International Private Equity & Venture Capital Valuation Board commits to fair valueThe International Private Equity & Venture Capital Valuation Board has reaffirmed its commitment to fair value as the best measure of valuing private equity portfolio companies and investments in private equity funds. This comes at a time when the appropriateness of fair value has been called into question amid financial market turmoil and stock market volatility.
'The Board's support for fair value is underpinned by the transparency it affords investors in funds, which use fair value as an indication of the interim performance of a portfolio. In addition, institutional investors require fair value to make asset allocation decisions and to produce financial statements for regulatory purposes,' according to the Board's statement.
The Board stressed that fair value for private equity portfolio companies should be viewed as an estimate based on the specific characteristics of each security and on market forces and that fair value requires a higher level of sophisticated application from all stakeholders - fund managers, institutional investors, auditors and regulators.
The Association Française des Investisseurs en Capital, the British Private Equity and Venture Capital Association and the European Private Equity and Venture Capital Association developed the International Private Equity and Venture Capital Valuation Guidelines, launched in March 2005 to reflect the need for greater comparability across the industry and for consistency with IFRS and US GAAP accounting principles. The independent IPEV Valuation Board was established by the three organisations to manage the evolution of the guidelines going forward.
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Private Equity News» By Region» Europe
Private Equity News» By Region» Europe
