IVSC working towards guidance on fair value of financial instruments

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12 May, 2011

The International Valuation Standards Council (IVSC) has issued the latest edition of its 'E-Newsletter', which includes an update on the IVSC's work on guidance for the determination of the fair value of financial instruments.

In 2009, the IVSC formed a Financial Instruments Expert Advisory Group (FIEAG) to assist in identifying valuation problems that the IVSC could include on its work plan. The FIEAG contributed towards the production of a high-level standard specifically on financial instruments (IVS 250), which will be published in June 2011.

In addition, the IVSC has included two financial instruments projects on its work plan, which are likely to result in 'Technical Information Papers' (TIPs):

  • Financial instruments valuation methods – a high level overview of the principal valuation techniques used for valuing the main categories of over the counter instruments
  • Credit/debit valuation adjustments – an area in which there appears to be considerable divergence in practice.

The FIEAG also identified other potential projects on liquidity premiums, yield curve dislocation and model uncertainty. These projects are not currently included on the IVSC's work programme.

Click for IVSC E-Newsletter (link to IVSC website).

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