Interview with Ben Elder, Chair of the IVSC Tangible Assets Board
The Tangible Assets Board met earlier this month, can you tell us what topics the Board discussed?
Ben Elder (BE): We had a great meeting earlier this month during which the Board looked at three main topics.
We first looked at the issues around social value and some of the challenges around non-market issues. That’s got quite some way to go but we had a really interesting debate about the future direction of this subject during our recent meeting. There will be lots more to come in this area!
We then looked at personal property, arts and antiques and investigated some of the challenges around replacement costs versus compensation, in other words if you’ve got a Mona Lisa and it’s destroyed you can’t replace it, so it’s a compensation issue rather than a replacement. The board is looking at if and how some standards might be brought into those processes, and particularly to challenge money laundering and criminal activity which appear to abound around personal property, arts and antiques.
Thirdly, we looked at the harmonisation process which is currently underway between the US valuation standard (USPAP), the Canadian valuation standard (CUSPAP) and IVS. Specifically the board was looking at how we could achieve greater alignment in language and the words and definitions across all three standards. We’re pretty confident that the meanings are the same, but actually if we could harmonise the words it would bring the valuation profession even closer together.
Social value is something the board has highlighted before now and it has come up in the agenda for this meeting. What is ‘social value’ and why is it important?
It’s a really challenging area. It’s looking at the ways property and land are used in a social context. So, for example, a park in a city is a great asset for the people that live or work around it. It might have a lower value per square meter of land than, say, a development plot, but it adds value to the environment, to communities and to the wellbeing of society. The question of social value, then, is how you capture some of those important non-market considerations. It also interacts with things like air quality and other issues which are themselves very challenging in urban areas, and it ties back to the UN Sustainable Development Goals and how we capture and measure issues which aren’t readily portrayed in the market into investment criteria. It is a challenging area when it comes to standard-setting but there is no doubt whatsoever that it is extremely important and something we have within our power to influence positively.
You’ve referred to the harmonisation of IVS, USPAP and CUSPAP; can you give us an indication of what your hopes and expectations are around this process over the next 12 months?
This is a really important piece of work. As I’ve mentioned already, there is a general acceptance today that the principles laid out in all standards documents are broadly the same or similar, we just want to get to a point where we have a single and high-level standards articulation which reflects the international nature of the profession today.
To move things forward further still we have another meeting with our colleagues at the Appraisal Foundation (US) and the Appraisal Foundation of Canada scheduled for the end of May and we hope we can continue the collaborative process of working towards the use of the same words for our standards. The IVSC has partly addressed this through recent changes to the IVS, where we have sought to incorporate some new wording in places, bringing them fully in line with parts set out in USPAP and CUSPAP.
The board is looking to appoint up to three new technical experts later this year; what can you tell us about that process?
Yes, we’re looking to expand the board to capture further expertise. We have a really good board at present but we do feel there are some areas where we can deepen our breadth of knowledge with the appointment of up to three new experts. For example, we would like to see academics coming forward to join the board; also representatives from regions of the world where we are currently underrepresented, such as Latin America and Africa. That said, we are not looking exclusively for experts in these areas or geographies, the most important consideration is the level of expertise and desire to provide input to the standards-setting programme for the International Valuation Standards.
If anyone reading this is interested, or if they know others who might be then please do visit the IVSC website for more information.