January 2007: Restructuring of the IVSC is proposed
The IVSC has embarked on a proposed major restructuring process not unlike that undertaken by the International Accounting Standards Committee in the late 1990s that led to the creation of the International Accounting Standards Board. The restructuring proposals have been developed by a Governance Group established by the IVSC Management Board. The key recommendations of the Group are:
- That a new International Valuation Standards Board (IVSB) be created as an independent and autonomous decision making body with up to nine compensated (full-time or part-time) members. Concurrently, an International Valuation Standards Interpretations Committee would be created as an arm of the IVSB;
- That the IVSC be renamed the International Valuation Standards Council. It would remain a membership based organisation but the criteria for membership would be broadened beyond national professional valuation institutes to include valuation companies, national standard setters, users of valuations, academics and others. IVSC members would provide input to the IVSB.
- That an elected Board of Trustees would have responsibility for oversight of the work of the IVSC and IVSB. Responsibility would include appointment members of the IVSB and Interpretations Committee, ensuring adequate funding and resources, and protecting the Board's independence and integrity.
- That a new International Valuation Professional Board (IVPB) be created to develop criteria for the education of and professional practices of valuation practitioners.
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The IVSC has invited comments on the proposals by 9 March 2007. A special meeting of the IVSC will be held in San Francisco on 12 April 2007 when member bodies of the IVSC will be asked to approve the restructuring proposals. If accepted, the proposed structure would come into effect on 1 January 2008. Click to download the Proposal for the Restructuring of the IVSC (PDF 579k).
April 2007: Restructuring of IVSC is approved
Members of the IVSC have voted unanimously to proceed with the restructuring of the organisation, as proposed in January 2007. The restructuring includes creation of a global valuation standards board. The new IVSC structure will be "similar to the IASB model where the Standards Board is the focal point or the heart and soul of the organisation rather than an organisation of valuation organisations". There will also be an interpretations committee and a management board of trustees entrusted strictly with the management and financial health of the organisation.
July 2007: Views sought on format of International Valuation Standards
The IVSC has issued for comment the report of a group brought together to undertake a critical review of the structure and format of International Valuation Standards (IVS). Concurrently the IVSC is engaged in a project to modernise its own organisational structure (see above). 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:
Question 1
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?
Question 2
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?
Question 3
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?
Question 4
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?
Question 5
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?
Question 6
A number of specific questions have been raised by the Group on the proposed structure for the IVS
on which comment is sought:
- 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?
Questions 7 and 8
[These relate to the format of IVSs and recommendations for clarity of the standards.]
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November 2007: IVSC moves forward with restructuring
In November 2007, the IVSC board and membership approved a comprehensive restructuring that will enable it to become an independent standard setting organisation that can develop International Valuation Standards for assets and liabilities. The IVSC had proposed the restructuring in January 2007 (see above).
Key features of the IVSC restructuring plan are as follows:
- IVSC remains a non-profit organisation incorporated in United States.
- IVSC acronym is retained but the name changed to the International Valuation Standards Council.
- The organisation will have three main bodies:
- A Board of Trustees responsible for the strategic direction and funding of the IVSC.
- A Standards Board appointed by the Trustees, but with autonomy over its agenda and the creation and revision of standards.
- A Professional Board appointed by the Trustees to assist in the development of high quality practices by the world's valuers and development of the profession in developing countries.
- Membership of the IVSC will be broadened beyond national professional valuation institutes to include valuation companies, government, valuation end-users, and academia.
- Current IVSC directors remain in post for the transitional period November 2007 to May 2008, with responsibility for day to day management of the IVSC.
- During the November to May period, an advisory board, to be known as an interim Board of Trustees, will be established to oversee the IVSC restructuring process and business plan. Funds raised will be independently controlled by the group and released in accordance with the IVSC restructuring proposal. Michael Sharpe, former Chairman of the International Accounting Standards Committee, will be a Trustee. Mr Sharpe was also a member of IASC's Strategy Working Party that developed proposals leading to the creation of the IASB.
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Click for IVSC Announcement (46k).
February 2008: IVSC announces interim board of trustees
On 14 February 2008, the International Valuation Standards Committee announced its interim board of trustees that will oversee the restructuring of the IVSC. The restructuring was announced in November 2007 (see above). The restructuring will transform IVSC into an independent standard setting organisation that will develop International Valuation Standards acceptable to the international capital markets. Here is the Press Release on Interim Trustees (PDF 82k).
