The Independent Chip Model attempts to value your stack of chips in a tournament. All sorts of factors are taken into account to determine this, such as your chip stack size, the overall chips in the tournament, the chip stacks of the other players, the total money to be won and the payout distribution. But keep in mind this is a model of the value so it doesn't calculate the actual value of your chip stack, that is still dependent on where you actually place in the tournament.
As you know in most tournaments the chips you hold arent worth money directly. The bigger the stack you hold and the better a chance you have of ending in the prize money, so you could say that bigger stacks are worth more, but how much more what is your equity (share) in that prizepool?
In easy terms at the start of a tournament when everyone has equal stacks, each person's stack will be worth an equal proportion of the prize pool. So $100 prizepool with 10 players, will all have a chip stack value (your equity) of $10. As play continues and the stacks vary so will your equity in that prizepool.
If the tournament pays out 100% to the first place player, then calculating the value is very easy, it is the TotalPrizePool*(YourStack/TotalChips) in other words an equal proportion of the prizepool to the proportion of chips you own.
It gets much tougher to determine your equity when your payout structure isnt 100% to the 1st place. For instance 70% to 1st, 20% to 2nd and 10% to 3rd makes the calculation quite challenging, so we would suggest you use an ICM calculator such as can be found here -
http://www.thepokerbank.com/tools/pokerbank/chimp/
