IPEV vs IFRS 13 vs ASC 820 — Fair Value
IPEV is the practitioner standard for VC/PE fair value. IFRS 13 and ASC 820 are the accounting standards that define fair value and the input hierarchy.
Introduction
For VC and PE fund managers reporting investment-portfolio fair values, three frameworks are in the room at the same time: IPEV (the International Private Equity and Venture Capital Valuation Guidelines, global practitioner standard), IFRS 13 (Fair Value Measurement, UK and global accounting standard), and ASC 820 (Fair Value Measurement, US accounting standard). They are not three competing standards — IPEV is explicitly designed to be consistent with IFRS 13 and ASC 820, while providing the practical guidance fund managers need to apply the standards to private investments. But the relationship between them is sometimes misunderstood, and the practitioner who navigates all three fluently produces reporting that survives audit, LP scrutiny, and regulator review.
This page compares the three frameworks for fair-value measurement of VC and PE investment portfolios. It sets out what each framework is, how they relate, where they diverge, and how the practitioner navigates all three in a single reporting cycle. The reader is assumed to be a VC / PE fund manager, fund CFO, or fund auditor working on investment-portfolio fair-value reporting.
TL;DR: IPEV is the global practitioner standard for VC and PE fair value, with five investment-level techniques and explicit alignment to the accounting standards. IFRS 13 is the UK and global accounting standard for fair value measurement, with the three-level fair-value hierarchy and disclosure requirements. ASC 820 is the equivalent US accounting standard, materially aligned with IFRS 13 but with US-specific terminology, disclosures, and convergence-history nuances. IPEV is how fund managers measure; IFRS 13 and ASC 820 are what the accounting standards require for the resulting numbers in the financial statements.
IPEV (International Private Equity and Venture Capital Valuation Guidelines)
IPEV is the global practitioner standard for fair-value measurement of investments held by private equity and venture capital funds. Issued by the IPEV Board (industry-led, representing the major VC / PE practitioner bodies internationally), the guidelines provide the practical methodology for applying fair-value principles to the kinds of investments that funds typically hold — minority equity stakes, preferred shares, convertibles, debt instruments with equity features — where the IFRS 13 / ASC 820 hierarchy's Level 3 inputs are the dominant category.
What IPEV provides
- Five investment-level techniques for fair-value measurement:
- Multiples — applying earnings, revenue, or other-metric multiples to the portfolio company's relevant financial measure
- Industry Benchmarks — observed metrics for comparable private or public peers, calibrated to the specific investment
- Available Market Prices — recent transaction prices, public-comparable prices, or other observable market evidence
- DCF — discounted cash flow modelling at the investment level (often equity-level, post-debt-service)
- Net Assets — book value-based or fair-value-of-net-assets-based measurement, used in narrow circumstances (typically very early stage or asset-holding entities)
- Calibration approach — guidance on calibrating the chosen technique against the original transaction price and subsequent events
- Backtesting — guidance on assessing fair-value conclusions against subsequent realisation events
- Specific guidance on debt instruments, restricted shares, control premiums, transaction costs, and other practical issues
Where IPEV fits in the regulatory stack
IPEV is not itself a regulator — it is the practitioner standard. Fund managers apply IPEV to derive fair-value conclusions, which are then disclosed in financial statements under the applicable accounting framework (IFRS 13 / ASC 820 / local GAAP). The IPEV guidelines explicitly state their consistency with IFRS 13 and ASC 820; the relationship is "IPEV is how you apply IFRS 13 / ASC 820 to private investments."
When IPEV applies
- VC fund investment-portfolio reporting (NAV / quarterly fair value to LPs)
- PE fund investment-portfolio reporting
- Family-office and direct-investor private equity holdings
- Sovereign wealth fund private-market portfolios
- Any private-investment context where fair value is reported
IPEV is a global standard, not UK-specific or European. It is endorsed by practitioner bodies in North America, Europe, the UK, Asia, and other regions. Practitioners outside the major fund hubs sometimes assume IPEV is "the European standard" — this is incorrect. IPEV is global; companies aligned to its methodology are Round-Ready, not "IPEV-compliant" in a regional sense.
IFRS 13 (Fair Value Measurement)
IFRS 13 is the UK and global accounting standard that defines fair value, sets out the measurement principles, and establishes the disclosure requirements for fair-value measurements in the financial statements. Issued by the IASB in 2011, IFRS 13 supersedes the fair-value guidance previously scattered across other IFRS standards and brings consistent definition and disclosure across all asset classes — including private investments.
