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ASA Files Comments With SEC on Proposed Rule Regarding Good Faith Determinations of Fair Value

Jul 22, 2020

The American Society of Appraisers (ASA), in a letter on July 21st to the members of the Securities and Exchange Commission, voiced its general support for a proposed rule that harmonizes existing fund valuation guidance and clarifies what is expected from boards and advisors when a market quotation is not readily available.

According to the proposed rule, the SEC has not updated fund valuation practices under the Investment Company Act since 1970. The proposed rule will update the framework and understanding to the Commission that boards and advisors should consult with a valuation specialist when in need of fair value determinations for hard-to-value assets.

ASA has demonstrated its commitment to quality fair value measurements through the development and implementation of the Certified in Entity and Intangible Valuations™ (CEIV) credential alongside AICPA and RICS. This furthers ASA’s long-held belief that credible fair value determinations are crucial to boards and advisors and should be performed by credentialed professionals. ASA will continue to educate valuation professionals to provide assurance to boards and advisors alike when determining asset values.

To read the full letter to the SEC, click here