example: A company bought at 8x EBITDA when peers traded at 10x implies a 20% discount. If peers later trade at 15x, the Valuer considers whether the gap still applies, arriving perhaps near 12x, rather than applying the 20% automatically.

■ IPEV 2025 · Section I.3 · Techniques (part 1)

Selecting techniques, multiples and benchmarks

Guidelines 3.1 to 3.3 explain how to choose Valuation Techniques: substance over form, observable inputs first, and the three families of market, income and replacement cost approaches. Guidelines 3.4 and 3.5 then cover the most widely used technique, earnings or revenue multiples, and industry benchmarks.

Choosing a technique (3.1–3.3)

Multiples and benchmarks (3.4–3.5)

Substance over form (3.1 i): Consider the specific terms of each Investment and its economic substance, which may take precedence over its strict legal form. A preference share with debt-like returns, for example, is valued on what it actually delivers.

Applying a multiple (3.4 i–iv): Choose a multiple suited to the business, adjust maintainable earnings or revenue, apply the multiple to obtain Enterprise Value, then follow the 2.4 steps to reach the Fund's share. Keep the comparable set consistent over time.

Currency (3.1 ii): Where the Fund reports in a different currency from that of the Investment, translate the value at the bid spot exchange rate prevailing at the Measurement Date.

Matching the metric (3.4): Multiples and metrics must cover the same period and accounting basis, adjusting for differences in R&D capitalisation, lease accounting or revenue recognition. EV/EBITDA is common; a P/E multiple needs gearing similar to the comparables.

Selection factors (3.2): Weigh the stage of development, the industry and market conditions, the quality and reliability of data, the comparability of transactions and companies, the stage of the economic cycle and the techniques Market Participants actually use for that kind of business.

Revenue multiples (3.4): These are used where a company is not yet profitable or earnings are not meaningful, provided Market Participants price that way. Growth, margins and the path to profitability then drive the choice of multiple.

Maximise observable inputs (3.2): Prefer techniques that draw on observable market data and limit unobservable ones. More than one technique may be used to cross-check, and the Valuer then judges the point within the range, consistent with IFRS 13 paragraph 63.

Adjusting comparables (3.4): Adjust for differences in risk, growth, size, liquidity and control, and reconcile trading and acquisition multiples through calibration. Blockage factors are not permitted, and transaction multiples need care in dislocated markets.

Scenario-based methods (3.2): The 2025 commentary discusses scenario analysis explicitly, as a way to reflect several possible outcomes, such as an exit, a further funding round or failure, where a single forecast would hide material uncertainty.

Maintainable earnings (3.4): Remove non-recurring items, use pro forma figures for acquisitions and disposals, and include add-on acquisitions once completed. The aim is the level of earnings a buyer would capitalise at the Measurement Date.

The approach families (3.3): Market approach: multiples (3.4), industry benchmarks (3.5) and available market prices (3.6). Income approach: discounted cash flows of the business or of the Investment (3.7, 3.8). Replacement cost approach: net assets (3.9).

Industry benchmarks (3.5): Metrics such as price per bed, per subscriber or per unit of capacity are used mainly as a sanity check. They are rarely reliable enough to be the main technique, except where Market Participants genuinely price that way.

Example: A company's maintainable EBITDA is 40 after removing a one-off legal settlement of 5. At a calibrated 11x, Enterprise Value is 440; net debt of 120 leaves equity of 320, before ranking and dilution under Guideline 2.4.

■ IPEV 2025 · Section I.3 · Techniques (part 2)

Market prices, discounted cash flows and net assets

Guideline 3.6 governs quoted and other observable prices, including when a discount for restrictions is allowed. Guidelines 3.7 and 3.8 cover discounted cash flows of the business and of the Investment itself, the usual route for debt, and Guideline 3.9 covers the net assets technique.

Available market prices (3.6)

DCF and net assets (3.7–3.9)

Quoted Investments (3.6 i): Use the price within the bid-ask spread that best represents Fair Value and apply it consistently; mid-price is acceptable. Price times quantity is used even in volatile markets, and over-the-counter trading can qualify as an Active Market.

DCF of the business (3.7): Project the company's cash flows and terminal value, discount them at a risk-adjusted rate to get Enterprise Value, then allocate it under 2.4. The technique is flexible but subjective, so it is often used to corroborate a market approach.

No blockage factors (3.6 ii): A discount because the holding is large relative to daily trading volume is not permitted under IFRS or US GAAP, even if selling the whole block would move the price.

