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International Valuation Standards Council E-Newsletter

November 2014: Issue 67

Developing global valuations standards

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Dates for the diary APEC MOVES TOWARDS REGION-WIDE ADOPTION

Monday 23 March 2015 – Finance Ministers of the 21 member economies of the Asia-Pacific IVSC Standards Board Economic Cooperation (APEC) issued a joint statement at their meeting, London annual meeting in Beijing last month which expressed their support

for the relevant bodies to work with the IVSC in order to promote Tuesday March 24 2015 – sound valuation practices across the region. IVSC Professional Board meeting, London This is the very first time the need to address the current inconsistencies in valuation between countries has been formally Thursday 11 June 2015 – acted upon by one of the world's leading economic forums, whose IVSC Professional Board members account for nearly half of all world trade. meeting, London The joint statement means public and private sector organisations (date of the IVSC Standards will be encouraged to work with the IVSC to promote high quality Board meeting in June to be confirmed) valuation practices and professionals in their economies. The coordinated effort will also include the Asia-Pacific Business w/c 12 October 2015 – Advisory Council (ABAC), valuation professional organisations, IVSC AGM and associated experts from industry and other relevant bodies. Board meetings will be held during the week in Paris

The need for valuation standards has been gathering momentum Meetings of the Professional in the region, with ABAC's 2014 report to the Finance Ministers and Standards Boards are open to observers, subject stating: "Valuations are central to decision-making within the global to prior registration via the economy, applying both to capital and property market decisions IVSC website. and to decisions and actions in public and private sector Forward this email organizations, including regulatory organizations. The public to others who may be interested. interest, economic growth and development of financial systems Please feel free to contact us with any queries you may are impacted in a multitude of ways by decisions and actions that have or visit our website. are dependent on valuations."

A copy of the full press release is available here.

LANDMARK MOU SIGNED AT IVSC 2014 AGM

In a very significant step forward, 19 of the world's professional valuation organisations signed a Memorandum of Understanding at our 2014 AGM. In doing so, they committed to either adopt, or declare that their own standards are in compliance with, the International Valuation Standards within the next three years.

Sir David Tweedie, IVSC Chairman, commented: "This MOU which is signed by some of the biggest professional valuation bodies in the world means that these institutions are committed to the development of international standards which value assets in conformance, irrespective of where they are located. This is a landmark achievement and represents a major step towards getting global adoption of international valuation standards."

A copy of the press release listing the 19 organisations that signed the MoU is available here.

All valuation professional organisations in membership of the IVSC have been invited to sign the MoU. If your organisation has not yet signed and you have any questions about the process, please contact the IVSC Technical Director, Chris Thorne via email.

AGREMENT WITH APPRAISAL FOUNDATION UPDATED

Also in Toronto the IVSC signed a MoU with the Appraisal Foundation of the USA. This memorandum updates a 2006 agreement for the two organisations to cooperate on standard setting, and sets out a pathway that should lead to any remaining material differences between the Uniform Standards of Professional Appraisal Practice and the IVSs disappearing over the next three years.

IVSC WELCOMES NEW BOARD MEMBERS

New appointments to the IVSC Boards took effect following the IVSC's 2014 AGM:

Board of Trustees:

 Mark Gerold, Director, Valuation and Business Modelling EY (UK) and Chair of RICS Global Valuation Board  Christian Mouillon, Global Vice Chair – Risk Management, EY (France)  Tatsumi Yamada, Partner, KPMG AZSA and head of IFRS, KPMG Asia Pacific (Japan)

IVSC Professional Board:

 Eleanor Joy, Associate Partner at PwC (Canada) and former Chair, Canadian Institute of Chartered Business Valuators  C K Lau, Director at JLL (Hong Kong)  Eric Teo, Executive Director, Transaction Advisory Services at EY (Singapore) and CEO, Institute of Valuers and Appraisers of Singapore

IVSC Standards Board

 Leigh Miller, National Director and Americas Director of EY LLP's Valuation & Business Modeling Practice (USA)  Andreas Ohl, PwC Transaction Services Valuation Measurement Leader at PwC (USA)  Andrew Renshaw, Lead Director of Valuation and Advisory Services at JLL (UK)

IVSC MEMBERSHIP CONTINUES TO GROW

Three new organisations were admitted into membership of the IVSC at the 2014 AGM:

 The Chamber of Valuation of Republic of Macedonia was admitted as a Valuation Professional Organisation member.  The Australian Valuers Institute and the Council of Valuers, Eurasia were admitted as Institutional members.

HOW IMPORTANT IS INDEPENDENCE?

During the summer of 2014 Voltaire Advisors undertook a survey of over 200 financial firms, primarily from the buy side, to find out more about their approach and attitude towards valuations. One of the questions asked respondents to rank seven attributes they would expect in valuations provided by a third party. The interesting and potentially contentious result was that "independence" only ranked fifth, behind factors such as quality and reliability. The survey, and other interesting articles about valuations of financial instruments can be found in Voltaire Advisors' Valuation Risk handbook, which can be downloaded free from here.

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