IPEV Valuation Guidelines

Status and current edition

The current edition was published on 11 December 2025. It supersedes the December 2022 edition and is in effect for quarterly reporting periods beginning on or after 1 April 2026, with early adoption encouraged. The 2022 edition, which applied to periods beginning on or after 1 January 2023, remains the reference for earlier periods: a quarter beginning 1 January 2026 is still a 2022-edition quarter unless the manager adopted early.

The Guidelines have no legal force of their own. Where they conflict with law, regulation or accounting standards, the latter prevail. Financial reporting standards do not require them, but the IPEV Board states that following them can achieve fair value measurements compliant with International Financial Reporting Standards (IFRS) and with US generally accepted accounting principles. The IPEV Board has an understanding with the International Valuation Standards Council aimed at consistency with the International Valuation Standards (IVS) and at positioning the Guidelines as sector-specific application guidance for them. Invest Europe's 2024 Investor Reporting Guidelines refer valuation to the IPEV Guidelines.

Structure of the document

• Section I sets out the Guidelines with explanatory comments: 1 the concept of fair value; 2 principles of valuation (allocating enterprise value, prudent judgement, calibration, backtesting); 3 valuation methods; 4 valuing fund interests.
• Section II gives application guidance for specific situations, including unit of account, insider funding rounds, distressed or dislocated markets, debt investments, real estate, infrastructure, sustainability, limited information on co-investments, more frequent valuations, and venture debt and convertible instruments.
• Section III defines terms (enterprise value, orderly transaction, market participants, net asset value and others).
• Appendices repeat the Guidelines without commentary, discuss financial reporting points (contractual restrictions, IFRS 9 and Accounting Standards Codification (ASC) 946 for debt, valuation standards) and list the 2025 changes.

Core principles

• Fair value is estimated at each measurement date, meaning each time a fair-value-based NAV is reported to investors, from the perspective of market participants.
• Techniques are applied consistently between measurement dates and changed only when a change gives a better estimate, with the reason documented.
• For private equity and venture holdings, value is usually realised by selling the whole company, so enterprise value is the starting point. The Guidelines set out the steps: estimate enterprise value; adjust it for surplus assets, excess liabilities and contingencies; deduct instruments ranking ahead of the fund's highest-ranking instrument (debt valued from a market participant's view, often at par or payoff if it must be repaid on a change of control); allow for dilution; apportion what remains among instruments by ranking, including liquidation preferences; allocate to the fund's holdings.
• Valuers should exercise prudent judgement without excessive caution and use information known or knowable at the measurement date.
• Calibration: when the entry price was fair value, the techniques to be used later are tested against it with inputs at entry.
• Backtesting: exit prices are compared with earlier marks to find and correct bias.

Valuation techniques

Section I 3.3 lists the techniques:

• Market approach: multiples (3.4), industry valuation benchmarks (3.5) and available market prices (3.6).
• Income approach: discounted cash flows (DCF) of the investee company (3.7) or from the investment itself (3.8).
• Replacement cost approach: net assets (3.9).

The price of a recent funding round (price of recent investment) is used to calibrate inputs and is not a standalone technique (3.10). Industry benchmarks such as price per bed or per subscriber are mainly a sanity check. The Guidelines describe DCF of an equity investee as highly sensitive to its inputs and most useful to corroborate market-based estimates. Debt investments are generally valued by yield analysis; par, face value or amortised cost is not automatically fair value.

Valuing fund interests

An investor in a fund may base the fair value of its interest on its share of the last reported NAV, if that NAV is derived from the fair value of the underlying investments and adjusted for significant changes up to the investor's measurement date. Exceptions: an actively traded interest is valued at its traded price, and an interest the holder has decided to sell for an amount other than NAV is valued at the expected sale price. Adjustments may be needed for reporting lag, later investments or realisations, market movements, carried interest and clawback, waived fees, and materially different marks by different GPs for the same company. An orderly secondary transaction in the same fund must be considered as one input. The 2025 edition adds guidance on secondary-market discounts and premia, which do not by themselves mean the underlying fair values are wrong. Where NAV cannot be used and no market information exists, a DCF of the fund's cash flows is the fallback, rarely used in practice.

What changed in the 2025 edition

The Board left the Guidelines themselves unchanged except for a clarifying edit to 1.4 and concentrated on the explanatory text and Section II. Changes include: a reconfirmation that the price of recent investment is not automatically fair value and that fair value will generally change between measurement dates; reorganised guidance on the value of debt to deduct; an expanded explanation of known or knowable information; a recast calibration example and guidance on calibrating to follow-on transactions; discussion of scenario analysis; text reflecting that the 2022 ASC 820 change on contractual restrictions is now effective; reordered guidance on debt and convertible debt investments; a new section on whether a transaction price is fair value; expanded guidance on complex capital structures and liquidation preferences; a section on secondary-market discounts or premia for fund interests; and new Section II material on limited information for co-investments, more frequent valuations, and venture debt, convertible loan notes, simple agreements for future equity (SAFEs) and advance subscription agreements (ASAs). The introduction now covers sustainability factors and the use of AI tools, with the valuer remaining accountable for the result.