What IFRS 13 provides
- Definition of fair value — "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date"
- Three-level fair-value hierarchy:
- Level 1 — quoted prices in active markets for identical assets
- Level 2 — inputs other than Level 1 quoted prices that are observable for the asset (similar assets in active markets, identical assets in inactive markets, observable market data)
- Level 3 — unobservable inputs (the dominant category for private investments)
- Valuation techniques — market approach (multiples, comparable transactions), income approach (DCF, royalty-based), cost approach (replacement cost). The three IFRS 13 approaches map onto IPEV's five techniques without contradiction
- Disclosure requirements — quantitative and qualitative disclosures of fair-value measurements, particularly at Level 3 (unobservable inputs, sensitivity analysis, transfers between levels)
Where IFRS 13 applies
- All UK and global IFRS reporting entities measuring assets or liabilities at fair value
- The reporting framework for VC and PE funds that prepare IFRS financial statements
- The disclosure framework that drives the LP reporting that funds must produce
How IFRS 13 relates to IPEV
IFRS 13 is the regulatory standard; IPEV is the practitioner application. Funds apply IPEV's five techniques to derive fair values; those fair values are then disclosed in IFRS financial statements under IFRS 13's hierarchy with IFRS 13's disclosure requirements. The two are designed to be consistent — IPEV explicitly references IFRS 13 in its guidance. Practitioner conclusions under IPEV that fail IFRS 13's market-participant test would not be defensible.
ASC 820 (Fair Value Measurement)
ASC 820 is the equivalent US GAAP standard, providing the definition, measurement principles, and disclosure requirements for fair value in US financial statements. ASC 820 was originally issued by the FASB in 2006 (as Statement 157) and amended through subsequent updates to align further with IFRS 13. The two standards are now materially aligned with limited differences.
What ASC 820 provides
- Definition of fair value — substantively equivalent to IFRS 13 (exit price, orderly transaction, market participants)
- Three-level fair-value hierarchy — identical structure to IFRS 13 (Level 1, Level 2, Level 3)
- Valuation techniques — same three approaches (market, income, cost) as IFRS 13
- Disclosure requirements — quantitative and qualitative, with US-specific terminology and presentation conventions that diverge from IFRS 13 in formatting (e.g. tabular roll-forwards for Level 3)
Where ASC 820 applies
- All US GAAP reporting entities measuring assets or liabilities at fair value
- The reporting framework for US-domiciled funds, US LPs requiring US GAAP look-through, and SEC-registered funds
- The framework underlying §409A valuations of US private company equity instruments
How ASC 820 relates to IPEV
Same relationship as IFRS 13 to IPEV. Funds apply IPEV's five techniques; the resulting fair values are disclosed in US GAAP financial statements under ASC 820's hierarchy and disclosure framework. The convergence between IFRS 13 and ASC 820 means a fund applying IPEV consistently produces conclusions that are defensible under either framework.
Where IFRS 13 and ASC 820 diverge
The two standards are materially aligned but not identical. Specific divergences include:
- Day-1 gain or loss — historical differences in recognition rules (largely resolved through convergence work but legacy practice may persist)
- Disclosure format — tabular roll-forwards, sensitivity disclosures, and unobservable-input disclosures differ in presentation conventions
- Highest-and-best-use — slight differences in how the concept is applied to non-financial assets
- Bid-ask spread treatment — minor differences in the prescribed approach
- Practical expedients — some practical expedients available under ASC 820 (e.g. NAV as practical expedient for certain fund-of-fund investments) are not directly mirrored in IFRS 13
For VC / PE portfolio fair values, the divergences are usually not material — the same IPEV-derived fair-value conclusion will support both IFRS 13 and ASC 820 reporting in nearly all cases.
A UK VC fund with a US-domiciled feeder vehicle is reporting Q4 fair values. The fund applies IPEV's five investment-level techniques across its portfolio. For each holding, the chosen technique (typically Multiples or DCF for growth-stage; Available Market Prices for late-stage with recent transactions) produces a fair-value conclusion. That conclusion is reported in the UK fund's IFRS financial statements under IFRS 13 with Level 3 disclosure and sensitivity analysis. The same conclusion is reported in the US feeder vehicle's US GAAP financial statements under ASC 820 with the US-specific disclosure format. No second valuation exercise is needed — IPEV-derived conclusions support both regulatory frameworks.
