International Valuation Standards (IVS)

The process of estimating the economic value of a company's active user community, considering metrics such as engagement levels, conversion rates, lifetime value, and network effects. User base valuation is central to the assessment of platform businesses and social media companies, where the user community itself is the primary intangible asset.

A ratio used to estimate the value of a company by comparing its market value or enterprise value to a financial metric such as revenue, EBITDA, or earnings. Higher multiples typically reflect stronger growth prospects, margin quality, and intangible asset positions.

A valuation methodology that determines the total value of a diversified company by independently valuing each business segment, product line, or asset category and aggregating the results. Sum-of-the-parts analysis is particularly useful when a conglomerate's divisions operate in different industries with distinct risk profiles, growth rates, and comparable company sets.

The valuation of a company immediately after a new funding round, calculated as the pre-money valuation plus the capital raised. Post-money valuation determines the ownership percentage that new investors receive for their investment.

The valuation of a company immediately before a new funding round. Pre-money valuation is negotiated between the company and investors and, combined with the amount raised, determines how much equity is issued to new shareholders.

The net asset value of a company as recorded on its balance sheet, calculated as total assets minus total liabilities. Book value often significantly understates the true worth of intangible-rich businesses because many intangible assets are not recognised under accounting standards.

A set of measurement guidelines and statistical standards developed by the Organisation for Economic Co-operation and Development for comparing productivity across countries and sectors. The OECD framework addresses the treatment of intangible investment, quality adjustment, and multi-factor productivity, providing the foundation for international productivity benchmarking.

A reasonableness check performed in purchase price allocations to verify that the weighted average rate of return across all identified assets (tangible, intangible, and goodwill) is consistent with the overall weighted average cost of capital (WACC) used in the transaction. If WARA materially deviates from WACC, it indicates that the individual asset returns or relative values require adjustment.