1. INTERNATIONAL VALUATION STANDARDS COUNCIL
U.S. Appraisal Standards and International Valuation Standards
INTERNATIONAL VALUATION STANDARDS COUNCIL

2. Presenters James Gavin, MAI, CRE, FRICS Thomas Boyle, MAI
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

3. 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.

4. Why do we need International Standards?

5. 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 Trustees

6. 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.

7. Presentation Overview
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
IVS Update
USPAP Update
Bridge Update

8. International Valuation Standards Council (IVSC)

9. International Valuation Standards Council (IVSC)
A global body responsible for:
Developing and setting International Valuation Standards (IVS)
Promoting and growing the valuation profession, worldwide
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

10. 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

11. IVSC History
Early 1990’s - IVSC published its first definitions and standards.
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.
Revision Project. Global roundtables, public process.
2011 – IVSB approved revised standards effective 1/1/12.
2017 – current edition published/effective.

12. IVSC

13. 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 – IVSC’s 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

14. 130 Member Organizations Headquartered in 66 Countries

15. 2019 IVSC Board of Trustees

16. 2019 IVSC Standards Boards

17. Advisory Forum Working Group

18. IVSC Sponsors

19. 2019 Valuation Professional Organization Membership 1 of 4
4 types of Members
Valuation Professional Organizations
Client Members
Academic Members
Institutional Members

20. 2019 Valuation Professional Organization Membership 2 of 4

21. 2019 Valuation Professional Organization Membership 3 of 4

22. 2019 Valuation Professional Organization Membership 4 of 4

23. International Valuation Standards (IVS)

24. 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:
IVS 2017
Concise at 107 pages long.
All IVS 2017 mandatory
Comprises General Standards and Asset Standards
Two new General Standarsd:104 Bases of Value and IVS 105 Valuation Approaches.
Effective Date 1st July 2017
Available to access for free on the IVSC website:

25. IVS Structure The IVS are arranged as follows: The IVS Framework
IVS General Standards
IVS Asset Standards
The IVS are arranged as follows:
The IVS Framework
This serves as a preamble to the IVS. The IVS Framework consists of general principles for valuers following the IVS regarding objectivity, judgement, competence and acceptable departures from the IVS.
IVS General Standards
These set forth requirements for the conduct of all valuation assignments including establishing the terms of a valuation engagement, bases of value, valuation approaches and methods, and reporting. They are designed to be applicable to valuations of all types of assets and for any valuation purpose.
IVS Asset Standards
The Asset Standards include requirements related to specific types of assets. These requirements must be followed in conjunction with the General Standards when performing a valuation of a specific asset type. The Asset Standards include certain background information on the characteristics of each asset type that influence value and additional asset-specific requirements on common valuation approaches and methods used.

26. IVS Structure Introduction Glossary IVS Framework General Standards
•IVS 101 Scope of Work
•IVS 102 Investigation and Compliance
•IVS 103 Reporting
•IVS 104 Bases of Value
•IVS 105 Valuation Approaches and Methods
Asset Standards
•IVS 200 Businesses and Business Interests
•IVS 210 Intangible Assets
•IVS 220 Non-Financial Liabilities
•IVS 300 Plant and Equipment
•IVS 400 Real Property Interests
•IVS 410 Development Property
•IVS 500 Financial Instruments
Index

27. IVS 400 Real Property Interests
IVS Asset Standards – IVS 400
IVS 400 Real Property Interests
IVS 400 Real Property Interests
Contents
10. Requirements
20. Overview
30. Basis of Value
40. Valuation Approaches
50. Market Approaches
60. Income Approaches
70. Cost Approach
80. Special Considerations for Real Property Interests
90. Hierarchy of Interests
100. Rent

28. IVS 410 Development Property
IVS Asset Standards – IVS 410
IVS 410 Development Property
IVS 410 Development Property
Contents
10. Introduction
20. Overview
30. Basis of Value
40. Valuation Approaches
50. Market Approach
60. Income Approach
70. Cost Approach
80. Special Considerations for a Development Property
90. Residual Method
100. Existing Asset
110. Special Consideration for Financial Reporting
120. Special Considerations for Secured Lending .

29. TAF & IVSC

30. The Appraisal Foundation & IVSC
Independent
Not for Profit
Standard Setter
International Valuation Standards Council
Independent
Not for Profit
Standard Setter

31. 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.

32. Observations 2018/19 USPAP - 336 pages Definitions Preamble
Ethics Rule
Competency Rule
SOW Rule
JE Rule
SR 1 – 10
Advisory Opinions
FAQ’s
Highly similar
SR develop vs. SR Communicate.
2017 IVS – 115 pages
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
IVS 500 Financial Instruments

33. 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

34. 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.

35. Core Principles of Valuation Standards
Purpose
Jurisdictional
How Standards are Developed
How Standards are Revised
Orientation, Objective and Breadth of Standards

36. 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

37. If Asked For IVS today….

38. Questions and answers
Thanks for attending!