DCF of the Investment (3.8): Discount the cash flows the Fund expects from the Investment itself, such as interest, repayment or exit proceeds. Terminal values use a Gordon growth or exit-multiple method; for an imminent sale, discount the expected proceeds.

Restrictions on the security (3.6 iii): A discount is allowed only for a restriction that belongs to the security itself, such as unregistered shares, and that a buyer would inherit. Restrictions attaching to the holder, like a board seat or insider status, do not justify a discount.

Debt by yield analysis (3.8): Solve for the yield implied by the entry price, compare its spread over the risk-free rate with current benchmark spreads for similar credit, and discount the contractual cash flows at the updated yield.

Lock-ups after the FASB update (3.6 iii): Since the 2022 FASB amendment, contractual sale restrictions such as lock-ups are not reflected as discounts under US GAAP. IPEV believes IFRS practice is aligned with this view.

Par is not Fair Value (3.8): Par, amortised cost or cost is not automatically Fair Value, even if Enterprise Value comfortably covers the loan. An intention to hold the loan to maturity is irrelevant to a Fair Value estimate.

Broker quotes and pricing services (3.6 iv): Prices from brokers or pricing services may be used if the Valuer understands how they were derived, whether they are binding and contemporaneous, and how much actual trading supports them.

Convertibles and distress (3.8): Calibrate convertible debt as a debt component plus an equity option. For non-performing debt, value by reference to the collateral or to the most likely recovery cash flows.

Thin or suspended trading (3.6): If the market is not active, or trading is suspended, the quoted price may need support from other techniques, and the Valuer documents why the market is not considered active.

Net assets (3.9): Fair Value derived from the net assets of the business suits asset-intensive companies, investment holding businesses and loss-making companies whose value lies in their assets rather than their earnings.

Example: A loan priced at a 9% yield when government rates were 4% carries a 5% spread. If benchmark spreads widen by 1% and rates rise to 4.5%, the loan is revalued at a yield of about 10.5%, giving a price below par.

■ IPEV 2025 · Section I.3.10 · Recent investment

Calibrating to the Price of a Recent Investment

Guideline 3.10 explains how a recent funding round informs Fair Value without becoming a default. It covers when a transaction price is not Fair Value, complex capital structures, liquidation preferences, and the qualitative and milestone analysis on which early-stage valuations rely.

Using the round correctly

Preferences and early stage

A calibration point, not a technique (3.10): A recent round supports Fair Value at that date, with its weight depending on size, timing and whether new arm's-length investors took part. Its relevance fades as time passes and circumstances change.

Allocation methods (3.10): Options include simplified scenario analysis, relative value scenario analysis, the probability-weighted expected return method (PWERM), the option pricing model (OPM), hybrid methods, and the current value method where an exit is imminent.

When price is not Fair Value (3.10): Under ASC 820-10-30-3A and IFRS 13 B4 the transaction price may differ from Fair Value where the deal is with a related party, under duress, for a different Unit of Account or in a different market. Any day-one difference must be reconciled.

Choosing a method (3.10 a–f): Consider the stage of the company, the range and clarity of exit outcomes, the complexity of the capital structure, the data available and how Market Participants price. The current value method should not be used alone where preferences are uncertain.

Day-one gains (3.10): IFRS does not allow a day-one gain to be recognised when the measurement relies on unobservable inputs; the difference is deferred and recognised as observable evidence emerges.

Qualitative review (3.10): For early-stage companies, ask whether the business is meeting plan, burning cash faster or slower, winning or losing customers, facing new competitors, changing management, or affected by market, regulatory or technology shifts.

Not a default (3.10): Treat the round price with care if the new shares carry different rights, the round causes disproportionate dilution, the investor is strategic, market conditions changed after terms were agreed, or the round is a rescue.

Milestones (3.10): Financial milestones (revenue, margin, cash burn), technical milestones (product development, testing, approvals or patents) and commercial milestones (contracts, pilots, customers) show whether value has moved since the round.

Other share classes (3.10): The price paid for the newest class is not applied automatically to earlier or junior classes. Differences in preferences, conversion and participation rights must be reflected for each class.

Indicators of change (3.10): Performance well away from plan, covenant breaches, a new round under negotiation, litigation, fraud or the loss of key people all suggest value has changed and the round price must be adjusted.

