Carried interest valuation refers to the process of determining the value of the share of profits received by general partners in investment funds, such as private equity or hedge funds. This interest is typically earned after the fund reaches a specified threshold return, known as the hurdle rate. The valuation process involves assessing the potential future cash flows, market conditions, and fund performance. It is crucial for tax purposes, financial reporting, and investment decisions. Accurate carried interest valuation requires a thorough understanding of fund structure, performance metrics, and complex financial modeling to estimate the interest's true worth.