November 2008: New valuation standards board is appointed
Over the past year, the overall structure for establishing International Valuation Standards (IVS) has been reorganised. Within the new structure – known as the International Valuation Standards Council (IVSC) – the International Valuation Standards Board (IVSB) is the new body that sets the standards for how to perform and report on valuations. The IVSB replaces the outgoing IVSC Standards Board. A second body in the new structure is the International Valuation Professional Board (IVPB). The IVPB's responsibilities are to promote the profession generally and to benchmark educational and professional standards for valuation. The members of the new IVSB and IVPB have just been appointed. Also, the outgoing standards board has prepared a transition memo to advise the new board of the status of its current projects and to make recommendations as to future projects and activities, including liaison with the IASB. Click for:
5 March 2009: New IVSC board of trustees
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On 4 March 2009, the International Valuation Standards Council announced the appointment of a new Board of Trustees, chaired by Michel Prada, formerly chairman of the French securities regulator, the Autorité des Marchés Financiers. The Trustees oversee the work of the International Valuation Standards Board, which develops global standards for performing and reporting on valuations, and the International Valuation Professional Board, which develops professional and educational standards for valuers. Click for IVSC Press Release (PDF 44k).
3 June 2010: IVSC proposes major revisions to valuation standards
The International Valuation Standards Council (IVSC) has published an exposure draft (ED) of proposed new International Valuation Standards (IVS). The ED would be the ninth edition of the comprehensive bound volume of IFRSs, with substantial changes from previous editions (see chart below). These standards cover valuations for most types of assets, including for the first time a proposed standard for financial instruments. The standards also reflect current developments in IFRSs. Here is an overview of some of the most signifiant changes to IVS proposed in the ED:
| Existing IVS | Proposed new edition |
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| Concepts Fundamental to Generally Accepted Valuation Principles (GAVP) | The generic valuation principles have been carried forward into the proposed IVS 101. Other material discussing market value and land and property has been merged into IVS 103 and IVS 303.01. |
| Code of Conduct | Removed. |
| Property Types | Not directly replicated. Some elements included in individual asset
standards. |
| Introduction to IVS 1,2,3 | Not directly replicated. Elements included in IVS 101,103 and 105. |
| IVS 1 Market Value and IVS 2 Other Bases of Value | Merged into new IVS 103. |
| IVS 3 Valuation Reporting | Principles carried forward into IVS 105. |
| IVA 1 Valuations for Financial Reporting | Now included in IVS 201.01 to 201.04. Material updated and
extended to reflect developments in IFRS. |
| IVA 2 Valuations for Secured Lending | Made specific to property and most material carried forward to IVS
202.01. |
| IVA 3 Valuation of Public Sector Assets for Financial Reporting | Title changed to reflect content and carried forward to IVS 201.05. |
| GN1 Real Property Valuation and GN2 Lease Interests | Elements carried forward and merged into IVS 303.01. |
| GN3 Valuation of Plant and Equipment | Updated and carried forward to IVS 302.01. |
| GN4 Valuation of Intangible Assets | This was replaced by a revised and extended GN4 published in
February 2010. This contained comprehensive guidance on intangible assets. The proposed new standard IVS 301.02 is based
on the revised GN4, but the more detailed guidance has been omitted. This will be incorporated into a future Technical Information Paper. |
| GN5 Valuation of Personal Property | It is not proposed to carry this forward into the new edition. The
definition of personal property in the existing standards is very broad and covers many asset classes that are now the subject of more specific standards. |
| GN6 Business Valuation | Updated standards for business valuation are in IVS 301.01 |
| GN7 Consideration of Hazardous and Toxic Materials | This is not a valuation standard and the topic is one of many topics that influence value. No others are highlighted in the current IVS. Not carried forward |
| GN8 Cost Approach and GN9 Discounted Cash Flow | These are discussions on valuation methods and do not meet the
criteria for inclusion in the standards. IVSC have working groups addressing these topics with a few to issuing updated Technical Information Papers |
| GN10 Valuation of Agricultural Property | Not being carried forward as it contains no valuation procedures
that differ from other property types. A new project on biological assets is proposed which may result in a new standard. |
| GN11 Reviewing Valuations | The scope and limitations on any valuation assignment are now covered generically in IVS 104. Not carried forward |
| GN12 Valuation of Trade Related Property | Updated and carried forward as IVS 303.04 |
| GN13 Mass Appraisal for Property Taxation | Not being carried forward as it contains no valuation procedures
that differ from the General Standards |
| GN14 Valuations of Properties in Extractive Industries | Not carried forward. A comprehensive project on valuations in the Extractive Industries is about to commence and will probably lead to a new standard.
| | GN15 Valuation of Historic Property | Carried forward as IVS 303.02 |
Click for:
Comment dealdine is 3 September 2010.
20 July 2010: IVSC Issues two documents for consultation
The International Valuation Professional Board (IVPB) of the International Valuation Standards Council (IVSC)
has released two documents for consultation:
Comments will be accepted until 30 September 2010.
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