One of three basic valuation methods, ‘Asset based valuations’ are used only to value companies. This particular method simply derives value from historical costs as recorded in the balance sheet, thus the total value of investors shares is equal to Shareholders’ Funds. As a general rule, asset based valuations tend to consistently undervalue companies due to the use of historic rather than current cost accounting, together with the under-stating or absence of such intangible assets as brand values.