CERTYNEX IFRS ACADEMY

Valtrin estimates the fair value of an interest in an unlisted company by applying to its earnings the multiples observed in recent sales of comparable companies. Which valuation approach does this correspond to?

The cost approach, because the estimate starts from the amounts spent to set the company up.

The income approach, because future earnings are converted into a single discounted amount.

The market approach, because it uses prices from comparable transactions.

No approach, because an unlisted company cannot be valued by comparison.