Economic versus other rights (3.10): In complex capital structures, focus on economic rights that change cash payouts. Non-economic rights, such as board seats or information rights, rarely change the Fair Value of an instrument.

Adjusting value (3.10): Adjust the calibrated value up or down for the evidence found. A DCF of an early-stage company is mainly a cross-check, because its inputs are too uncertain to stand alone.

Example: Six months after a round at 100, a medtech company misses its regulatory milestone and burns cash faster than planned. The Valuer reduces the calibrated equity value and tests outcomes through scenarios before concluding.

■ IPEV 2025 · Section I.4 · Fund interests

Valuing interests in Funds

Section 4 helps Fund-of-Funds and other investors value their interests in underlying Private Capital Funds. The reported Net Asset Value (NAV) is the usual starting point, adjusted where needed, while secondary transactions and fund-level cash flows provide further evidence.

NAV as starting point (4.1–4.2)

Secondaries, DCF (4.3–4.4)

NAV as a starting point (4.1): Where the underlying Fund reports NAV on a Fair Value basis, that NAV is the starting point for the Fair Value of the interest, adjusted as needed for anything a Market Participant would consider.

Secondary transactions (4.3): Prices in orderly secondary sales of Fund interests are one input to consider. They may show how Market Participants view a Fund, but must be assessed for timing, size and motive.

Exceptions (4.1 i–ii): NAV is not the starting point if the interest itself is actively traded, when the quoted price applies, or if a decision has been made to sell the interest, when the expected sale price is used.

Opaque markets (4.3): Secondary prices are often not public, may include deferred payments, may reflect a seller's need for liquidity, or cover portfolios of interests sold together. These features limit their use as direct evidence.

US GAAP practical expedient (4.1): ASC 820 lets investors use NAV as a practical expedient when its conditions are met, including NAV calculated under investment company accounting. IFRS contains no equivalent, so adjustments must always be considered.

Discounts and premia (4.3): A discount or premium to NAV in a secondary sale does not mean the underlying Investments should be revalued, consistent with AICPA PE/VC Guide paragraphs 13.97 and 13.98. This commentary is new in 2025.

Non-Fair Value NAV (4.2): If the underlying manager's NAV is not based on Fair Value, or uses a different basis, adjust it to Fair Value before relying on it.

DCF of fund cash flows (4.4): A discounted cash flow of the expected calls and distributions of the Fund interest is possible but rarely used. It may help where NAV is unreliable or the Fund is near the end of its life.

Time lag (4.2): NAV often arrives months after its reference date. Roll it forward for capital calls and distributions, market movements, anticipated performance and significant events known or knowable at the Measurement Date.

Reliance on the manager (4.1): The investor remains responsible for its own Fair Value conclusion. It should understand the underlying manager's valuation process well enough to judge whether NAV is a reliable Fair Value starting point.

Fees and carry (4.2): Consider the allocation of carried interest, waived or rebated fees, clawback provisions and other features of the fund agreement that change what the investor would actually receive.

Timely reporting (4.2, 5.19): Because managers report after the Measurement Date, the Valuer of a Fund interest may need to reflect market movement, anticipated performance, cash flows and significant events since the last reported NAV.

Example: A buyer acquires a Fund interest at 85% of NAV because the seller needed cash quickly. An investor holding a similar interest does not cut its Fair Value to 85% automatically; it first assesses whether the sale was orderly.

■ IPEV 2025 · Section II · 5.1–5.10

Special situations: unit of account to contractual rights

Section II applies the principles to situations valuers meet in practice. Topics 5.1 to 5.10 cover the Unit of Account, insider and distressed transactions, dislocated markets, bridge and debt financing, rolled-up interest, indicative offers, structuring rights and contingent consideration.

Transactions and markets (5.1–5.5)

Instruments and rights (5.6–5.10)

Unit of Account (5.1): IFRS and US GAAP leave the Unit of Account to other standards. IPEV reads them as allowing the whole interest to be the unit where that is how Market Participants transact, with Enterprise Value as the usual starting point. Fund management owns the conclusion.

Debt Investments (5.6): Value debt on a standalone basis, considering risk, coupon, time to repayment and market yields. Separate attached warrants from the loan when calibrating. Par or cost is not automatically Fair Value, and credit quality must always be assessed.

Insider rounds (5.2): A round with only existing investors in proportion to their holdings may not need to be priced at Fair Value, so its reliability must be tested. An insider down round still signals a fall in value, including one done as a corporate reorganisation.

