The latest edition of the International Valuation Standards (IVS) marks an important milestone towards harmonising valuation practice worldwide.
IVS serve as the key guide for valuation professionals globally and will underpin consistency, transparency and confidence in valuations which are key to investment decisions, financial reporting and finacial market stability.
IVS are the latest step in the IVSC’s mission to raise standards of international valuation practice as a core part of the financial system, for the benefit of capital markets and the public interest.
The Standards were drafted by the IVSC’s independent technical boards and published following an extensive consultation process involving Valuation Profession Organisations, regulatory authorities, other standard setting organisations, valuation service providers, individual professionals, valuation end users, and academics.
IVSC member and sponsor organisations are provided with digital copies of IVS. Non members/sponsors can access IVS through the IVSonline portal.
What do the International Valuation Standards cover?
IVS comprises five ‘General Standards’ and six ‘Asset-specific Standards’. The General Standards set requirements for the conduct of all valuation assignments including establishing the terms of a valuation engagement, bases of value, valuation approaches and methods, and reporting.
The Asset Standards include requirements related to specific types of asset valuation, including background information on the characteristics of each asset type that influence value and additional asset-specific requirements regarding common valuation approaches and methods used. The assets standards cover:
- Businesses and Business Interests (IVS 200)
- Intangible Assets (IVS 210)
- Plant and Equipment (IVS 300)
- Real Property Interests (IVS 400)
- Development Property (IVS 410)
- Financial Instruments (IVS 500)
The latest version of the Standards bring greater depth to the IVS, as recommended by member organisation, including the major accountancy firms and Valuation Professional Organisations.
Here are a few things you need to know about the latest version of IVS:
- Title: The year of publication is no longer included in the title of the standards. Instead, the ‘effective date‘ (the date at which the standards come into effect) will be clearly set out on the cover.
- Effective date: The latest IVS becomes effective from January 2020. However, the IVSC encourages early adoption from the date of publication. Valuers will need to make clear which edition of the IVS they are using when preparing a valuation report.
- New chapter: The updated IVS includes a new chapter, ‘IVS 220 Non-Financial Liabilities‘ as part of the intangible asset standards.
- Technical revisions: Updates also include the technical revisions consulted on throughout 2018 and 2019.
- Glossary: The IVS glossary has been updated to include new terms and to provide additional clarifications. These changes also reflect the IVSC’s ongoing efforts to align valuation standards, terminology and definitions.
- Notable updates: Other key updates have been introduced in relation to ‘development property’ (IVS 410), ‘limitations’ (IVS 102), and ‘valuation models’ (IVS 105).
- Access the latest IVS: The latest version of IVS is available to download from IVS Online.
- Changes from IVS 2017: A ‘red-line’ version of the updated IVS is also available for download, providing clarity on changes from IVS 2017.
- Why the changes? The Standards Review Board expects to publish a ‘Basis of Conclusions’ document, explaining the rationale for all updates to IVS, within the coming weeks.
- Translations: IVS is published by the IVSC in English. Translations of IVS are carried out by organisations including Valuation Professional Organisations and regulatory authorities. The IVSC will be working with these entities to support updates to existing translations.