Correcting a valuation after committee: a new version, not a rewrite

The committee approved the fair values on Thursday. The following Monday, an analyst notices that a portfolio company's net debt carried last year's balance sheet. The file is open, the cell is one click away, and the fix takes ten seconds. That is exactly the moment the audit trail is decided: if the number is overwritten, nobody can say what the committee actually saw.

The question is not whether to correct. You must. The question is what the correction leaves behind.

Two numbers, one story

An approved valuation becomes a decision document. It was presented to specific people, on a specific date, with specific assumptions. A correction produces a second number, and both belong to the file's history: the first is the figure the committee ruled on, the second is the one the valuer now considers right.

Overwriting the first with the second does not remove the error. It removes the evidence that the error existed and the evidence that it was handled. For an auditor the difference is clear: a documented gap is a corrected anomaly, an invisible gap is an internal control question.

What must stay readable

After a correction, a third party reopening the file should be able to rebuild five things without asking anyone:

• the figure presented to the committee, exactly as presented;
• the corrected figure and the date of the correction;
• who made the change and who validated it;
• the nature of the gap: input error, late data, change of method;
• the committee's decision on the gap, or the absence of one if the impact was judged immaterial.

The IPEV guidelines stress the ability to support a fair value, and backtesting (§2.7) assumes you know what was known or knowable at each valuation date. A valuation rewritten in place makes that exercise impossible: you compare an exit price with a number that was never the number held at the date.

Let's work through a numerical example

A fictional example, with round numbers and no illiquidity discount to isolate the effect. A 35.0% stake, retained EBITDA of €4.00m, a multiple of 8.00×.

The €2.00m error on net debt costs the stake (€0.70m), a drop of 8.7%: debt is deducted at 100% of equity, then the ownership share applies. Depending on the fund's policy, that gap may or may not be material. The threshold has to be written before the error, not after. Either way, both columns of this table must exist in the file.

A materiality threshold written in advance

Not every correction justifies reconvening the committee. A defensible policy separates at least two regimes:

1. Below the threshold: the correction is versioned, attributed and reported to the committee at its next meeting, with no new approval.
2. Above the threshold: the corrected figure goes back for approval, and the value used in reporting is the one from the approved version.

The threshold can be expressed as a percentage of the line's fair value, as an amount at fund level, or both. What matters is that it precedes the case: a threshold set after seeing the gap looks like a judgment call, not a rule. The AIFM Delegated Regulation 231/2013 expects documented valuation procedures, and handling corrections is part of them.

What this requires from tooling

A spreadsheet can respect this discipline, at the price of constant rigor: a dated copy before every change, a hand-kept log, restricted write access. As soon as several analysts are involved, the arrangement rests on everyone's memory.

In Jolv, the valuation campaign freezes the date, aggregates, multiples and approved fair values (Freeze & Lock). After the freeze, a change creates a dated, attributable version instead of overwriting what exists, and the figure presented to the committee stays readable as it was presented. The materiality judgment remains the valuer's and the committee's. The exact scope of the conventions is set out in the IPEV 2025 FAQ, and the methods involved on the valuation methods page.

Freezing the approved value is also what makes a continuous valuation process trustworthy: without it, nothing distinguishes the value that was signed from the value that kept moving.

Sources

• IPEV Board, International Private Equity and Venture Capital Valuation Guidelines, December 2025 edition, §1 and §2.7
• Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive 2011/61/EU (AIFMD), OJ L 83, 22.3.2013, Section 7 "Valuation"