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The Bloomberg Billionaires Index is a daily ranking of the world’s 40 richest people. In calculating net worth, we strive to provide the most transparent estimates available. Each Bloomberg Billionaire profile contains a detailed analysis of how that person’s fortune has been tallied.

The index is a dynamic measure of the world’s wealthy based on changes in markets, the economy and Bloomberg reporting. Each net-worth figure is updated every business day at 5:30 p.m. New York time. Stakes in publicly traded companies are valued using the share’s most recent closing price. All numbers are in U.S. dollars at current exchange rates. Private companies are valued in several ways, such as by comparing the enterprise values or price-to-earnings ratios of similar public companies. The criteria used depends on the firm’s industry and size. Estimates of private company debt are based on comparable peers.

When ownership of private assets cannot be verified, they aren’t included in the calculations. The specific valuation methodology for each private company is included in the net- worth analysis section of a billionaire’s profile. (The full profile is available only to Bloomberg Professional subscribers.)

A liquidity discount of 5 percent is applied to most private companies where assets may be hard to sell. We have noted when a different percentage has been used. No liquidity discounts were used in calculating values of public stakes. In some instances, we also apply a country risk discount based on a person’s concentration of assets and ease of liquidating them in a given geography. A country’s risk is assessed based on Standard & Poor’s sovereign debt ratings.

Dividends Included

Net-worth estimates include dividend income paid and proceeds from the sale of public and private shares. In cases where the majority of a fortune is derived from private companies, estimated dividends are calculated only if historical net income information is available.

We deduct taxes based on prevailing income, dividend and capital gains tax rates in a billionaire’s country of citizenship or residence. Taxes are applied at the highest rate unless there is evidence to support a lower percentage.

For estimates of cash and other invested assets, we have applied a hybrid return based on holdings in cash, government bonds, equities and commodities.

We try to identify and confirm all potential liabilities. No assumptions are made about personal debt.

Family members often hold a portion of the billionaire’s assets. Such transfers don’t change the nature of who ultimately controls the fortune. As a result we operate under the rule that all billionaire fortunes are inherently family fortunes.

Bull and Bear Scenarios

Each billionaire or his or her representative has been given an opportunity to respond to questions regarding the net- worth estimate, including assets and liabilities.

Bloomberg News editorial policy is to not cover Bloomberg LP. As a result Michael Bloomberg, the founder and majority owner of Bloomberg LP, won’t be considered for this ranking.

Because calculating net worth requires a degree of estimation, we have provided bull and bear case scenarios that would make a person’s fortune higher or lower than our estimate. A confidence rating also is included on each profile.

5 Star - The majority of the individual’s fortune is held in publicly traded companies. The billionaire or their representatives provides insight on the net-worth calculation.

4 Star - The majority of the individual’s fortune is held in publicly traded companies or private operations in a country where transparent data is available. The billionaire may hold shares through a holding company where ownership is not transparent. The billionaire or their representatives may provide insight on the net-worth calculation.

3 Star - The majority of the individual’s fortune is held in private companies, or public companies based in a country where transparent information is often unreliable. The billionaire or their representatives won’t comment on the net-worth calculation.

2 Star - The majority of the individual’s fortune is held in private assets. Often more than half of the calculation is based on an estimation of cash and other outside investments. The billionaire or their representatives won’t comment on the net- worth estimate.

1 Star - The majority of the individual’s fortune is held in private assets where limited information is available. Often almost all of the calculation is based on an estimation of cash and other investable securities. The billionaire or their representatives won’t comment on the net-worth estimate.

To contact the reporter on this story: Matthew G. Miller in New York at mmiller144@bloomberg.net

To contact the editor responsible for this story: Matthew G. Miller in New York at mmiller144@bloomberg.net