Worked examples

Examples are illustrative; figures are not market data.

Not the same as

• Fair Value: Fair value is the accounting measurement objective defined in ASC 820 and IFRS 13; the IPEV Guidelines are industry guidance on how to estimate it for private capital.
• Valuation Policy: A valuation policy is a manager's own documented procedures; it typically incorporates the IPEV Guidelines but also covers governance, frequency and controls they leave to the manager.
• Global Investment Performance Standards: The Global Investment Performance Standards (GIPS) govern how investment performance is calculated and presented; the IPEV Guidelines govern how the underlying holdings are valued.

Common mistakes

• Citing the 2022 edition for quarters beginning on or after 1 April 2026, or the 2025 edition for earlier quarters without noting early adoption.
• Calling them the "International Private Capital Valuation Guidelines". The title is International Private Equity and Venture Capital Valuation Guidelines; "private capital" is the scope term used inside them.
• Treating the Guidelines as an accounting standard. They are best-practice guidance that yields compliant measurements when followed; the standards themselves prevail.
• Carrying an investment at the price of the last round for several periods without testing whether conditions have changed.
• Applying a discount for marketability, which the Guidelines treat as inconsistent with fair value.
• Using a GP-reported NAV as the fair value of a fund interest without checking its date, its basis and the adjustments in 4.2.

Edge cases

• Early-stage companies with complex capital structures are often valued with scenario-based methods calibrated to the latest round, because the round price applies to one share class only.
• For real estate the unit of account must be identified first (the property, the debt financing it, or the equity interest net of debt), and any third-party appraiser must value on the fair value basis and at that unit of account (Section II 5.15). Infrastructure is often valued with an income technique because transaction data are limited (5.16).
• Co-investors with limited information may refer to the lead investor's mark but are expected to reach their own conclusion (Section II 5.18).

Questions

External standards

Sources

1. International Private Equity and Venture Capital Valuation Guidelines (2025 edition). IPEV Board, IPEV, Published 11 December 2025; in effect for quarterly reporting periods beginning on or after 1 April 2026; early adoption encouraged. Status: Current; supersedes the December 2022 edition (checked 2026-10-01). Preface (supersession, effective date, precedence); Introduction (financial reporting standards do not require the Guidelines; AI); Section I 1-4; Section II 5.15, 5.16, 5.18; Section III; Appendix 2 (Valuation Standards, IVSC understanding); Appendix 3 (changes) — supports: Status, scope, structure, principles, techniques, fund-interest guidance and 2025 changes
2. International Private Equity and Venture Capital Valuation Guidelines (December 2022 edition). IPEV Board, IPEV, Published 14 December 2022; effective for periods beginning on or after 1 January 2023. Status: Superseded by the 2025 edition for periods beginning on or after 1 April 2026 (checked 2026-10-01). Preface (supersedes the 2018 Guidelines; in effect for reporting periods beginning on or after 1 January 2023) — supports: Prior edition and its effective date
3. Invest Europe Professional Standards (Code of Conduct and Commentary) and 2024 Investor Reporting Guidelines. Invest Europe, Investor Reporting Guidelines published 25 January 2024 (replace all earlier versions); Professional Standards Handbook last full edition April 2018. Status: Current (checked 2026-10-01). 2024 Investor Reporting Guidelines: Preface (IPEV Guidelines endorsed March 2023); Sec. 4, Portfolio Investment Detail, 'Valuation' (report any non-compliance with the IPEV Guidelines) — supports: Invest Europe endorses the IPEV Guidelines and its reporting guidelines refer valuation to them
4. IFRS 13 Fair Value Measurement. IFRS Foundation / International Accounting Standards Board (IASB), Issued May 2011 by the IASB; later consequential amendments (IAS 19 2011, Annual Improvements 2011-2013, IFRS 9 2014, IFRS 16 2016, IFRS 18 2024, IFRS 19 2024). Status: in force (checked 2026-10-01). Standard summary — supports: IFRS 13 fair value definition

• Fair Value
• Enterprise Value (EV)
• Net Asset Value (NAV)
• Valuation Policy
• Comparable Company Analysis (Trading Comps)
• Discounted Cash Flow (DCF)

• 409A Valuation
• EV/EBITDA Multiple
• Growth Equity
• J-Curve
• Operational Due Diligence (ODD)
• Portfolio Company
• Private Equity (PE)
• Residual Value to Paid-In (RVPI)