Concurrently the IVSC is engaged in a project to modernise its own organisational structure (see our News Story of 19 April 2007
). The report on IVSs, titled Review of the International Valuation Standards
(PDF 128k), sets out the review group's views on the format of an 'ideal' set of international valuation standards. The report raises a number of specific questions on which views are sought (see below). The comment deadline is 31 October 2007.
Issues on which IVSC is seeking comment
The Group recommends that the IVS be principles-based and interprets this as meaning that the standards should contain the requirements to be complied with together with essential explanatory material to make the requirements understandable by an experienced professional valuer. Do you agree with this recommendation?
Valuations are performed in a variety of contexts – from financial reporting, lending purposes, business acquisitions to tax and litigation services. The Group believes that the same concepts, definitions and principles apply to all valuations whatever their purpose although there may be differences in their application and reporting. Do you agree with the Group?
The Group believes that the primary role of the IVS is as a body of international standards in their own right to meet the needs of the global market place and to provide a basis for the convergence of national standards to international valuation standards. It therefore recommends that the IVS should not cover areas that are still subject to significant national regulation, for example valuation for taxation purposes.... Do you agree with the Group?
The Group acknowledges that different jurisdictions will take different routes to the same destination of a single set of global valuation standards. While this is understandable, the Group recommends that the IVSC should seek to introduce a similar requirement to that of the International Financial Reporting Standards; i.e. that valuation reports should not be said to comply with IVS unless they comply with all the requirements of IVS. Do you agree that the IVSC should introduce such a requirement?
Do you agree that the proposed structure for the IVS will provide for clear navigation through the standards to determine the valuation and reporting bases for a particular asset/liability and purpose?
A number of specific questions have been raised by the Group on the proposed structure for the IVS on which comment is sought:
Questions 7 and 8 [These relate to the format of IVSs and recommendations for clarity of the standards.]
- 6(a) The forthcoming eighth edition of IVS will define 'fair value' in International Valuation Standard 2 Valuation Bases other than Market Value. Do you consider that this is sufficient or should the IVSC develop a Standard on Fair Value as a separate basis of valuation?
- 6(b) The proposed structure for the IVS discusses the application of GAVP and the basis of valuation to specific asset and liability types before considering their application to the specific purposes of valuation. Some members of the Group believed that this order should be reversed. What are your views?
- 6(c) A number of topics have been proposed to be covered by additional more detailed guidance notes. Do you agree with the list? Are there other issues that should be considered?