We have disucssed the key revision brought by International Private Equity Valuation ("IPEC") Board in their recent ediiton of guidelines along with its impact on PE and VC firms.

1. page A L P S V E N T U R E P A R T N E R S 1
The document is intended solely for the informational purpose and internal use of client and is not intended to be and should
not be used by any other person or entity.
IPEV 2019G U I D E L I N E C H A N G E S A N D I M P A C T

2. page A L P S V E N T U R E P A R T N E R S 2
Key Update
The International Private Equity Valuation (“IPEV”)
Board released the 2018 edition of Private Equity
Valuation guidelines. The most significant revision is
on the reliance of recent round of transaction as a
valuation method.
“Price of a Recent Investment was removed as a
specific Valuation Technique to reinforce the
premise that Fair Value must be estimated at
each Measurement Date.”
As per IPEV the Price of a Recent Investment, if
deemed to be Fair Value, is the best estimate of Fair
Value as of the date of investment. At subsequent
measurement dates, the Price of a Recent Investment
will likely be used as a starting point to estimate Fair
Value.

3. page A L P S V E N T U R E P A R T N E R S 3
Impact
The revision will have a significant impact on the
way PE and VC firms used to conventionally value
investments.
The board observed that by describing the Price of a
Recent Investment as a Valuation Technique, many
users of the Guidelines misinterpreted or misapplied
the use of a transaction price such that they did not
undertake efforts to estimate Fair Value at
subsequent Measurement Dates.
Rather, they used the Price of a Recent Investment
“blindly” without additional analysis for an
extended period of time. Such blind acceptance of
the Price of a Recent Investment does not result in a
Fair Value measurement consistent with accounting
standards.

4. page A L P S V E N T U R E P A R T N E R S 4
The Board reiterated that Fair Value should be estimated using consistent Valuation Techniques from
Measurement Date to Measurement Date unless there is a change in market conditions or investment-specific
factors, which would modify how a Market Participant would determine value.
Examples of events that might appropriately lead to a change in Valuation Technique:
▪ The stage of development of the enterprise changes (from pre-revenue to revenue to earnings);
▪ New markets develop;
▪ New information becomes available;
▪ Information previously used is no longer available;
▪ Valuation Techniques improve; and
▪ Market conditions change.
Fair Value is the price that would be received to sell an asset in an Orderly Transaction between
Market Participants given current market conditions at the Measurement Date.
For Unquoted Investments, the measurement of Fair Value requires the Valuer to
assume the Investment is realised or sold at the Measurement Date whether or
not the instrument or the Investee Company is prepared for sale or whether its
shareholders intend to sell in the near future.
Fair Value

5. page A L P S V E N T U R E P A R T N E R S 5
Valuation Approach
Income approach
This approach converts future
amount (for example, cash
flows or income and
expenses) to a single current
(i.e., discounted) amount.
Market approach
A valuation technique that
uses prices and other relevant
information generated by
market transactions involving
identical or comparable (i.e.,
similar) assets, liabilities or a
group of assets and liabilities,
such as a business
• Multiples
• Industry Valuation
Benchmarks
• Available Market Prices
Cost approach
The cost approach reflects
the amount that would be
required currently to replace
the service capacity of an
asset (often referred to as
current replacement cost)
Transaction price is typically defined as the price paid (received) for a particular asset (liability),will
represent the fair value of that asset (liability) at initial recognition, but not presumptively.

6. page A L P S V E N T U R E P A R T N E R S 6
Alps Venture Partners has established
a team of experts that have experience
in valuing businesses across diverse
industry sectors and all developmental
stages; ranging from clients with seed
funding to pre-IPO stage.
With the team having experience of
both valuations and audits, our detailed
and insightful valuation appraisal
reports, along with our responsive
support, help our clients easily pass
through any stringent audit review
process in a smooth, efficient and
time-bound manner.

7. page A L P S V E N T U R E P A R T N E R S 7
Disclaimer
The contents of this presentation are protected by copyright. You may read the contents and make copies for your own personal use. You
may also give copies of reasonable extracts, on an occasional basis, free of charge to your contacts for their personal use provided that Alps
Venture Partners is acknowledged as the source, the text is not altered in any way, and this warning is brought to their attention. Any other
use or copying of the contents of this presentation is prohibited, unless Alps Venture Partners gives its prior written consent.
For further information please contact us at info@alpsvp.com
Pursuant to Title 17, United States Code, Section 512(c)(2), notifications of claimed copyright infringement under United States copyright
law should be sent to Service Provider’s Designated Agent. ALL INQUIRIES NOT RELEVANT TO THE ABOVE PROCEDURE WILL
RECEIVE NO RESPONSE.
This Agreement (and any further rules, policies, or guidelines incorporated by reference) shall be governed and construed in accordance
with the laws of the United States (USA), United Kingdom, Canada, Brazil, France, and India without giving effect to any principles of
conflicts of law.
Alps Venture Partners welcomes your questions or comments regarding this Statement of Privacy. If you believe that Alps Venture Partners
has not adhered to this Statement, please contact Alps Venture Partners at our given toll free contact numbers.
Copyright © 2019 ALPS VENTURE PARTNERS. All Rights Reserved