Third-party debt quotes (5.6): Reported prices may be used if the Valuer knows how they were derived, whether they are binding and contemporaneous, and what inputs were used. Prices quoted by agencies are not always executable.

Dislocated markets (5.3): Volatility does not suspend Fair Value; it is measured in the market that exists at the Measurement Date. Give extra attention to operations, cash, covenants, maintainable earnings and whether peer multiples reflect current conditions.

Rolled-up interest (5.7): For deep-discount or payment-in-kind instruments, assess the present value of the amount expected to be recovered, including step-ups. Spread any excess over cost across the instrument's life to give a constant rate of return.

Avoid double counting (5.3): If forecasts already reflect weaker results, do not also apply a multiple from peers whose figures do not yet show the downturn. Discount rates must match the risk in the cash flows; greater uncertainty generally means lower multiples.

Indicative offers (5.8): Offers may be high to open negotiations or low to exploit a forced seller, and may rest on limited information. They support but rarely establish Fair Value; more weight goes on a signed contract, adjusted for closing risk.

Sanctions and counterparties (5.3): In unsettled markets, assess the direct and indirect effect of government sanctions on investee companies and the higher counterparty risk, including whether insurance claims will actually be paid.

Structuring rights (5.9): Options, warrants, anti-dilution, ratchets, convertibles, liquidation preferences, guaranteed IRRs and follow-on commitments are reviewed each period. Assume a right is exercised if the holder gains by doing so, and consider surplus cash from exercise prices.

Distressed transactions (5.4): Signs of a non-orderly sale include a legal requirement to sell, too little time to market, a single buyer, a seller near insolvency, inadequate market exposure or an outlier price. Such prices are not Fair Value; use other techniques.

Contractual rights (5.10): Earn-outs and deferred consideration are contractual rights, not mere contingencies. Value them with a probability-weighted DCF of expected payments, analysing the factors that would cause targets to be met or missed.

Example: A Fund sells a company for 200 now plus up to 50 if revenue targets are met in two years. With a 60% chance of payment and a 12% discount rate, the earn-out right is worth about 24 (50 × 60% ÷ 1.12²).

■ IPEV 2025 · Section II · 5.11–5.20

Special situations: minority stakes to venture debt

Topics 5.11 to 5.20 deal with non-control stakes, models and scenarios, sum of the parts, transaction costs, real estate, infrastructure and sustainability, plus three topics new in 2025: limited information and co-investments, more frequent valuations, and venture debt and convertible instruments.

Holdings and asset types (5.11–5.16)

Sustainability and new topics (5.17–5.20)

Non-control stakes (5.11): Where a minority holder's interests are not aligned with the controlling shareholder, value may not be realised through a sale of the enterprise. The Market Participant is then a buyer of the minority stake, and techniques mirror how that buyer would price it.

Sustainability (5.17): ESG disclosure is outside scope, but measurable ESG factors affect Fair Value. Cash flows reflect energy, staff, supply, compliance and reporting costs; risk may change the company-specific premium; peers should share a similar ESG profile.

Minority cash flows (5.11): An income approach may discount periodic dividends or a lump sum, for example under a contracted put option. Fair Value is what a buyer would pay for the minority interest in an Orderly Transaction.

Qualitative ESG factors (5.17): Some factors, such as flood exposure of coastal sites or the likelihood of government action against a business model, cannot be quantified yet still shape what a buyer would pay. Include them to the extent they are known or knowable.

Models and scenarios (5.12): Option pricing models and PWERM are rarely used to set deal prices but can help for early-stage companies with a few discrete outcomes, such as up, flat, down or zero. Inputs are highly subjective and must be calibrated and recalibrated.

Limited information (5.18, new): The duty to measure Fair Value does not change for co-investments or thin information rights. Roll stale data forward for market moves and expected performance; a total lack of information means a buyer demands a higher return.

Sum of the parts (5.13): Where distinct divisions would be valued by Market Participants with different metrics, value each part and add them up, deciding how shared overhead costs should be allocated.

Co-investors (5.18, new): Information from the lead manager should be used, but the co-investor reaches its own Fair Value conclusion rather than automatically adopting the lead investor's mark.

Transaction costs (5.14): Costs are not a characteristic of the asset, so capitalised deal costs usually create an unrealised loss at the first valuation. Exit prices are not reduced for selling costs, although closing risk may be reflected.

More frequent valuations (5.19, new): Fair Value is required whenever reported amounts are presented as Fair Value, quarterly or more often under a regulatory regime. The same known or knowable test and the same Guidelines apply at any frequency.