Side-by-Side Comparison
The table below sets out the practitioner's quick-reference view. Each row is a dimension of distinction across the three frameworks. (For the 3-way comparison schema constraints, methods are folded — see jurisdictional notes in each row.)
| Criterion | IPEV (Practitioner) | IFRS 13 / ASC 820 (Accounting Standards) |
|---|---|---|
| Issued by | IPEV Board (industry practitioner bodies, global) | IASB (IFRS 13, UK and global); FASB (ASC 820, US) |
| Type | Practitioner guidelines | Accounting standards (mandatory in respective jurisdictions) |
| Geographic scope | Global | IFRS 13: UK and global IFRS reporters; ASC 820: US GAAP reporters |
| Definition of fair value | Aligned with IFRS 13 / ASC 820 | Exit price in an orderly transaction between market participants |
| Number of techniques | 5 investment-level (Multiples · Industry Benchmarks · Available Market Prices · DCF · Net Assets) | 3 valuation approaches (market, income, cost) — IPEV's 5 map within these |
| Fair-value hierarchy | Implicitly Level 3 for private investments | Three-level hierarchy (1: active market; 2: observable inputs; 3: unobservable) |
| Calibration to original transaction | Explicit guidance | Implicit in market-participant test; less prescribed |
| Backtesting against realisations | Explicit guidance | Implicit; covered in subsequent-period reassessment |
| Disclosure requirements | LP-focused; aligned to fund-reporting conventions | Quantitative and qualitative; Level 3 disclosures detailed; IFRS 13 and ASC 820 differ in format |
| Mandatory or voluntary | Voluntary (but de facto industry standard) | Mandatory in respective jurisdictions |
| Relationship to other frameworks | Designed to be consistent with IFRS 13 / ASC 820 | IFRS 13 and ASC 820 substantively converged with limited differences |
| Practical-expedient provisions | Limited (NAV-based shortcuts not endorsed for portfolio holdings) | ASC 820 permits NAV as practical expedient for fund-of-fund investments; IFRS 13 does not |
| Frequency of revision | Periodic updates by the IPEV Board (e.g. major revisions every few years) | Periodic amendments by IASB / FASB; convergence work ongoing |
| Industry coverage | VC and PE specific | All asset classes |
| Audit relevance | Practitioner standard cited by fund auditors | Accounting standard mandatory for audit opinion |
| Treatment of private investments | Primary focus — the standard exists to address private-investment fair value | Provides the regulatory framework within which IPEV operates |
How the three frameworks work together in a typical fund reporting cycle
In a typical VC / PE fund reporting cycle:
- Step 1. The fund manager identifies each investment and selects the IPEV technique that best applies (Multiples for established growth-stage; DCF for cash-generating; Available Market Prices for recent-transaction; Industry Benchmarks for early-stage with peer data; Net Assets in narrow circumstances)
- Step 2. The chosen technique is applied with current data — multiples calibrated against the original transaction price and subsequent operating performance; DCF updated for current forecasts and risk profile; transaction prices verified against arm's-length evidence
- Step 3. The resulting fair-value conclusion is documented with the inputs, the technique selected, the reasoning, and the calibration evidence
- Step 4. For IFRS 13 reporting: the conclusion is classified at Level 3 (typically) and disclosed with the unobservable-input narrative, sensitivity analysis, and roll-forward
- Step 5. For ASC 820 reporting (where applicable): the same conclusion is presented with US GAAP disclosure formatting, including tabular roll-forwards and any practical-expedient applications
- Step 6. The fund auditor tests the IPEV application, the technique selection, the inputs, and the resulting Level 3 disclosures under both regulatory frameworks
A fund manager who treats IPEV as separate from IFRS 13 / ASC 820 — running two valuation exercises — has doubled the work and created scope for inconsistency. The defensible position is one IPEV-derived conclusion per investment, reported under the applicable regulatory framework's disclosure format.
IPEV is the practitioner standard; IFRS 13 and ASC 820 are the regulatory standards. Apply IPEV's five techniques to derive fair-value conclusions; report those conclusions under IFRS 13 (UK and global IFRS reporting) or ASC 820 (US GAAP reporting) with the appropriate hierarchy classification and disclosure. The three frameworks are designed to be compatible — the defensible position uses one consistent IPEV-derived conclusion across both regulatory frameworks.
FAQ
Is IPEV the same as IFRS 13?
No, but they are designed to be compatible. IPEV is the global practitioner standard providing five investment-level techniques for VC and PE fair-value measurement. IFRS 13 is the UK and global accounting standard providing the definition, hierarchy, and disclosure framework for fair value. Funds apply IPEV's techniques to derive fair-value conclusions, then disclose those conclusions in IFRS financial statements under IFRS 13. IPEV explicitly references IFRS 13 in its guidance to ensure consistency.
How many investment-level techniques does IPEV provide?
