Under this asset valuation method, the actuarial value of assets (for funding) or solvency value of assets (for Canadian registered mode solvency assets) is determined as a weighting of market and book values. Therefore you must provide the Current Book Value of Assets as of the Valuation Date.

Under this asset valuation method, an Expected Actuarial Value (funding) or Expected Solvency Value (solvency) is calculated. Three methodologies are available for this purpose:

• Weighting of Book and Market Values sets the actuarial value or solvency value of assets equal to the product of the Book Value Weighting and the book value of assets and adds to this result the product of (1 – the book value weighting) and the market value of assets. Thus the asset value as of the Valuation Date is essentially a weighted average of market and the value entered for the Current Book Value of Assets parameter.

• Book Value plus n-year average of Excess of Market over Book sets the actuarial value or solvency value of assets equal to the book value of assets plus the average (over the period specified by the Years in Averaging Period parameter value – see the discussion below) of the excess of the Market Value over the Book Value. The excess on the Valuation Date is included in the average, so when you select this method, the Historical Asset Values spreadsheet will request historical values for one year less than the number the years in the averaging period.

• Book Value times n-year average of Ratio of Market to Book sets the actuarial value or solvency value of assets equal to the product of the book value of assets and the average (over the period specified by the Years in Averaging Period parameter value – see the discussion below) of the ratio of Market Value to Book Value. The ratio on the Valuation Date is included in the average, so when you select this method, the Historical Asset Values spreadsheet will request historical values for one year less than the number the years in the averaging period. When the book value is zero, a ratio of 1 is used.

For the second and third options above, enter the number of Years in Averaging Period; a spreadsheet becomes accessible in which to enter the amount of historical Market Value and Book Value for each relevant prior year. Year -1 is the year ending on the Valuation Date; Year -2 (relevant for N greater than 2) is the year immediately preceding the year ending on the Valuation Date, and so forth. Because the excess (second option) or ratio (third option) of market value to book value on the Valuation Date is included in the average, the number of rows to enter values for is one fewer than the number entered for the Years in Averaging Period parameter. For the current year, that is, Year 0, ProVal supplements the market and book value histories with the funding market value (entered under the Initial Asset Values topic) and the Current Book Value of Assets parameter value, respectively. In a forecast, ProVal will project market and book values to future valuation dates, as needed for the averaging period.