View source for Reference Value

The '''Reference Value''' is calculated by adding the book value of fixed assets (i.e. buildings, property, machinery minus depreciation) to 20 times the [[Investor Share]] distributed in the previous accounting period.

For example, if a [[FairShares Enterprise]] owns a property valued at £300k, and generates an [[Investor Share]] of £25k the previous year, then the new Reference Value will be:

 £300,000 + (20 x £25,000) = £800,000

The Reference Value is calculated at the start of each year to decide the number of [[Member Shares]] to issue to [[Labour Shareholders|Labour]] and [[User Shareholders]].

In practice, the 20 x multiplier needs to be sensitive to the number of active shareholder classes to avoid distorting the value of the enterprise. A spreadsheet is available from the FairShares Institute (http://fsi.coop) to help with projections and valuations of a [[FairShares Company]].

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