VALUED INSIGHTS

Invaluable Valuation Knowledge for the Real Estate Stakeholder

SERIES:
Beyond Borders: A Global Perspective of International Real Estate Valuation
CHAPTER
  1. Navigating Cultural Differences in International Valuation Practices
    (Published: June 27, 2024)

  2. Comparing Valuation Standards Across Different Countries
    (Available: July 16, 2024)

     

  3. The Impact of Global Economic Trends on Property Valuations
    (Available: July 23, 2024)

  4. Legal and Regulatory Challenges in International Property Appraisals
    (Available: July 30, 2024)

  5. Best Practices for Cross-Border Collaboration in Valuation Advisory
    (Available: August 6, 2024)

  6. Adapting Valuation Approaches to Diverse International Markets
    (Available: August 13, 2024)

  7. The Role of Technology in Streamlining Global Valuation Processes
    (Available: August 20, 2024)

  8. Understanding the Influence of Political Stability on Property Values
    (Available: August 27, 2024)

  9. Green Building Certification and Sustainability in Global Valuations
    (Available: September 3, 2024)

  10. Valuation Challenges in Emerging Markets: Lessons Learned
    (Available: September 10, 2024)

  11. Applying International Valuation Standards (IVS) in Practice
    (Available: September 17, 2024)
SERIES:
Beyond Borders: A Global Perspective of
International Real Estate Valuation
CHAPTER:

Understanding Valuation Standards Globally

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Author: Bruce D. Greenberg, FRICS | MAI | SRA | ASA | ARM
Published: June 27, 2024

In the realm of international valuation, professionals must navigate a complex landscape of varying valuation standards and practices across different countries. These standards, established by national and international bodies, serve as guidelines for conducting valuations and ensuring consistency, transparency, and credibility in the valuation process. Understanding the similarities and differences between these standards is crucial for valuation professionals operating in the global market.

Overview of Major Valuation Standards

Several prominent valuation standards exist worldwide, each with its own set of principles, methodologies, and reporting requirements. Some of the major standards include:

Bruce D. Grennberg
FRICS | MAI | SRA | ASA | ARM
Managin Director | Principal
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  1. International Valuation Standards (IVS): Developed by the International Valuation Standards Council (IVSC), the IVS are widely recognized and adopted by many countries as a framework for conducting valuations across various asset classes.
  1. Uniform Standards of Professional Appraisal Practice (USPAP): Established by the Appraisal Standards Board (ASB) of the Appraisal Foundation in the United States, USPAP is a set of standards that govern the appraisal profession in the US and is widely recognized in North America.
  1. Royal Institution of Chartered Surveyors (RICS) Valuation Standards: Developed by the RICS, a professional body in the United Kingdom, these standards are widely used in the UK and other Commonwealth countries.
  1. European Valuation Standards (EVS): Established by the European Group of Valuers’ Associations (TEGoVA), the EVS provide a framework for valuations within the European Union.


Key Differences and Challenges

While these valuation standards share many similarities in their underlying principles and methodologies, there are notable differences that can pose challenges for valuation professionals operating across borders. Some key differences include:

  1. Terminology and Definitions: Certain terms and definitions may vary across different standards, leading to potential misunderstandings or inconsistencies in interpretation.
  2. Reporting Requirements: The format, content, and level of detail required in valuation reports can differ significantly between standards, making it challenging to comply with multiple reporting requirements.
  3. Valuation Approaches and Methodologies: While the fundamental valuation approaches (cost, income, and market) are generally consistent, the specific methodologies and their application may differ across standards.
  4. Ethical and Professional Standards: The ethical guidelines and professional conduct requirements for valuers can vary, potentially leading to conflicts or inconsistencies in practice.
  5. Regulatory and Legal Frameworks: Valuation standards are often influenced by the regulatory and legal frameworks of the countries or regions in which they are developed, leading to potential conflicts or incompatibilities when applied in different jurisdictions.


Best Practices and Strategies

To navigate the complexities of varying valuation standards, valuation professionals should adopt the following best practices:

  1. Comprehensive Understanding: Develop a thorough understanding of the valuation standards applicable in the countries or regions where assignments are undertaken.
  2. Continuous Education and Training: Regularly participate in educational programs and training sessions to stay updated on changes and developments in valuation standards across different jurisdictions.
  3. Collaboration and Knowledge Sharing: Foster collaboration and knowledge sharing within the global valuation community to promote consistency and alignment of practices.
  4. Adherence to Professional Ethics: Maintain a strong commitment to professional ethics and integrity, ensuring compliance with the highest standards of conduct regardless of the jurisdiction.
  5. Transparency and Clear Communication: Clearly communicate the valuation standards and methodologies used in each assignment, ensuring transparency and minimizing potential misunderstandings or conflicts.
 

Conclusion

Navigating the diverse landscape of valuation standards across different countries is a significant challenge for valuation professionals operating in the global market. By developing a comprehensive understanding of the various standards, fostering collaboration and knowledge sharing, and adhering to professional ethics and transparency, valuation professionals can effectively navigate these complexities and deliver reliable and credible valuations that meet the highest international standards.

Sources:

International Valuation Standards Council (IVSC). (2022). International Valuation Standards. https://www.ivsc.org/standards/international-valuation-standards

The Appraisal Foundation. (2022). Uniform Standards of Professional Appraisal Practice (USPAP). https://www.appraisalfoundation.org/imis/TAF/Standards/Appraisal_Standards/Uniform_Standards of Professional_Appraisal_Practice/TAF/USPAP.aspx

 Royal Institution of Chartered Surveyors (RICS). (2022). RICS Valuation – Global Standards. https://www.rics.org/globalassets/rics-website/media/upholding-professional-standards/sector-standards/valuation/red-book-global-standards-2022.pdf

The European Group of Valuers’ Associations (TEGoVA). (2022). European Valuation Standards. https://www.tegova.org/en/p4712a8c9d9f6b

Gilbertson, B., & Preston, D. (2005). A vision for valuation. Journal of Property Investment & Finance, 23(4), 368-397.

Mallinson, M., & French, N. (2000). Uncertainty in property valuation: The application of modern valuation techniques. Journal of Property Investment & Finance, 18(1), 13-26.

Amidu, A. R., & Aluko, B. T. (2007). Ethics and professionalism in the valuation practice: The Nigerian experience. International Journal of Strategic Property Management, 11(2), 85-98.

Lorenz, D., & Lützkendorf, T. (2008). Sustainability in property valuation: Theory and practice. Journal of Property Investment & Finance, 26(6), 482-521.

Levy, D., & Schuck, E. (2005). The influence of clients on valuations: The clients’ perspective. Journal of Property Investment & Finance, 23(2), 182-201.