Valuation for Financial Reporting
Valuations have a significant impact on a company’s financial performance and in recent years there has been increasing concern amongst regulators about not only the quality of valuation estimates provided by management but also the degree of scrutiny of those estimates during the audit process.
The IVSC has published a guide aimed at raising awareness of audit procedures among professional valuers, to help ensure that the service they provide enables a company’s management to include high-quality valuation estimates in their financial statements and an auditor to adequately assess those estimates.
Greg Forsythe, Chairman of the IVSC Professional Board, explains that the increased scrutiny of regulators on valuation issues was a key reason for producing the guidance:
"The IVSC’s new guide has been developed to assist professional valuers operating in the financial reporting arena, either when engaged by a reporting entity or an auditor, in gaining a greater understanding of the audit process. By ensuring that the initial valuation is fit for purpose, and that there is timely dialogue between all parties involved, many of the problems commonly identified by regulators can be resolved."
The guide has involved widespread consultation with professional organisations, valuation providers, preparers of financial statements and auditors. The guide is intended to be useful to many interested parties in the audit process relating to valuation estimates, including audit committee members.
The guide is available from the IVSC here
IVSC Annual Report 2012 -2013
We are delighted to bring you the IVSC Annual Report 2012-2013. The report provides a formal overview of the IVSC’s activities, together with audited financial statements. We also reflect upon and illustate the development of the IVSC in the five years since its restructuring, and look forward to the future under the Chairmanship of Sir David Tweedie.
The IVSC is available in a digital format and can be accessed directly here.
City of London Corporation to support IVSC in a five-year funding programme
The City of London Corporation has agreed a five-year funding programme to accommodate the International Valuation Standards Council (IVSC) in London. This support will further assist the IVSC in its mission to enhance confidence in the valuation process through the creation and maintenance of high-quality standards and guidance.
Mark Boleat, Chairman of the City of London’s Policy & Resources Committee, said: “The City of London is pleased to support the IVSC establishing its headquarter in the Square Mile. Financial innovation is the key for the City to stay ahead as the world’s international financial centre and we are acutely aware that there is a lack of national and international standards in valuation. The City supports international standard setters such as the IVSC in establishing a new benchmark which we hope will be rolled out across the world.
“This also fits with our continuous effort to ensure that international organisations related to financial services are located here in the City where practicable.”
Sir David Tweedie, IVSC chairman, commented: “Financial support by the City Corporation to the International Accounting Standards Board in its early years helped to establish London as the global centre for accounting standard setting. As the IVSC moves forward with its ambitious agenda to develop not only international valuation standards but also the professional infrastructure supporting the application of those standards, we would anticipate the same happening for the valuation profession. The IVSC is very grateful to the City Corporation for the support it is lending to the IVSC at this critical stage in the development of the organisation.”
IVSC Annual Report 2011 – 2012
We are delighted to bring you the IVSC Annual Report 2011 – 2012.
For the first time, the IVSC Annual Report is available in a digital version as well as in a pdf available for download.
The digital version is compatible with all devices and can be accessed directly here or via the IVSC website here.
A pdf version may also be downloaded here.
The IVSC is pleased to be a media partner for the Valuation of Financial Instruments (V-FI) London conference 2013.
After the great success of V-FI 2012, over 150 of Europe’s leading valuation figures will gather once again in May 2013. The conference will present over 45 expert valuations speakers including IVSC Standards Board member Paul Hawkes and offers fantastic networking opportunities at the evening cocktail reception.
IVS Improvements 2013
The Standards Board announced in June last year that it intended to review the current International Valuation Standards and, at its meeting in October, subsequently considered a number of possible changes. An Exposure Draft of the proposed changes has now been issued. The changes proposed include clarifying:
- the applicability of the Standards to valuation reviews;
- matters to be considered before relying on information provided by others; and,
- the need to identify the “unit of valuation”
The Exposure Draft can be downloaded from the IVSC website hereand comments are invited before 30 April. The intention is to finalise the amendments in July, and for the updated Standards to be effective from 1 January 2014.
