Following a call for greater convergence among global valuation bodies last fall, The International Valuation Standards Council (IVSC) and The Appraisal Foundation (TAF) have begun to standardize differences between their two sets of valuation guidelines.
In October, the IVSC signed a memorandum of understanding (MoU) with 19 regional and national valuation standard setters that committed them to either adopt (or declare that their own standards in compliance with) the IVSC standards in the next three years.
TAF, the primary US valuation body, is now officially working to harmonize its Uniform Standards of Professional Appraisal Practice (USPAP) with the IVSC’s International Valuation Standards (IVSs).
Representatives from the IVSC’s Standards Board and the TAF’s Appraisal Standards Board recently met to establish joint objectives and a long-term plan to collaborate and execute upon the MoU, according to a press release.
This will be accomplished, in part, through a “bridge document” that will connect the two sets of standards. Appraisers using the document will be able to develop appraisals that are compliant with both the IVSs and USPAP.
The work is expected to make valuation a less complicated exercise in the time ahead. Private fund managers especially would benefit from a more universal valuation standard due to the illiquid nature of their assets under management, which can be difficult and time-consuming to price.
Some other the notable valuation organizations that signed the memorandum include the Appraisal Institute of Canada, China Appraisal Society, Australian Property Institute and the UK-based Royal Institution of Chartered Surveyors.
“The MoU has reinvigorated our long-term relationship between the IVSC and TAF,” said Sir David Tweedie, chairman of the IVSC Board of Trustees, in a statement. “We are now determined to capitalize on the wealth of expertise we have at our disposal in our common goal of establishing a globally accepted set of valuation standards. Bringing USPAP and the IVSs together is an extremely important step towards achieving this goal.”