The document discusses whether valuation is considered a profession or an industry. It notes that while valuation has some characteristics of a profession, such as specialized training and standards, it is still seen more as a technique than a true profession. The International Valuation Standards Council works to develop high-quality global valuation standards and establish valuation as a recognized profession through projects establishing an ethical code, fairness opinion guidelines, and competency framework for valuers. The IVSC aims to have a unified valuation profession through cooperation among professional bodies.

1. International Valuation
Standards Council
Valuation – Profession or Industry?
Chris Thorne – IVSC Technical Director
CBAN Sao Paulo
10 October 2012
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2. What is a profession?
A learned and respected body of individuals
• Training – university level.
• Code of Ethics.
• An organised body to create and uphold
standards for the above
• Continuing Professional Development
• Monitoring and Oversight
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3. What of Valuation?
• Developed as secondary specialisation by
experts in different types of asset.
• Led to fragmentation by asset type.
• Unintended consequences of legislation.
• Always a grudge purchase.
• Regarded as technique rather than
profession
• Who cares about valuation?
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4. What do others think?
• G20 – in 2009 recognised valuation as
being contributory factor to financial crisis…
• …but asked accountants (IASB) to fix it!
• Scepticism around fair value measurements
under IFRS.
• SEC comments 2005 and 2011.
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5. The case for Valuation
• An essential lubricant of financial system;
• Relied on by investors worldwide for
investment decisions;
• Regulatory Interest, eg
 PCAOB
 FRC
 Prudential Regulators
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6. Valuation needs a voice
• Poor understanding of valuation by financial
regulators, eg:
 AIFMD
 EIOPA
 IOSCO – CIS proposals
• Input to IASB so that they can decide when
value is an appropriate measure, not how
value is determined.
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7. The IVSC – our objectives
Primary objectives:
• Developing high quality international standards
and supporting their adoption and use;
• Facilitating collaboration and cooperation
among its member bodies;
• Collaborating and cooperating with other
international organisations;
• Serving as the international voice for the
valuation profession.
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8. The IVSC – how do we work?
The IVSC has no powers. Its authority comes from:
• Consulting with valuation users and regulators
to identify their concerns;
• Working with professional valuers to identify
solutions;
• Developing and promoting those solutions.
Enforcement of and compliance with IVS is by those
adopting the standards, e.g. regulators, professional
bodies, clients.
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9. The IVSC – Professional Board Projects
 IVSC cannot build a profession on its own.
 Partnership with professional bodies.
 Diversity can be a strength if used to develop
specialisms that are all focused in same direction.
 Everyone gains if different bodies work together to
identify common interest and then promote those
interests consistently.
 A united profession needs more than common technical
standards, eg: shared core competencies, shared
ethical standards, a single body to interact with other
global bodies, a recognisable common title, effective
oversight (self regulation)
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10. The IVSC – Professional Board Projects
Projects to help Development of Profession
• Code of Ethical Principles for Professional Valuers
(published late 2011)
• Guidelines for the development and reporting of
fairness opinions. (ED March – June 2012)
• Guidance for Valuers on the Audit process. (ED
published March 2012)
• Competency Framework for Professional Valuers
(expected July 2012)
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11. A modern profession
Traditional Values of learning and public trust still
apply but:
• Inclusivity not exclusivity
• Transparency and accountability
• Partnership with governments and regulators
Governments and Regulators dislike exclusive
professional “clubs” that only act in commercial
interests of members.
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