Real estate (5.15): Identify the Unit of Account: the property, its debt, an equity interest or another participation. Equity is usually property value less debt as a Market Participant would value it; make sure any appraiser measures Fair Value at that unit.

Venture debt (5.20, new): Value using contractual cash flows, credit risk, market yields and optionality such as attached warrants, calibrated to the issue price and updated at each Measurement Date.

CLNs, SAFEs and ASAs (5.20, new): These convert into a future round, often at a discount or subject to a valuation cap. Understand the terms, why they were issued and realistic exit scenarios. Conversion into a fixed number of shares suits an OPM; a discount to a future round suits scenario analysis.

■ IPEV 2025 · Application, Section III and Appendix 3

Applying the Guidelines and what changed in 2025

The Introduction sets out the governance a robust valuation process needs, Section III defines the key terms, and Appendix 3 lists what the 2025 edition changed. Only one Guideline was reworded; most changes strengthen the commentary and add three new topics, while the carried interest section was removed.

Process, governance and terms

What changed in the 2025 edition

Core principles (Application): Valuers apply consistency, the Market Participant perspective, calibration and rigour to every estimate, so values are comparable over time and defensible to investors and auditors.

Only Guideline 1.4 reworded (Appendix 3): The wording on assuming realisation at the Measurement Date was clarified. All other Guidelines are unchanged in substance.

Valuation policy (Application): A written policy should set out techniques, data sources, frequency, approvals and how changes in technique are justified, and it should be applied consistently across the portfolio.

Principles commentary (Appendix 3): Commentary in 2.3 to 2.6 was enhanced on the Market Participant view, allocating Enterprise Value, known or knowable information and calibration.

Documentation (Application): Record the inputs, assumptions and judgements behind each estimate, including evidence that was considered and rejected. A good file lets a reviewer reconstruct the conclusion.

Techniques commentary (Appendix 3): New or expanded text covers scenario analysis (3.2), multiples (3.4), restrictions on securities (3.6 iii), debt and convertibles (3.8), and transaction prices, complex capital structures and liquidation preferences (3.10).

Independent oversight (Application): A valuation committee independent of deal teams, or external advisers, reviews and challenges proposed values, and Backtesting results feed back into the process.

Fund interests (Appendix 3): Commentary in 4.3 now addresses discounts and premia to NAV in secondary transactions and why they do not, by themselves, change the value of underlying Investments.

Defined terms (Section III): Capitalised words such as Fair Value, Market Participants, Orderly Transaction, Measurement Date, Enterprise Value, Attributable Enterprise Value and Backtesting carry the meanings in Section III. Use them consistently in policies and reports.

Section II updates (Appendix 3): Transaction costs (5.14) were rewritten, real estate (5.15) expanded, and sustainability (5.17) renamed and expanded. New topics cover limited information and co-investments (5.18), more frequent valuations (5.19) and venture debt and convertibles (5.20).

Marketability (Section III): Marketability is the time needed to sell. Because accounting standards assume marketing happens before the Measurement Date, no discount for Marketability is allowed in Fair Value.

Carried interest removed (Appendix 3): The former section on carried interest was deleted because it is a disclosure matter rather than a valuation matter.

Example: A manager updating its policy for 2026 adds a co-investment section based on 5.18 and a SAFE and convertible note section based on 5.20, and deletes its carried interest valuation wording to match the 2025 edition.

• Practice point 1 of 4 · Known or knowable

• Practice point 2 of 4 · Recent rounds

Record what was known or knowable at the measurement date. Later information enters the valuation only to the extent it was knowable at that date, and the file should show why.

Treat the price of a recent round as a starting point, then test it against performance, milestones and market movements since the round, and explain any adjustment.

• Practice point 3 of 4 · Capital structure

• Practice point 4 of 4 · Governance

Allocate across classes

Document the process

Where preferences, options and warrants exist, allocate enterprise value across the instruments with a suitable method rather than pro rata to the share count.

Investors and auditors expect a written valuation policy, consistent methods between periods and a clear record of judgements, including any use of AI tools.

✱ Keep learning

Read the official text, then go deeper

This guide is Valuvix’s independent summary of the 2025 IPEV Valuation Guidelines. Valuvix is not affiliated with the IPEV Board. Rely on the official Guidelines, and compare with our IFRS fair value guide and our IVS 2025 guide.