Financial executives in the UK and EU are more likely to know that business valuation has its own set of professional standards. Over 80% of those surveyed in “On the Role of Business Valuation Standards From the Perspective of End-Users” agreed with this statement. The same percentage believe that valuations prepared according to some international standard (whether from RICS, the IVS, or elsewhere) help resolve business conflicts. Both of these results are much higher than those derived from similar earlier surveys.

The study (reposted with permission on the IVSC website), published in Bewertungs Praktiker and written by Marc Broekema (Amsterdam), Olesya Perepechko (St. Petersburg), and Klaus Rabel (Graz), offers hope that the BV profession continues to gain independent recognition in wider business circles. Many (72%) of the financial executives surveyed are current enough with professional issues to recognize that the lack of one uniform global standard can create differences in valuation metrics, particularly in the areas of:

• Valuation approaches and methods;
• Estimating the discount rate; and
• Estimating the long-term growth rate.

The respondents were less concerned with contradictions between, say, the new TEGoVA European standards and the BV components of IVS than they were that their business valuers were complying with some relevant standard. Perhaps what’s most noteworthy is that these business users of valuation services recognized that multiple BV standard-setters exist. That was not true a decade ago.