International Valution Standards Council

International Valution Standards Council

U.S. Appraisal Standards and International Valuation Standards INTERNATIONAL VALUATION STANDARDS COUNCIL Presenters James Gavin, MAI, CRE, FRICS Managing Director RE Advisory Group, Duff & Phelps, LLC

Current Member Tangible Assets Board, IVS Thomas Boyle, MAI Chief Appraiser, U.S. Bank Former Standards Board Member, IVS Certified USPAP Instructor Bridge document series Harmonization meetings participant Disclaimer The views expressed at this webinar and in any accompanying documents are the

personal views of James Garvin and of Tom Boyle and do not necessarily represent those of Duff and Phelps or those of U.S. Bancorp respectfully. 3 Why do we need International Standards? View from IVSC "It makes no sense for a similar valuation being undertaken in Moscow, Madrid or Melbourne to be conducted in

entirely different ways. The financial community needs the valuation profession to come up with one accepted set of high quality, global valuation standards." Sir David Tweedie, Chairman, IVSC Board of 5 Presentation Premise Use of International Valuation Standards will continue to grow as global economies

become increasingly interconnected. Valuers should accordingly become fluent in both the local dialect (USPAP) and the global language (IVS). Fortunately, this is not learning a new language, it is only adding some vocabulary to your existing speech pattern. 6

Presentation Overview 1. 2. 3. 4. 5. 6. 7. 8. International Valuation Standards Council (IVSC) International Valuation Standards (IVS)

The Appraisal Foundation & IVSC Collaboration IVS/USPAP Observations & Similarities Core Valuation Principles Project If Asked for an IVS Compliant Appraisal Today Looking forward 1. IVS Update 2. USPAP Update 3. Bridge Update 7 International Valuation Standards Council (IVSC)

International Valuation Standards Council (IVSC) A global body responsible for: 1.Developing and setting International Valuation Standards (IVS) 2.Promoting and growing the valuation profession, worldwide 3.Independent and not-for-profit Responsibility covers all areas of valuation including tangible assets, business valuation and financial instruments. Works

with partners including IASB, IFAC, the World Bank and financial regulators to build trust in valuation 9 IVSC Objectives PROTECT THE PUBLIC INTEREST (i.e., investors, taxpayers)

Promote consistency of approaches Position valuers to perform high quality work Develop common terminology Establish a framework for delivering

valuations Provide transparency 10 IVSC History Early 1990s - IVSC published its first definitions and standards.

2000 - IVSC published its first comprehensive book of standards; four subsequent editions published. By 2007, Standards had grown to a book of over 450 pages but the detail was presenting obstacles to wider adoption. 2009 - Revision Project. Global roundtables, public process.

2011 IVSB approved revised standards effective 1/1/12. 2017 current edition published/effective. 11 IVSC www.ivsc

.org 12 IVSC by the numbers 130 Membership organizations headquartered in 66 countries 50 - organizations have joined in last 3 years 383,000 IVSC membership organizations represent

383,000 members 8 IVS has been translated into 8 languages 25 IVSCs standards boards are from 25 countries and 6 continents 102 member organizations focus on real estate and

tangible assets 75 focus on business valuation 29 focus on financial instrument valuation 130 Member Organizations Headquartered in 66 Countries 14 2019 IVSC Board of Trustees

15 2019 IVSC Standards Boards 16 Advisory Forum Working Group 17 IVSC Sponsors

2019 Valuation Professional Organization Membership 1 of 4 4 types of Members 1. Valuation Professional Organizations 2.

Client Members 3. Academic Members 4. Institutional Members 19 2019 Valuation Professional Organization Membership 2 of 4

20 2019 Valuation Professional Organization Membership 3 of 4 21 2019 Valuation Professional Organization Membership 4 of 4 22 International Valuation Standards (IVS IVS

Concise at 132 pages long. All IVS mandatory Comprises General Standards and Asset Standards Current 2017 Next version IVS 2020 Published July 31st 2019 Effective January 31st 2020 Available to access for free on the IVSC website: www.ivsc.org 24 IVS Structure The IVS are arranged as follows:

The IVS Framework IVS General Standards IVS Asset Standards 25

IVS Structure 26 IVS Asset Standards IVS 400 IVS 400 Real Property Interests 27 IVS Asset Standards IVS 410 IVS 410 Development Property

28 TAF & IVSC The Appraisal Foundation & IVSC The Appraisal Foundation International Valuation Standards Council

Independent Independent Not for Profit Standard Setter Not for Profit Standard Setter 30

IVSC & TAF Collaboration 2006 Memorandum of Understanding (MOU) signed to cooperate on Standard Setting. 2014 Meeting IVS &TAF. MOU signed to remove remaining differences between IVS and USPAP. 2016 A Bridge from USPAP to IVS jointly published 2018 A Bridge from USPAP to IVS updated and jointly published. 2018 CUSPAP-IVS-USPAP working group

meeting. IVS incorporating USPAP definitions. 2019 CUSPAP-IVS-USPAP working group meeting. Core Valuation Principles concept. Observations 2017 IVS 115 pages 2018/19 USPAP - 336 pages

Definitions Preamble Ethics Rule Competency Rule SOW Rule JE Rule SR 1 10

Advisory Opinions FAQs Highly similar SR develop vs. SR Communicate.

Glossary Framework IVS 101 Scope of Work IVS 102 Investigations and Compliance IVS 103 Reporting IVS 104 Bases of Value IVS 105 Valuation Approaches and Methods 6 asset-specific standards: IVS 200 Business and Business Interests

IVS 210 Intangible Assets IVS 300 Plant and Equipment IVS 400 Real Property IVS 410 Development Property 32 IVS and USPAP Similarities Both:

Standards for developing opinions of value Scope of work dependent on intended user and intended use Standards for report content Standards for file documentation Address competency and independence of the appraiser 33 Core Valuation Principles Project Some

gaps remain. Much harmonization now exists. Beneficial to identify/agree on core principles. To be reviewed by CUSPAP/IVS/USPAP: Core Principles of Valuation Standards Core Principles of Valuation Publish and invite global standard setters to concur. Core Principles of Valuation

Standards Purpose Jurisdictional How Standards are Developed How Standards are Revised Orientation, Objective and Breadth of Standards Core Principles of Valuation Public Interest/Trust Ethics Competency Compliance Basis of Value

Date of Value Assumptions Intended Use/User Scope of Work Data Identification of Assets Valuation Methodology Communication of Valuation Record Keeping If Asked For IVS today. Insert Insertimage

imageby byclicking clickinghere here Questions and answers Thanks for attending!

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