The Professional Board was given the task of reviewing the previously issued GN8 The Cost Approach for Financial Reporting and updating the advice to reflect the new format and other changes that the Standards Board was making to the IVSs as part of the IVS Improvements project. It was agreed that this guidance would take the form of a Technical Information Paper (TIP).

The Board agreed that the scope of the new TIP should be confined to tangible assets, primarily real property, plant and equipment. Although methods under the Cost Approach are used for valuing other types of asset, these are the subject of other projects.

An Exposure Draft was published in February 2011, with a comment period until 31 May. 25 comment letters were received. In finalising IVS 230 Real Property Interests, the Standards Board received representations that a near final draft of that standard had described the application of the cost approach in a way that appeared to contradict the way in which it was used by North American real property appraisers. The Standards Board made alterations to remove the apparent conflict from the standard, but referred the comments received to the Professional Board to deal with in the development of the TIP.

During its redeliberation and consideration of the comments received, the Professional Board established that the apparent contradiction did not involve a difference of principle but arose from the application of the Cost Approach to different assets for different purposes. In North America it is routinely used as a cross check on the value of new or recently completed construction derived by another approach. In the rest or the world it is more usually applied to specialised property where the market or income approaches cannot be reliably used. The Board agreed alterations to the emerging TIP that reconciled these different applications with the fundamental principles.

The TIP was approved in January 2012. and published in April 2012. It may be purchased from the IVSC Bookstore or by subscribing to IVSonline.

Working Group:

Board members


Roy Farthing

Professional Board

Bob Connolly

Standards Board

Simon Landy

Standards Board

Tom Boyle

Standards Board

Brad Wagar

Professional Board

External Members



Chengjun Wang

China Valuer International Co Ltd

Peoples Republic of China

Larry Dybvig

Grover Elloitt


Nicholas Hawkes

GVA Grimley

United Kingdom

Alexander Lopatnikov

American Appraisal Associates


Mark Edwards

Grant Thornton


Start Date: June 2010

Exposure Draft: February 2011

Comment period ended: May 2011

TIP approved: January 2012

TIP published: April 2012

End Date: Q4 2011