IVS General Standards Improvement Project
In 2023 the IVSC will launch a public consultation on proposed changes to the International Valuation Standards (IVS). In addition to proposed updates to the asset-specific standards covering Tangible Assets, Business and Intangibles, and Financial Instruments, the consultation will also outline a series of fundamental changes to the General Standards (Now IVS 100 to IVS 106), which are applicable to all valuations, regardless of asset type and valuation purpose. This part of the consultation is being referred to as the General Standards Improvement Project, and will propose changes to the way the General Standards section is set out, with the aim of making the standards clearer for both valuers and for others involved in the valuation process.
The work is being led by the IVSC’s Standards Review Board. In addition to a twelve-week consultation scheduled to start in April 2023, the SRB will also host webinars and virtual roundtables to provide updates on the project and to enable feedback.
IVSC Technical Director, Alexander Aronsohn, who is working with the standards boards to prepare and consult on the Exposure Draft, makes the following statement:
“Valuation is a process and there are many stakeholders involved in that process, beyond the valuer, in order to produce IVS-compliant valuations. These stakeholders include specialists (e.g. somebody that is an expert in an aspect of the asset being valued), service organisations (e.g. those who provide additional data and indexes for the valuation such as prices, comparable evidence and market information).
Historically, the IVS have been drafted with a focus on the valuer, providing internationally-agreed, principles-based standards for valuers to apply. With the latest update, the standards will become more relevant to non-valuers involved in the valuation process and will help to empower all those involved in an IVS-compliant valuation.
Additionally, valuation does not work in isolation and may also need to meet the requirements of other standards, such as IFRS when providing Fair Value. As a result, the IVS General Standards have also been updated to aid compatibility with other standards and requirements such as the International Financial Reporting Standards (IFRS), U.S. Generally Accepted Accounting Principles (USGAAP) and the requirements placed upon securities regulators, for example relating to ‘challenge and review processes’, under the auspices of the International Organization of Securities Commissions (IOSCO).
Further to the last agenda consultation in 2020, where we advised that we would be including additional standards on ‘data and inputs’ and ‘models’ in IVS, and additional market engagement, plus revisions to IVS 500 – Financial Instruments, we have also made some consequential amendments to futureproof the standard and ensure it meets market needs.
IVS General Standards Improvement Project – indicative timeline
- April 2023 – IVSC will publish an Exposure Draft outlining proposed updates to both the General Standards (as part of the General Standards Improvement Project) and the asset-specific standards. This consultation will last for 12 weeks and further details of how to respond will be published alongside the Exposure Draft on the IVSC website.
- April-June 2023 – IVSC will organise a series of webinars and roundtables to present details of the Exposure Draft. These sessions will be open to all.
- January 2024 – subject to the responses received to the consultation, IVSC will publish an updated version of IVS in January 2024.
- July 2024 – The new version of IVS will become effective after a six-month familiarisation period. However, as with previous updates to the standards, early adoption will be encouraged.
Further details of the General Standards Improvement Project and the Exposure Draft consultation period will be published on the IVSC website in early 2023.