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IACVA’s New Path for International Certified Valuation Specialist (ICVS)
Jim Horvath, ICVS, Chairman, IACVA
Supportable reliable value conclusions are a universal requirement. Our professional results are needed for business investments, accounting, lending, taxation, family law, inheritance and many other uses in nearly every nation in the world.
Between countries, the needs of the valuation profession vary. There are substantial cultural differences, together with regional variations in how business is conducted. Simply saying “well this is how we do it here” (Country AA) is certainly not always appropriate for countries BB through ZZ. In the last 30 plus years and having worked on assignments in nearly 70 countries, I have seen the needs and tools of the profession change immensely; most notably assisted by the introduction of computers, time-saving excel formulas and spreadsheets, and assessing information through the world-wide-web. From my experiences, I’ve learned that there are many cultural influences on how businesses are valued, and that the valuation drivers and techniques that work well in one area don’t apply equally as well in others.
In some countries the art, science and craft of performing valuations has descended into looking up data in a “cookbook”. Many qualified professionals think that with a copy of an American source such as Duff & Phelps’ “Risk Premium Report” (RPR) or Ibbotson’s “Stock, Bonds, Bills and Inflation” (SBBI), they can value anything. Such conclusions are merely “average pricing”, not valuing. Similarly, the application of Trend and Bend techniques to machinery and equipment is also not valuing but rather “ball-park pricing” and often merely produces an adjusted accounting number which an in-depth appraisal would show is not in the ball-park.
In light of the numerous variations, it is highly desirable to establish best practices, which can vary globally. These are not intended to replace local procedures but to supplement and support (or modify) their conclusions. This is the most important role of any global valuation body such as theInternational Association of Consultants Valuators and Analysts (IACVA). In addition, IACVA’s Board of Directors, who in aggregate have experience working on valuation assignments in over 100 countries, recognize the differing needs of the International Certified Valuation Specialists (ICVS). We are devoted to satisfying the needs of valuation professionals and candidates by offering training and a general accepted professional global designation, the ICVS.
When I first joined my first American-based valuation organization it had fewer than 20 accredited business valuation professionals in the United States and Canada. But everyone, even Canadians, had to write the same exam, which included questions that required extensive knowledge of United States taxes. Similarly, most other business valuation organizations require anyone who seeks their designation to learn the local country business law and taxes. IACVA, and its International Certified Valuation Specialists (ICVS) group, do not require candidates to demonstrate knowledge of tax regimes of other countries but to understand the intricacies of valuing businesses, their interests, assets and technologies in their own countries . In addition, IACVA directors share their knowledge and experiences to assist the ICVS in the application and modification of best practices, for we know that one valuation model or best practice doesn’t fit all.
IACVA . . . “Valuation Knowledge Creation And Sharing Worldwide.”