IVSC consults on recommendations of external review group

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22 May 2015

The International Valuation Standards Council (IVSC) has issued an engagement paper seeking comment and feedback on a number of recommendations and proposals that result from an external review of the IVSC. One of the recommendations had been that the IVSC should discontinue work on all its financial instruments projects until it has been ensured that they serve the public interest and fulfil a market need.

In November 2014, the IVSC Trustees commissioned an independent assessment of their organisation. To this end, an external review group was formed that submitted its final report in April 2015. The review group called on the Trustees to take rapid action to enhance the organisational structure and capabilities and to define its strategic direction. Key immediate priorities should be to improve the organisation's credibility among key stakeholders and improve the quality of its standards. Regarding technical recommendations, the review group stated that especially regarding the valuation of financial instruments, stakeholders and regulators had expressed the need for caution. Their concerns did not negate the need for standards in this area, but they emphasised the need for a well thought out approach. Therefore, the review group recommended:

Recommendation 4: The IVSC should withdraw current proposals and exposure drafts related to Financial Instruments and work to first bring key stakeholders together to agree on solutions that serve the public interest and fulfil a market need.

The IVSC Trustees now propose:

  • to discontinue work on its current financial instruments projects and to withdraw any existing proposals or exposure drafts;
  • to bring the various financial instruments stakeholders together in a series of roundtables to seek broad support on a direction to address issues regarding the development of financial instruments standards and potential solutions; and
  • to develop a conceptual framework for Financial Instruments valuation standards along with a detailed work plan to implement this initiative that reflect the input of the proposed stakeholder roundtable meetings.

The IVSC also considers setting up a permanent working group for financial instruments in addition to the permanent working groups on real estate and business valuation that had been recommended in the review group's report.

Comments on the IVSC Trustees' proposals and questions, which also include structural changes and the development of a robust consultation process with maybe looking at the IASB or the FASB as an example, are invited before 1 September 2015. Please click to access the following information on the IVSC website:

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