IPEV publishes 2025 Valuation Guidelines

The International Private Equity and Venture Capital Valuation Board (the “IPEV Board”) has published the 2025 edition of the International Private Equity and Venture Capital Valuation Guidelines (the “Guidelines”), which supersede the 2022 edition.

The Guidelines set out recommendations and best practices for valuing private capital investments measured at fair value, drawing on experience with IFRS 13 and ASC 820.

The 2025 edition preserves the established framework while introducing targeted clarifications and enhancements reflecting current market practice and stakeholder expectations. Updates include clearer guidance for, among others, debt valuations, calibration, complex capital structures, liquidation preferences, discounts for contractual restrictions and secondary transactions, and carried interest.

The 2025 edition also introduces three new dedicated sections:

• Hybrid instruments. The Guidelines introduce a dedicated section on hybrid instruments, such as venture debt and SAFEs, which have become increasingly common in private markets. The Guidelines clarify that the choice of valuation model should be driven by the specific legal terms of the instrument and note that a “one-size-fits-all” approach is no longer considered appropriate for this asset class.
• Sustainability and ESG. The Guidelines clarify that sustainability and ESG factors may be relevant valuation considerations where they are measurable and material. Where applicable, such factors should be reflected in fair value through their impact on key valuation inputs, including projected cash flows, discount rates or valuation multiples. This may involve quantifying identifiable elements such as carbon tax costs, expected energy savings or regulatory compliance expenditures.
• Artificial Intelligence (AI). A new section addresses the use of AI and large language models (LLMs) in valuation work, emphasising that automated tools should complement, not replace professional judgement.

Find the IPEV 2025 Valuation Guidelines here.

 

Next steps: The new Guidelines are effective for reporting periods beginning on or after 1 April 2026.

Tags:  Valuation