• Consultation launched: IVS 220 Non-Financial Liabilities
• Investor confidence boosted through new MSCI and IPEV guidance incorporating IVS
• German translation of IVS published - Internationale Bewertungsstandards 2017
• What will the new Philippine Valuation Standards mean for international competitiveness?
• Internationalisation drives growing demand for IVS in China
• Singapore to host IVSC AGM 2019, 7-9 October
• New and proposed IVSC members
• Dates for your diary
• Download IVS online

Global investors in particular rely on high-quality and comparable valuation data when purchasing and disposing of assets. Valuations which are carried out to international standards by qualified professionals help to de-risk markets and support business and investment decisions. Last year IVSC spoke to Union Investment's Chief Investment Officer, Martin Brühl, to understand the importance of valuation consistency to his business, which invests in more than 20 countries throughout the world. 

Given the importance of valuation quality to these stakeholders, news that two major sources of insight industry - MSCI and IPEV - have adopted IVS will bring comfort and reassurance to investors. 

MSCI is acknowledged as a leading source of research-driven insight for institutional investors and produces indices which are relied on as a source of data. In their recently published guidelines, MSCI have recommended that all property asset valuations should be undertaken in line with IVS:

"MSCI has always aimed to utilize only those valuations which are predicated upon open market principles, in order to produce like-for-like international comparisons of investment performance. However, there have historically been a number of different area-specific valuation or appraisal standards, adopted within national markets and prepared by local valuation bodies. The International Valuation Standards Council (IVSC) was formed in 1981 to develop international technical and ethical standards for valuations to support the regulation of financial markets. In 2014 the IVSC and IFRS Foundation agreed a statement of protocols for cooperation on International Financial Reporting Standards and International Valuation Standards, acknowledging their common interest in ensuring consistent measurement of Fair Value. MSCI has, therefore, adopted the IVSC valuation standards as the preferred basis for reporting capital and rental values for performance measurement purposes."

The International Private Equity Valuation (IPEV) Guidelines provide high-quality, uniform, globally-acceptable, best practice, principles-based valuation guidelines for private equity and venture capital practitioners in order to assist their compliance with accounting and regulatory requirements. Highlighting the importance of common international standards the IPEV Valuation Standards have been updated:

"Global valuation standards continue to evolve. The IPEV Board has entered into an understanding with the International Valuation Standards Council (IVSC) with the objective of promoting consistency between the IPEV Board’s Valuation Guidelines and the IVSC International Valuation Standards (IVSs) and to enable these Valuation Guidelines to be positioned as providing sector specific application guidance of the principles in IVS. A valuation of Private Capital Investments prepared in accordance with the IVSs and following these Valuation Guidelines will be consistent with the requirements of applicable financial reporting standards and will also maximise investor’s trust and confidence."

Both examples of IVS adoption are helping to advance the role of valuation quality and professionalism among global investors. 

As part of an ongoing programme of translations, IVSC is pleased to announce the publication of IVS in German.  The translation, which has been led by German Valuation Professional Organisation, Hypzert, ensures IVS is accessible to German valuation professionals and their clients. 

Hypzert will make copies available to their members, with more information available on the Hypzert website. A copy of the German translation is also available to IVSC members through the IVSC members' portal.  

 

 

In December, the Philippines Government published an update to the Philippines Valuation Standards (PVS) bringing it in line with the International Valuation Standards at a time when foreign direct investment into the country is growing rapidly. Summarising a decade of developments in a recent article for Business World, Professor Ramon L. Clarete of the Philippines School of Economics asks whether enough is being done to ensure confidence and trust in the valuation profession.

Property valuation services: Are we losing international competitiveness?


By Ramon L. Clarete

An important lesson of the 2008 global financial crisis is that unstable real estate markets can bring down the global economy. Corollary to that, they can deprive an emerging economy with financing, stunting investments and economic growth.

The Philippines has enjoyed impressive economic growth in the last six years. Sustaining that growth to at least 7% annually requires, among other things, adequate financing of investments. But without sound property valuation practices, it would be difficult to ensure the right flow of credit into the economy in order to mitigate lending risks.

