Fair value on trial: Why the new 2025 IPEV guidelines could mean more valuation disputes

February 19, 2026

Jörn Eschment & Jean-Jacques Choron

Summary

Valuation disputes rarely start in arbitration—they start at deal stage. As use of the 2025 IPEV Valuation Guidelines grows in contentious settings, investors are increasingly confronting how reporting frameworks can later shape dispute outcomes.

In December 2025, the International Private Equity and Venture Capital Valuations Board (IPEV) released the IPEV Valuation Guidelines 2025, reinforcing their role as a global reference for determining Fair Value in private capital.

The guidelines are designed to support financial reporting and investor transparency. But in practice, they are now playing a growing role in disputes - from post-M&A earn-outs to shareholder conflicts and investment arbitration, particularly as valuations are increasingly anchored in third-party market metrics.

That raises an increasingly common question for dealmakers and investors alike: When do accounting rules start to shape legal outcomes?

From accounting guidance to arbitral argument

The IPEV Guidelines do not set legal standards for damages or compensation and should not be seen as law. Rather, they describe how a hypothetical market participant would price an asset at a specific point in time, based on information that was known - or reasonably knowable - then.

The guidelines are internationally endorsed, aligned with IFRS and US GAAP Fair Value concepts and methodologically sophisticated. As a result, they are increasingly relied on by valuation experts in post-M&A disputes, shareholder arbitrations, valuation adjustment cases and even investment arbitration. They are often framed as an objective reference point by claimants, sometimes by respondents and frequently by experts on both sides.

What has changed is disputes are no longer just about the valuation outcomes, they are about whether the IPEV Guidelines should apply at all.

Three fault lines driving future disputes

The 2025 edition sharpens several principles that are likely to fuel arbitral disagreement.

1. Hypothetical exit vs. legal reality
IPEV assumes a sale at the valuation date, even where no sale was intended, no market existed or the investment was strategically locked in. This abstraction can clash with legal arguments focused on what actually happened - or what the parties intended - an asymmetry often welcomed by claimants and resisted by respondents.

2. Market participant assumptions vs. party-specific expectations
Fair Value under IPEV is not investor-specific. It reflects what a typical market participant would assume, not what the parties negotiated. The 2025 IPEV Guidelines sharpen this distinction, placing greater weight on externally observable, third-party valuation evidence, including broker estimates and market comparables. This creates tension in disputes involving earn-outs, minority rights, joint ventures and treaty claims, where contractual or factual particularities may matter more than an objective market lens. As valuation committee oversight is required with consistent methodologies across comparable assets and rationale for key assumptions, the valuation process itself could be a focus of dispute.

3. Known-or-knowable information vs. hindsight
The guidelines strongly reject hindsight. Later transactions, exits or collapses only matter if they show what was foreseeable at the time. In inherently retrospective arbitral proceedings, particularly where outcomes diverge sharply, this principle is frequently challenged.

Why the 2025 update matters

The latest guidelines offer more detailed guidance on:

Calibration to transaction prices

Complex capital structures

Liquidation preferences

Distressed and dislocated markets

They also reaffirm the primacy of a market participant perspective, drawing on external metrics. That added clarity makes the guidelines more attractive as a reference point in disputes, but also more likely to be contested.

Where disputes will crystallize

1. Earn-out disputes: Value then versus reality later

Sellers often argue that earn-out valuation should reflect the business’s value at signing; buyers point to subsequent underperformance. IPEV’s insistence of using only contemporaneous information puts pressure on how contracts are interpreted.

2. Minority shareholder disputes: Enterprise value versus minority reality

Minority shareholders seek enterprise value while majorities argue for discounts reflecting lack of control or liquidity.

IPEV typically looks at value at the enterprise level and is skeptical of holder-specific discounts. Whether that approach fits the legal rights of minority investors is increasingly contested.

In both cases, the key questions are not purely technical. They go to contract interpretation and legal standards, not just valuation methodology.

How Burford works with private equity sponsors

Burford partners with private equity sponsors to finance and monetize legal claims and awards as strategic assets. Capital is provided on a non-recourse basis, secured against the value of the underlying claim or award, allowing sponsors to pursue or realize value without deploying fund capital, increasing leverage or diluting ownership.

In funding scenarios, Burford covers legal costs, removing unpredictable litigation spend and allowing management teams to focus on core operations. In monetization scenarios, Burford provides upfront liquidity against expected recoveries, enabling sponsors to accelerate value realization while retaining participation in the upside.

For private equity sponsors, Burford’s capital preserves liquidity, supports efficient capital allocation, manages duration risk where disputes extend beyond hold periods and helps unlock value from legal matters that can otherwise complicate or delay exits.

The real question for tribunals

As IPEV moves from financial statements into dispute filings, tribunals - and parties - are being forced to decide how far accounting concepts should travel into legal decision-making.

The guidelines provide a common language for discussing Fair Value. They do not, however, supply automatic answers.

For investors, sponsors and corporates, the takeaway is clear: Valuation methodology is no longer just a reporting issue, but a dispute risk that needs to be considered at the deal stage.

Dr. Jörn Eschment is a Director with responsibility for assessing and underwriting legal risk and leads Burford’s investment arm in Germany, Austria, Switzerland and Liechtenstein.

Jean-Jacques Choron is a Vice President, responsible for using quantitative models and proprietary datasets to help assess potential investments and manage current investments.

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