Rangatira Annual Report 2025 - Flipbook - Page 49
Annual Report 2025
Note 8.2 Fair value of investments
Significant estimates - fair value techniques for investments
Fair value is 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. The Company’s estimation of fair value is based on
the International Private Equity and Venture Capital Associated Limited’s (IPEV) guidelines, which also ensure
compliance with NZ IFRS 13 Fair Value Measurement. There are three broad valuation approaches in the IPEV
guidelines which the Company applies:
Market approaches
1.
EBITDA multiples - using earnings multiples techniques
2.
Benchmarking - using industry valuation benchmarks such as value per subscriber
3.
Recent price - referencing the price of recent investment, but not as a standalone technique
4.
Market price - using the quoted market price for listed investments where an active market exists
Income approaches
5.
DCF - Discounted cash flows from the underlying business or investment
Replacement cost approach
6.
NAV - using the net asset value technique
From time-to-time, the Company may also engage an external valuer to determine the fair value of an investment.
Fair value hierarchy
Fair values must be determined in the following hierarchies:
Level 1
Quoted market price - financial instruments with quoted prices for identical instruments in active
markets
Level 2
Valuation technique using observable inputs - financial instruments with quoted prices for similar
instruments in active markets or quoted prices for identical or similar instruments in inactive markets
and financial instruments value using models where all significant inputs are observable
Level 3
Valuation techniques with significant non-observable inputs - financial instruments valued using models
where one or more significant inputs are not observable.
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