Five: Multiples, Industry Benchmarks, Available Market Prices, DCF, and Net Assets. Practitioners sometimes refer to "the four IPEV methods" — this is incorrect. There are five investment-level techniques. Asset-level methods (RFR, MPEEM, W&W, Replacement Cost) sit within the portfolio company's own PPA or impairment work and feed into the IPEV investment-level valuation as supporting evidence, not as the primary IPEV technique.
Where does ASC 820 diverge from IFRS 13?
Materially the two standards are aligned. Specific divergences include: (a) historical day-1 gain or loss recognition rules, (b) disclosure format conventions — particularly tabular roll-forwards, (c) slight differences in highest-and-best-use application for non-financial assets, (d) bid-ask spread treatment, and (e) practical expedients (NAV as practical expedient available under ASC 820 for fund-of-fund investments; not directly available under IFRS 13). For VC / PE portfolio valuations the divergences are usually not material — IPEV-derived conclusions support both frameworks.
Are private investments always Level 3?
Almost always under both IFRS 13 (UK and global) and ASC 820 (US). Level 1 requires quoted prices in active markets for the identical asset — by definition, private investments do not have this. Level 2 requires observable inputs (similar assets in active markets, identical assets in inactive markets) — occasionally available for private investments with recent comparable transactions but rare. The dominant classification is Level 3 (unobservable inputs), which carries the most extensive disclosure requirements.
What does "calibration to original transaction" mean in IPEV?
It is the practice of testing the chosen valuation technique against the original investment price. If the technique applied at the investment date would have produced the actual investment price (the round price at which the fund invested), the technique is considered well-calibrated. Subsequent fair-value applications should produce results consistent with the calibrated technique unless circumstances have demonstrably changed. IPEV is explicit about calibration; IFRS 13 / ASC 820 imply it through the market-participant test but are less prescriptive.
Can I use ASC 820's NAV practical expedient under IFRS 13?
No. ASC 820 permits the use of NAV as a practical expedient for measuring fair value of certain fund-of-fund investments (where the underlying fund reports NAV consistently with ASC 820). IFRS 13 does not provide this expedient — the holder of a fund-of-fund investment must apply IFRS 13's measurement principles directly. For fund managers reporting under both frameworks, the NAV-shortcut available for US GAAP is not available for IFRS reporting, which can produce small reporting differences in fund-of-fund structures.
How do IPEV techniques map to IFRS 13's three approaches?
IPEV's five techniques sit within IFRS 13's three valuation approaches: (a) Multiples and Industry Benchmarks sit in the market approach, (b) Available Market Prices sits in the market approach, (c) DCF sits in the income approach, and (d) Net Assets sits in the cost approach or asset-based measurement depending on application. The IPEV framework provides finer-grained practical guidance within the broader IFRS 13 / ASC 820 categories.
Is IPEV mandatory?
Voluntary but de facto industry standard. IPEV is endorsed by major practitioner bodies globally and used by virtually all institutional VC / PE funds for portfolio fair-value reporting. Funds that depart from IPEV face scrutiny from LPs, auditors, and regulators — the practical expectation is IPEV-aligned methodology. Where a fund applies a non-IPEV approach, the deviation must be documented, justified, and disclosed; auditors and LPs ask why. The most common reason for deviation is partial — a fund applies IPEV consistently across most holdings and uses a non-IPEV technique for a specific atypical holding (e.g. a structured-credit position).
When to Seek Expert Support
Three-framework navigation is routine for established fund managers, but it becomes technically demanding where (a) a fund reports under both IFRS 13 (UK / global LPs) and ASC 820 (US LPs / feeder vehicles) and disclosure formats diverge, (b) Level 3 disclosures are challenged by auditors or LPs, (c) the choice between IPEV techniques is contested for a specific holding, or (d) calibration to original transaction is no longer supportable due to material changes.
Opagio's Asset Valuator module (within Opagio Intangibles) supports IPEV-aligned investment-level fair-value workflows for VC and PE portfolios, drives IFRS 13 Level 3 disclosure outputs and ASC 820 equivalents, and captures the calibration and backtesting evidence in the Value Drivers Register. The model handles all five IPEV techniques and the cross-framework reconciliation that institutional LPs increasingly expect.
For complex multi-jurisdictional fund structures or where the three-framework relationship is being challenged in audit, the right pattern is to automate the mechanical work and have a qualified specialist review the technique selection, calibration, and disclosure mapping across all three frameworks.
Book a demo: See how Asset Valuator handles an IPEV-aligned VC / PE portfolio with IFRS 13 and ASC 820 disclosure outputs. Book a demo or speak to our team.
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