Equitable value
A short, practical note on equitable value, with the public definition from IVS / Red Book (effective 31 January 2025).
In my practice, equitable value is the price that is fair between two identified parties, taking account of the advantages and disadvantages each gains from the transaction. Unlike market value, it does not assume hypothetical parties, so it may reflect matters the market would disregard, such as certain synergies between the parties. IVS describe it as a broader concept than market value. The IVS examples I use with clients include shareholdings between two specific parties and arrangements between a landlord and a tenant.
“This is the estimated price for the transfer of an asset or liability between identified knowledgeable and willing parties that reflects the respective interests of those parties.”
Source: IVS Glossary 10.09 (= IVS 102 Appendix A30.01)
Common confusion
Equitable value ≠ fair value (IFRS 13): accounting fair value is a different basis, defined outside IVS.