Valuation

See Reference Value for full details on calculating the value of a FairShares Enterprise.

The Valuation of a FairShares Company influences the Fair Price for Investor Shares. The Fair Price controls the amount paid from Surplus for each new Investor Share allocated to Labour and User Shareholders, and also the compensation paid to Investor Shareholders when they transfer ownership of their Investor Shares to other members, mutual associations and societies, co-operatives, charities and community interest companies established to make social investments for employee, social and public benefit.

(N.B. The names of companies and organisations for community benefit vary nation by nation. For example, in the US - in some states - there are Non-Profits and Benefit Corporations. In Japan, there are Specified and Certified Non-Profits, Co-operatives and Social Responsibility Corporations.

The valuation is used to calculate the Capital Gain, which determines the allocation of Member Shares.

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Return to the FairShares Glossary.