IVSC proposes major revisions to valuation standards

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03 Jun, 2010

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 significant changes to IVS proposed in the ED:

Existing IVS

Proposed new edition

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


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

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Comment deadline is 3 September 2010.


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