We comment on IVSC credit and debit valuation ED

  • Deloitte Comment Letter Image

03 Mar 2014

We have published our comment letter on the International Valuation Standards Council’s (IVSC) Exposure Draft (ED) ‘Credit and Debit Valuation Adjustments’.

We are concerned that the objective of the fair value measurement of credit risk is not clear. We believe that any guidance issued should state the valuation objective and that this objective should be valuation for financial reporting purposes, whilst acknowledging that valuation for other purposes exist and may result in the application of different valuation approaches. We also are concerned who the primary beneficiary would be. Large financial institutions will have limited use for the guidance in the ED, while, non-financial institutions appear not to be the target of the ED.

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