Business valuers are accustomed to risk, volatility, and increased forecast uncertainty. This is the basis of our profession, particularly when the proverbial “sky is falling.”

Still, last week’s commentary from Alistair Darling, the current chair of the IVSC, offers solace. He reminds valuers of “the standards that professionals follow when carrying out a valuation of an asset or liability matter.”

Darling refers to recent debates at the G20 meeting (including discussion of the 2007-08 financial crisis) to demonstrate that, “[i]f valuations are weak, or if the standards that underpin them are inconsistently applied or opaque, then the financial systems and markets that they exist in become much riskier and less stable.” Investment will be reduced, as it has been, and business activity will diminish. It’s easy to measure the effects on the London Stock Exchange, but, of course, the same holds true for the underlying assets of unlisted businesses.

Darling, writing on behalf of the member organisations of the IVSC, reminds all business valuers of the importance of their professional role in stabilising economic markets and crises:

[A] consistent approach to valuation, built on internationally-agreed and universally-adopted standards, makes markets more transparent and valuations more comparable. It supports and makes viable the efforts already underway to harmonise the financial ecosystem with common accounting, banking and investment rules, all of which reference and rely on robust valuations. In short, it reduces risk and brings greater confidence.