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. Understanding the Influence of Political Stability on Property Values
    (Available: August 20, 2024)

  8. Valuation Challenges in Emerging Markets: Lessons Learned
    (Available: August 27, 2024)

  9. Applying International Valuation Standards (IVS) in Practice
    (Available: September 3, 2024)

  10. The Interplay Between Currency Exchange Rates and Property Valuations
    (Available: September 10, 2024)

  11. Commercial Property Valuation in Developed vs. Developing Nations
    (Available: September 17, 2024)
SERIES:
Beyond Borders: A Global Perspective of
International Real Estate Valuation
CHAPTER:

Applying International Valuation Standards (IVS) in Practice

Receive
Valuation Insights
in your Inbox

Author: Bruce D. Greenberg, FRICS | MAI | SRA | ASA | ARM
Published: September 3, 2024

The International Valuation Standards (IVS) provide a globally recognized framework for conducting valuations across various asset classes and industries. Developed by the International Valuation Standards Council (IVSC), the IVS aim to promote consistency, transparency, and confidence in valuation practices worldwide. As valuation professionals navigate the complexities of international assignments, adhering to the IVS is crucial for delivering reliable and credible valuations.

Understanding the IVS Framework

The IVS framework consists of several components, each serving a specific purpose in guiding valuation professionals through the valuation process:

Bruce D. Grennberg
FRICS | MAI | SRA | ASA | ARM
Managin Director | Principal
+1-480-440-2842 EXT 01
  1. IVS Framework: This component outlines the fundamental principles and concepts that underpin the IVS, providing a foundation for their application[1].
  1. IVS General Standards: These standards establish requirements for all valuation assignments, covering aspects such as ethical conduct, competence, and reporting[1].
  1. IVS Asset Standards: These standards provide additional requirements and guidance specific to the valuation of different asset classes, such as real estate, businesses, and financial instruments[1].
  1. IVS Application Standards: These standards address specific valuation purposes or contexts, such as valuations for financial reporting or secured lending[1].

Challenges in Applying the IVS

While the IVS provide a comprehensive framework, valuation professionals may encounter various challenges when applying these standards in practice:

  1. Local Market Nuances: Certain markets or jurisdictions may have unique characteristics, regulations, or practices that require adaptation or interpretation of the IVS[2].
  1. Data Availability and Quality: Accessing reliable and consistent data can be challenging, particularly in emerging markets, potentially impacting the application of certain valuation methodologies[3].
  1. Cultural and Language Barriers: Effective communication and understanding of the IVS across different cultures and languages can pose challenges, especially in cross-border assignments[4].
  1. Evolving Standards and Updates: The IVS are periodically reviewed and updated, requiring valuation professionals to stay informed and adapt their practices accordingly[5].

Best Practices and Strategies

To overcome these challenges and ensure effective application of the IVS, valuation professionals should consider the following best practices:

  1. Continuous Education and Training: Invest in ongoing education and training programs to maintain a comprehensive understanding of the IVS and stay updated on any revisions or amendments[1].
  1. Collaboration and Knowledge Sharing: Foster collaboration and knowledge sharing within the valuation community, both locally and globally, to exchange insights and best practices for applying the IVS in diverse contexts[4].
  1. Local Expertise and Partnerships: Develop partnerships with local valuation professionals and industry experts who can provide valuable insights into market nuances and assist in interpreting the IVS within specific contexts[2].
  1. Transparent Communication: Clearly communicate the application of the IVS, including any assumptions, limitations, or deviations, in valuation reports and client interactions, ensuring transparency and managing expectations[1].
  1. Quality Control and Review Processes: Implement robust quality control and review processes to ensure consistent and compliant application of the IVS across all valuation assignments[1].

By adhering to the International Valuation Standards and adopting best practices for their application, valuation professionals can enhance the credibility and reliability of their valuations, fostering trust and confidence among clients and stakeholders in the global market.

Sources:

[1] International Valuation Standards Council. (2022). International Valuation Standards (IVS). https://www.ivsc.org/standards/international-valuation-standards/

[2] Ulster University. (2014). The Role of International and Local Valuation Standards in Influencing Valuation Practice in Emerging and Established Markets.
https://pure.ulster.ac.uk/ws/portalfiles/portal/11438718/MAIN_REPORT_Global_Valuation_Standards_
FR_130314_dwl_aj.pdf

[3] Deloitte. (2013). International Valuation Standards. https://www2.deloitte.com/al/en/pages/financial-services/articles/international-valuation-standards.html

[4] HKA. (2023). Proposed updates to the International Valuation Standards (IVS) to include requirements to consider ESG factors when conducting valuations from 2024. https://www.hka.com/international-practitioners-assessing-value-for-deals-and-disputes-take-note-proposed-updates-to-the-international-valuation-standards-ivs-to-include-requirements-to-consider-esg-factors-when-cond/

[5] International Valuation Standards Council. (2024). New edition of the International Valuation Standards (IVS) published. https://www.ivsc.org/new-edition-of-the-international-valuation-standards-ivs-published/

Citations:

[1] https://www2.deloitte.com/al/en/pages/financial-services/articles/international-valuation-standards.html

[2] https://viewpoint.pwc.com/dt/gx/en/ivsc/international_valuat/assets/IVS-effective-31-Jan-2022.pdf

[3] https://www.hka.com/international-practitioners-assessing-value-for-deals-and-disputes-take-note-proposed-updates-to-the-international-valuation-standards-ivs-to-include-requirements-to-consider-esg-factors-when-cond/

[4] https://www.ivsc.org/new-edition-of-the-international-valuation-standards-ivs-published/

[5]https://pure.ulster.ac.uk/ws/portalfiles/portal/11438718/MAIN_REPORT_Global_Valuation_
Standards_FR_130314_dwl_aj.pdf