IPEV guidelines
IPEV guidelines

The International Private Equity and Venture Capital Valuation (IPEV) Guidelines (‘Valuation Guidelines’) set out recommendations, intended to represent current best practice, on the valuation of Private Capital Investments. The Valuation Guidelines 2022 should be regarded as superseding the previous 2018 Valuation Guidelines issued by the IPEV Board and are considered in effect for reporting periods beginning on or after 1 January 2023.


The Valuation Guidelines are intended to be applicable across the whole range of alternative funds (seed and start-up venture capital, buyouts, growth/development capital, infrastructure, credit, etc.; collectively referred to as Private Capital Funds) and financial instruments commonly held by such funds.


Where there is a conflict between the content of IPEV Guidelines and the requirements of any applicable laws or regulations, accounting standards or generally accepted accounting principles, the latter requirements should take precedence.


IPEV guidelines

The key purpose of the revised edition of the IPEV guidelines is to not to re-invent the wheel but to provide a framework for consistently determining the fair value of investments held by private capital funds.

Therefore, the enhancements in the 2022 edition are meant to continue to support the existing concepts to assist investors in private capital funds in making better economic decisions in relation to the fair value of the investments.


Five key points to note in the lasts IPEV guidelines changes (effective as of 15 December 2022)
are outlined below:


This relates to conditions that existed at the date of measurement. Known or Knowable information pertains to facts, conditions, or observable information which exists as of the measurement date and is available to the valuer or would be available to valuer through routine inquiry or due diligence. For example, the value of a traded share is known or knowable at the measurement date as it can be obtained from the relevant exchange or reporting service. For example, changing markets, new players in the industry, new products, rise in interest rates. These should be considered when deriving an investment’s fair value at a specific date.


Investors’ needs are evolving and there is an ever-increasing focus on ESG bringing a growing need to integrate ESG into valuation models. ESG factors are becoming an important focus of investors, regulators, and governments. These factors may impact fair value from both a qualitative and quantitative perspective.


While there are different ways to value a company in its early stage, it is very subjective to put a value on early-stage entities which are in the pre-revenue stage. Valuation methods and key performance indicators (KPIs) will differ, depending on where the business is. Attention should be paid to how the capital is structured and whether the company is achieving the set milestones, accordingly this would impact the valuation favourably or unfavourably.


Relates to volatility and uncertainty, in relation to potential future development i.e. increasing interest rates, Covid-19 pandemic, Russian-Ukraine war amongst others. In these circumstances professional judgment must be applied as it may not be appropriate to use transaction multiples or recent price if the market is changing very rapidly especially those negotiated before a market dislocation to receive significant, if any, weight in determining fair value. In such conditions fair value remains the amount that a market participant would pay in an orderly transaction reflecting current market conditions.


There is a renewed emphasis on entities to ensure information gathered during the valuation process is of high-quality ensuring reliability of the data used in each valuation technique.


Project accountants specialise in private equity fund accounting and fund administration support services. If you have a query regarding the application of IPEV guidelines, please feel free to reach out to a member of our team or visit

ESG Investing: What You Need to Know?



ESG investing has become increasingly popular in recent years as investors seek to align their investments with their values. Environmental, social, and governance factors are now used to evaluate companies to invest in.

According to the Global Sustainable Investment Alliance, ESG investing assets under management reached $35.3 trillion globally in 2020, a 15% increase from 2018. According to a report by Bloomberg, ESG assets may hit $53 trillion by 2025.

ESG Investing – Challenges and Opportunities

Companies that prioritize ESG factors are becoming more attractive to investors. Industries such as renewable energy, sustainable agriculture, and green technology have strong environmental practices and are favored by ESG investors. On the other hand, industries such as fossil fuels, tobacco, and weapons manufacturing are often avoided by ESG investors due to their negative social and environmental impacts.

Investors can use various ESG metrics to assess a company’s performance in each of these areas. Environmental metrics evaluate a company’s impact on the environment, such as carbon emissions, water usage, and waste generation. Social metrics look at a company’s impact on its stakeholders, including diversity and inclusion policies, labor practices, and human rights. Governance metrics evaluate a company’s leadership and management, such as executive compensation, board diversity, and shareholder rights.

