Valuation and pricing controls
The control objective is to show that the method matches fund documents and the accounting framework, source independence and hierarchy are clear, judgement is challenged, similar assets are consistent and arbitrary pricing does not transfer value between investors.
Practical source hierarchy
- Observable quote in an active market at the valuation point.
- Approved independent pricing service.
- Comparable transaction, broker quote or other observable input.
- Model with significant unobservable inputs.
- Manager price or cost as a last resort, with evidence and approval.
Before applying the hierarchy, assess market activity, orderliness, the unit of account, holding size and restrictions. Challenge stale or zero prices, dispersion, single-broker quotes, corporate actions, credit events, model changes and conflicts.
A private-asset memo records the investment, date, method, rationale, input sources, comparable adjustments, scenarios, net debt, FX, liquidity/control adjustments, movement bridge, sensitivity, approval and evidence. IPEV is professional guidance; it does not replace the governing accounting and regulatory framework.