Valuation Adjustment Mechanism refers to an agreement in equity financing agreements that contains transaction arrangements for future uncertain matters such as equity repurchase or cash compensation. As a core clause that occupies an extremely important position in equity investment agreements, investment institutions almost take the valuation adjustment clause as a prerequisite for investment. Its validity and enforceability are related to the survival bottom line of investment institutions. The continuous revision of the determination of the validity of the agreement in judicial practice makes the performance of the Valuation Adjustment Mechanism uncertain. Starting from the economic benefit starting point of the Valuation Adjustment Mechanism, this article expounds the business purpose and concerns of investment institutions. Through case retrieval, analyze the stages and basis of judicial judgments on the validity of the Valuation Adjustment Mechanism; analyze the positive effects brought by the Minutes of the National Courts' Work Conference on Civil and Commercial Trials (hereinafter referred to as the "Minutes of the Ninth National Civil and Commercial Trials Work Conference"), and at the same time analyze its shortcomings. The simple handling of the judgment on the performance of the Valuation Adjustment Mechanism has led to damage to business purposes. It is recommended to start from the principle of capital maintenance and the solvency of the enterprise to achieve a balance of interests among investors, creditors and the company.

Huiming He, Qingwei Li. The Interpretation of the Interest Balance Mechanism of Valuation Adjustment Mechanism—Reflection on the Identification of Valuation Adjustment Mechanism in the Minutes of the Ninth National Civil and Commercial Trials Work Conference. International Journal of Business Management and Economics and Trade (2024), Vol. 5, Issue 1: 57-71. https://doi.org/10.38007/IJBMET.2024.050108.

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