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titleKey points
  • Industry practices tend to rely on 'smoothed' market inputs that do not reflect the market price of risk or its variance over time.
  • Comparable transactions are hard to come by in the unlisted infrastructure sector.
  • Listed infrastructure proxies are very biased and noisy and not representative of the unlisted infrastructure universe.
  • Both IFRS guidance and industry practices focus solely on measuring the value of unlisted financial assets and do not address risk indirectly. However, neither approaches provide a general framework for the estimation of appropriate discount factors over time in unlisted and illiquid investments such as infrastructure equity and debt, leading to potentially significant biases in the measurement of fair value, as well as the risk taken by investors.

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