IPEV publishes draft amendments to valuation guidelines

The guidelines were last updated in 2012, and this recent update takes into account the last three years of using IFRS 13 international accounting standards, as well as the continued application of ASC Topic 820 (US GAAP).

There were two drivers behind the draft amendments. The first was to improve the readability of the guidelines with clarification of commentary and formatting changes. IPEV also introduced a number of technical clarifications, which include an update on the IASB's deliberations on the interpretation of the Unit of Account concept when valuing investments.

Other technical clarifications include one on how to consider the value of debt in terms of valuing equity; differentiation between earnings multiples and revenue multiples; removing negative bias towards discounted cash flow techniques; and expanded discussion on changes in valuation techniques, calibration, back-testing and the use of multiples.

To access the draft amendments, click here. Comments on the consultation, questions and general feedback are due by 27 November 2015.

The IPEV board was set up in 2005 and is responsible for maintaining, promoting, monitoring and updating the IPEV valuation guidelines.

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