IVSC Milan meetings
Nearly 100 delegates attended the IVSC meetings held in Milan on 24-27 October. The IVSC Standards Board, Professional Board, Advisory Forum and Board of Trustees all met prior to the 2012 AGM held on 27 October.
Sir David Tweedie was confirmed as Chairman of the IVSC at the AGM. In a short presentation he summarised the following:
Sir David knew of the IVSC from a distance during his time as Chairman of the International Accounting Standards Board (IASB) and his initial impression is that the IVSC is currently in a very similar position to that of the International Accounting Standards Committee (the predecessor to the IASB). The International Financial Reporting Standards that are issued by the IASB are now used in over 120 countries and the IVSC similarly has great potential for further growth and recognition.
Call to members
Sir David called on all IVSC members to make the commitment to adopt the International Valuation Standards – not changed or tweaked in any way – but as issued by the IVSC.
What makes the IVSC particularly interesting and challenging is the work it is doing in profession building – establishing a clearly identified valuation profession with common standards on education, training, ethics and discipline.
Moving on and up
The financial crisis has led to a much greater understanding of the importance of valuation. Building on this and the momentum the IVSC has generated since its restructuring in 2008, the IVSC Board of Trustees will form a Task Force of leaders from the regulatory and user community and influential members of the valuation profession. This Task Force will assist the IVSC to move rapidly forward and to achieve its twin goals of global valuation standards and a recognised international valuation profession.
Welcome to new IVSC new members
The following were elected members of the IVSC at the recent 2012 AGM bringing the number of organizations working together under the IVSC umbrella to 78, who now represent 53 countries:
Valuation Professional Organisation Members:
Association of Certified Appraisers in Bosnia and Herzegovina
Croatian Society of Valuers
Institute of Professional Auctioneers and Valuers Ltd, Ireland
Namibian Institute of Valuers
Abu Dhabi Municipality, Property Registration Section
Chamber of Professional Valuers, Bulgaria
Institute of Chartered Accountants of England and Wales
E-Valuations Istituto di Estimo e Valutazioni, Italy
Ministry of Economic Development of the Russian Federation
Ukraine Federation of Appraisers of Business and Intellectual Property
IVSC and IFAC Strengthen Collaboration
The International Valuation Standards Council (IVSC) and the International Federation of Accountants (IFAC) have renewed their Memorandum of Understanding (MoU), first signed in 2009.
The MoU creates a cooperation process to enable valuers and auditors to obtain a better mutual understanding of standards relevant to financial statements, and will help both organizations pursue their objective of maintaining confidence in business reporting in both the public and private sectors. Actions under the MoU are also designed to promote the credibility and acceptability of valuations prepared in accordance with the International Valuation Standards.
The MoU reflects the IVSC’s and IFAC’s shared conviction that the transparency provided by high-quality international standards contributes significantly to the effective functioning of capital markets and economic growth. The MoU acknowledges the ongoing working relationships between the IVSC, IFAC, and the International Auditing and Assurance Standards Board (IAASB), which is supported by IFAC. The MoU also anticipates closer working relationships between the IVSC and other IFAC activity groups.
International Valuation Standards Council welcomes launch of the French Federation of Valuation Experts
The French Federation of Valuation Experts recently admitted as a new member of the IVSC, had its press launch on 16 December 2010.
The FFEE is made up of the following organisations who, at the initiative of French financial market authority the AMF, began cooperating so that hitherto overlooked French expertise and best practices around valuation could be represented at the IVSC:
§ AFREXIM (French Association of Real Estate Experts)
§ APEI (Professional Association of Independent Experts)
§ IFEI (Francois Institute of Real Estate Expertise)
§ SFEV (French Association of Valuation Analysts)
Chairman of the FFEE, Dominique Ledouble, said:
“The creation of the FFEE is significant as it brings together practitioners and their respective organisations which had only intermittently been in touch until now.”
At the launch, Michel Prada, Chairman of the IVSC Board of Trustees and former President of the AMF, commented:
“I wholeheartedly welcome the establishment of the FFEE and its membership of the IVSC. It is important for the French valuation profession to participate in the development and application of international standards and practice guidelines that will contribute to the credibility and comparability of valuations.”