The International Valuation Standards Council (IVSC), the global standard setter for valuation practice and the valuation profession, and The Appraisal Foundation (TAF), the United States’ foremost authority on the valuation profession, are strengthening their collaboration.
The two organizations are working to harmonize any remaining differences between the IVSC’s International Valuation Standards (IVSs) and the Foundation’s Uniform Standards of Professional Appraisal Practice (USPAP).
Representatives from the IVSC’s Standards Board and the Foundation’s Appraisal Standards Board recently met to establish joint objectives and a long-term plan to collaborate and execute upon the Memorandum of Understanding (MoU) signed in October 2014, which stated that they would harmonize any remaining differences between USPAP and the IVSs. In their three year plan, the IVSC and TAF have agreed to give priority to this harmonization.
This will be accomplished, in part, through a document that will act to bridge the two sets of standards. Appraisers using this “bridge document” will be able to develop appraisals that are compliant with both the IVSs and USPAP. The core principles of both the IVSs and USPAP, however, will remain intact.
“The MoU has reinvigorated our long-term relationship between the IVSC and TAF,” says Sir David Tweedie, Chairman of the IVSC Board of Trustees. “We are now determined to capitalise on the wealth of expertise we have at our disposal in our common goal of establishing a globally accepted set of valuation standards. Bringing USPAP and the IVSs together is an extremely important step towards achieving this goal.”
Currently, no single set of global standards for estimating the value of assets has been comprehensively adopted across the world, meaning it can be potentially more difficult to accurately compare asset values when making investment decisions across borders.
Although many parts of the world have established successful valuation principles and standards, other regions are less developed in this respect, which can present issues of inconsistency to multi-national companies or investors.
Variations in global valuations can also result in many international businesses – such as banks and pension funds – finding it harder to fully understand the true value of their assets or underlying collateral across different countries and regions.
David S. Bunton, President of The Appraisal Foundation added, “We are delighted to move forward with the IVSC in an effort to converge our standards. Uniform valuation standards will have a transformative impact, providing the global business community with a firm understanding of the value of their assets, regardless of what country they are operating in.”