ASC 820 (Fair Value Measurement)

The International Financial Reporting Standard that defines fair value, establishes a framework for measuring it, and requires disclosures about fair value measurements. IFRS 13 introduces a three-level hierarchy based on observable market inputs and is foundational to the valuation of intangible assets in financial reporting.

The price that would be received to sell an asset or cash generating unit in an orderly transaction between market participants (IFRS 13), less the costs of disposal. Under IAS 36, it is one of two measures used to determine the recoverable amount for impairment testing.

The measure of the value of goods and services produced, calculated as revenue minus the cost of purchased inputs (services, energy, and materials). GVA captures the value a company creates through its own activities and is a core productivity metric in the Opagio framework.

A visual and analytical framework that reconciles the difference between two valuations — typically entry and exit, or book value and market value — by attributing value changes to specific drivers such as revenue growth, margin improvement, multiple expansion, and intangible asset creation. Value bridges are widely used in private equity reporting and portfolio company management.

A founder-side preparation discipline that builds the evidence base a Fund's Fair Value process needs at every measurement date — before the term sheet conversation begins. Distinct from valuation negotiation: a Fair Value defence isn't about arguing for a higher number, it's about producing the inputs the Fund's quarterly Fair Value model will consume for the duration of the investment.

The International Private Equity and Venture Capital Valuation Guidelines (IPEV Guidelines) are best-practice recommendations, published by the IPEV Board, for measuring the Fair Value of private equity and venture capital investments consistently with IFRS 13 and ASC 820. They apply at investment level: a fund's Valuer uses them to value the fund's holding in each portfolio company at every measurement date — typically quarterly — with one or more of five techniques (multiples, industry valuation benchmarks, available market prices, discounted cash flows and net assets), calibrated to the price of a recent orderly investment.

The process of assigning numerical values to attributes of objects, events, or phenomena according to defined rules and standards. In the context of intangible assets and productivity, measurement is both a fundamental challenge and a critical enabler of effective management.

The date at which Fair Value is determined under IFRS 13, ASC 820, and IPEV Valuation Guidelines. For PE and VC funds, the measurement date is typically the end of each calendar quarter, with formal Fair Value reporting to LPs within 45–60 days.

How does impairment testing work for intangible assets and goodwill?

Intangible assets with finite lives are tested for impairment when indicators of value decline exist, while goodwill and indefinite-life intangibles must be tested at least annually by comparing carrying value to recoverable amount.

How does IAS 36 impairment testing work for intangible assets?

IAS 36 requires comparing the carrying amount of an asset or cash-generating unit to its recoverable amount (the higher of fair value less disposal costs and value-in-use). If carrying exceeds recoverable, an impairment loss is recognised.

What is goodwill impairment and when does it occur?

Goodwill impairment occurs when the fair value of a business unit (cash-generating unit) falls below its carrying amount — goodwill is written down, reducing reported earnings.