However, one of the biggest challenges of ESG investing is the lack of standardization in ESG metrics. There is no universal standard for what constitutes an environmentally or socially responsible company. This makes it difficult for investors to compare companies. Additionally, some investors argue that prioritizing ESG factors can lead to lower returns, while others believe that investing in companies with strong ESG practices can lead to better long-term returns.

Despite these challenges, ESG investing is likely to continue to grow in popularity. As the world becomes more focused on sustainability and social responsibility, the demand for ESG investments is expected to increase. Standardization and transparency in ESG metrics could help to alleviate some of the challenges associated with ESG investing.

Concluding remarks

In conclusion, ESG investing is a type of investment strategy that considers environmental, social, and governance factors when evaluating companies to invest in. ESG investing allows investors to support companies with positive impacts and avoid companies with negative impacts. The trend towards ESG investing is growing rapidly as the world prioritizes sustainability and social responsibility.

Project Accountants take pride in providing support to businesses and funds with an ESG initiative. Please reach out to a member of our team or visit to learn more about how we can help you.

Accounting for NFTs under IFRS


Accounting for NFTs (Non-Fungible Tokens) under IFRS can be challenging considering the nature of assets and process involved in creation and underlying commercial activity.

NFT is a unique digital asset that is verified using blockchain technology, making it a one-of-a-kind item that cannot be replicated or exchanged for something else. During the creation process, digital assets are tokenized via blockchain technology and are assigned with unique identification codes and metadata that makes them unique.

NFTs are typically created on Ethereum, the most popular blockchain platform for creating NFTs. During the minting process, a smart contract is created. A smart contract is a self-executing contract that automatically enforces the terms of the agreement between the buyer and seller of NFT.

Some of the key features of NFT include transparency, digital ownership, and traceability.

Use cases of NFT transcend digital art, collectibles, gaming, music, real estate, etc.

Accounting of NFTS:

As with any other asset, the accounting treatment of NFTs would depend on their economic substance. Accounting for NFTs can be challenging, given their unique characteristics and the regulatory landscape.

Here are some general guidelines for accounting for NFTS as per the International Financial Reporting Standards (IFRS).

Initial Measurement

Depending on the economic substance, an asset may be accounted for under IAS 38 Intangibles Assets or IAS 2 Inventory.

NFTs acquired for the purpose of trading are likely to be classified as inventory under IAS 2. They are initially measured at cost and subsequently at lower of cost or net realisable value. On the sale of asset, any purchase/creation costs would be expensed.

An asset that meets the criteria under IAS 38 should be initially measured at cost. Subsequently, the asset is measured either on cost model or revaluation model as per the entity’s policy.

IFRS 15 revenue considerations

Where an entity earns income arising in the course of its ordinary activities involving NFTs, IFRS 15 considerations apply. In this case he five-step model would need to be followed. A summary of the model is presented below for reference.

Step 1: Identify the contract:

The first step is to identify whether a contract exists with the customer, and if so, what the terms of that contract are.

Step 2: Identify the performance obligation:

The second step is to identify the performance obligation for example sale of NFT.

Step 3: Determine the transaction price:

Transaction price can be in the form of cash or non-cash consideration. The transaction price can be variable for example in the form of royalty paid to the seller when the purchaser resells the NFT.

Step 4: Allocate the transaction price:

In general, the entire transaction price for NFTs would be allocated to the performance obligation in relation to transferring ownership of the NFT.

Step 5: Recognise the revenue:

Revenue would be recognised in accordance with the transferability of risk and rewards associated with NFT.


While there are no specific disclosure requirements in place related to NFT’s, the requirements under the relevant accounting standards apply.

Concluding remarks

The NFT market is getting traction by the day. However, it’s important to note that the NFT market is subject to volatility and fluctuations. That being said, the potential use cases for NFTs are broad, and the technology has the potential to disrupt various industries. With new players entering the market, increased integration with mainstream platforms, and the emergence of niche marketplaces, the NFT market is poised for continued growth and innovation. NFT might become one of the game-changing innovations capable of bringing sustainable and robust economic development.

Project Accountants take pride in providing accounting support to businesses having exposure in the NFT space. Please reach out to a member of our team or visit to find more about how we can help.