Appropriately regulated and managed real estate markets are needed to sustain strong economic growth. Keith Lancastle, CEO of Appraisal Institute of Canada, described how strong property valuation fundamentals helped Canada’s economy weather better the global crisis in 2008.

Read the full article here

China has seen phenomenal growth over recent years and while there has been a definite slowdown more recently, GDP still grew at a very healthy 6.6% in 2018. Last year the Chinese Government unveiled long-anticipated easing of foreign investment curbs on sectors including banking, agriculture, automotive and heavy industries, leading to a significant uplift in the flow of foreign capital into these sectors, as well as a rise in the number of foreign firms setting up operations in China.
 
Valuation is an incredibly important professional discipline in China, both in terms of supporting inward investment into the country and, increasingly, significant outflows of capital from government and private sectors through M&A activity and initiatives such as “One Belt, One Road”.
 
In the context of these trends, there is a significant and growing importance attached to the role of the valuer, both for state and privately owned assets. With this in mind, China continues to be an important country for the IVSC. The China Appraisal Society (CAS) has long been an IVSC sponsor and leading authority on valuation professionalism in the country. In addition to providing direct input to the IVSC through participation in boards, CAS is also ensuring the delivery of courses which help to promote international standards and empower valuation professionals with the training and knowledge they need to apply this best practice day-to-day. The IVSC also have corporate members Shanghai Orient Appraisal Co Ltd headquartered in Shanghai and Greater China Appraisal Ltd based in Hong Kong. Both of these firms are supporting efforts to develop and promote international standards through their work with domestic and international clients alike.
 
At the beginning of the year, thanks in large part to CAS’s facilitation, I met with numerous valuation leaders in Beijing and was encouraged by the dynamism and focus on being globally relevant. Meetings included the key leadership from CAS as well as new contacts within the main Real Estate Appraisal organisation CIREA (China Institute of Real Estate Appraisal). Both organisations have a strong approach to qualifying and regulating their respective valuers. I also had the pleasure of meeting the leaders of many major appraisal companies - Pan China Appraisal, China TongCheng Assets Appraisal, China United Assets Appraisal Group, China Enterprise Appraisals, China Alliance Appraisal and Zhonghe Appraisal. I was impressed by the collective commitment to enhancing valuation professionalism and by the level of engagement with international clientele already in place. These companies certainly see the value of a globally relevant approach. I look forward to meeting the other leading appraisal companies in the near future.
 
From Beijing I went on to Hong Kong where the focus was on Business Valuation and a further roundtable where we are working with other members, regulators and stakeholders to define the right approach to standards and professionalism for this key financial centre.

IVSC Chief Executive, Nick Talbot, held meetings with valuation leaders during a visit to China in January
 

Our 2019 AGM will take place in Singapore from 7-9 October.  Hosted by the Singapore Accountancy Commission, the AGM will take place alongside one of Asia-Pacific’s leading valuation conferences (10-11 October), with attendees offered the opportunity to join both. Social and networking events are also planned for delegates and their guests.
 
Last year, more than 150 business, valuation, investment and government leaders attended our AGM in Dubai and this year we are looking forward to welcoming over 200 senior leaders and influencers to one of the most dynamic and international cities in the world. 
 
Registration for the AGM and conference will open in February, with further details published on the IVSC website.  A finite number of sponsorship packages will also be available and interested parties should contact rstokes@ivsc.org for more information.

** The IVSC is seeking expressions of interest from prospective hosts of the 2020 AGM, with a preference for a host city in the Americas **

The IVSC is pleased to welcome the following new members (as proposed in December):

The following applications were received and approved by the Membership Committee: 

• Brand Finance - Corporate Member

If you have any comments regarding proposed members, please do so by emailing us within 4 weeks via contact@ivsc.org
 

Subscribing to IVS Online gives you access to the latest IVS standards and publications, including translations produced by Valuation Professional Organisations.

**Please note that if you are a sponsor organisation of the IVSC then access to IVS online is free of charge with the code provided. IVSC member organisations will receive an electronic copy of IVS.**

Click here to find out more.