Fez Hoodbhoy, ASA
Director, Deloitte Financial Advisory
Abstract: The International Valuation Standards Council (IVSC) was established to create globally recognized valuation standards for all types of assets around the world. This article presents a brief overview of IVSC history, presents the key changes for the January 2024 edition, and discusses how changes have been received by the global valuation community and other stakeholders.
In 1981, 20 national valuation professional organisations founded the IVSC as The International Assets Valuation Standards Committee (TIAVSC). Over 4 decades later, IVSC has more than 170 member organisations including nearly 70 professional valuation organizations, including ASA. The IVS are referenced and used by valuers in more than 100 countries.
Before IVSC, the global financial market lacked a common framework for valuation practices. Every country has its own set of valuation standards, making it challenging for investors to compare the market values of various assets.
Collaborating with leading financial experts worldwide. IVSC developed a comprehensive set of standards covering all asset classes and sectors. These globally recognized valuation standards— applicable to every type of asset in every part of the world—ensured that all assets were valued consistently across all markets, providing investors with transparency and enabling them to make informed decisions. In addition, IVSC established standard guidelines for valuation professionals, ensuring that all valuations were conducted according to globally recognized best practices.
As a result of the IVSC's efforts, the global financial market became more transparent and trustworthy. Investors had confidence in the valuations of various assets, which led to greater investment and growth in global financial markets.
Late last year, the International Valuation Standards Council (IVSC) announced a major update to its global standards. This update, which concludes a two-year revision journey, including a three-month global consultation period from April to July 2023, addresses the changing landscape of the global economy, as well as emerging technologies and new types of assets.
The IVSC worked closely with stakeholders worldwide, including valuation professionals, regulators, investors, and others, to ensure that the updated standards would be relevant, practical, and effective.
The 2024 IVS edition will include new standards for intangible assets, updated guidance for real estate valuations, revised definitions of fair value and market value, and new guidance on technology in valuations.
IVSC states that the “changes enhance the standards’ relevance and utility for all parties involved in valuation, extending beyond valuers alone.”[i] Certain changes, however, such as the General Standards sections, applicable to all valuations, which “have been thoroughly updated to better align with the typical valuation process,” are especially applicable to appraisers of all disciplines. All appraisers, and any reviewers working within the global valuation community, will want to investigate these changes:
The 2024 edition will also feature improved navigation and integrated digital tools; IVSC states that this will be “the most accessible and intuitive IVS to date.” IVSC will be offering a series of complimentary webinars addressing the updates; details will be available on the IVSC website.
[i] All quotes from IVSC Standards Review Board Ratifies New Edition of International Valuation Standards (IVS), IVSC, December 5, 2023, https://www.ivsc.org/ivsc-standards-review-board-ratifies-new-edition-of-international-valuation-standards-ivs/
The January 2024 updates are widely praised by the global valuation community, who recognize the IVSC's efforts to keep pace with a rapidly evolving world. The new standards provide greater clarity and consistency in valuation practices and allow for greater flexibility and innovation.
These updates were widely praised for providing clarity and consistency, which would ultimately lead to more efficient and transparent markets. As a result of these updates, investors, regulators, and other stakeholders could have greater confidence in the integrity of valuations, which in turn could help promote more efficient and transparent markets, and ultimately lead to better outcomes for all involved.
With these updates, the IVSC continues setting standards for valuation practices worldwide and remains the go-to organization for anyone seeking guidance on valuations. IVSC standards are recognized and respected by financial institutions, governments, and investors around the world and the organization’s commitment to promoting transparency and consistency continues to help support a stable and secure global economy.
Faisel Hoodbhoy, ASA, CBV, CPA Canada, FCA, CF, is currently a Managing Director at Rosehood Global Financial, overseeing valuation, litigation support, and financial advisory services (FAS) in Toronto, Canada. He was previously Middle East Regional Partner of Deloitte LLP based in the Dubai International Financial Center (DIFC), head of Deloitte ME FAS, and director of valuation services at Deloitte Canada. With 30+ years of professional experience in North America, Middle East, and the UK, including NASDAQ Dubai, Fez has worked for Global Big 4 Firms including Andersen and EY and a variety of financial institutions. He is an active supporter of International Financial Reporting Standards (IFRS) and International Valuation Standards (IVS) globally. Email: faisel@rosehood.com