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The Practical Guideline Valuation Standards
Prof dr T.M. Berkhout MRE MRICS
Drs ing S. Roggeveen
Why did we made this practical guideline?
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International Valuation
Standards (IVS) European
Valuation Standards (EVS) International Financial Reporting Standars (IFRS) valuation
standard annual Report, Accountants, study books
valuation practice
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Platform Valuers & Accountants (PTA)
• PTA recommendations are independent of IVS and EVS
• The PTA report has a practical approach:
• Methodologies (recommendation 11)
• Discount rate, DCF (Recommendation 12)
• The PTA recommendations are certainly not as academic as expressed for
example, the IVS
• The recommendations give practical tips and examples that we will not
find in IVS and EVS.
• Be transparent in valuation
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Example 1 similarities
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Example 2 similarities
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Example 3 differences
IVS
• HABU:
comprises realistic
changes that are
deemed feasible
EVS
• HABU:
strictly current status
• Hope Value:
future opportunities
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Example 3 Derogations
IVS
EVS
• Alternative Use Value
• The market value of the
property without presuming
the continuation of its
present use.
• In the EVS view this as a
market value
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More IVS & EVS Findings
• No misunderstandings as to the actual condition of the
property
• IVS more focused on investigation, assignment and reporting.
• EVS more focused on property.
• Details of reference objects (if used):
• IVS do not state reference objects.
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More EVS & IVS Findings
• Both: the valuation report must be crystal clear
• No misunderstandings about the report, and the report may not be
misleading
• EVS identify the relationship between a valuation certificate and a
valuation report
• The valuation certificate is a separate document, possibly by way of a
summary, which can be included in the valuation report.
• In addition to the IVS, EVS emphasise the independence of the valuer.
• Now then, the differences are found mainly in the application and
interpretation of highest and best use
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RICS RED BOOK
• Distinction between valuation certificate and report
• A valuation certificate may be issued only by a valuer who has previously
valued the property or advised on it.
• A certificate is rather an annex to the report
• Focuses on development of a reporting standard that can easily be
incorporated in the annual report
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NVM positions
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Valuation reporting requirements Recommendations to NVM valuers
Appointment and status of the valuer Give a full description of the valuer, i.e.
including titles, qualifications and
accreditations.
Clear and accurate description of the
scope, purpose and intended use of the
valuation assignment.
Give a clear and accurate description of the
scope, purpose and intended use of the
valuation assignment.
Nature and source of the information
relied on.
Identify the source of each input and indicate
whether this information has been verified by
the valuer.
Date of valuation Identify:
the reference date (the date as per
which the value was determined),
the date of valuation (the date on
which the property was valued and the
required information searched for),
the publication date (the date on which
the valuation report has become final).
Identification of the client and other
intended users
Identify the client and any other intended
readers.
Restrictions of use, distribution or
publication
Indicate the restrictions on use, distribution
or publication of the valuation report.
Confirmation that the report is in
accordance with the standard used
Confirm that the valuation report is in
accordance with the standard used. Indicate
the points on which the standard was
departed from and why.
