Two new resources discuss the impact of business valuation for ‘complex’ financial instruments

BVWire–UKIssue #7-2
October 14, 2019

valuation methods & approaches
international valuation standards, international valuation standards council (IVSC), financial instruments

In collaboration with RICS and IVSC, the iiBV have released their Valuing Financial Instruments video webinar earlier this month. The panel includes Justin Burchett (managing director, Stout New York); Srividya Gopalakrishnan (managing director and Southeast Asia leader, Duff & Phelps, Singapore); Kumar Dasgupta (technical director of Financial Instruments, IVSC London); and Nicolas Burdeau (partner, Deloitte, Paris). It’s moderated by Michael Badham, iiBV executive director.

Meanwhile, IVSC’s recently appointed Financial Instruments Standards Board has published an Agenda Consultation. The board has received some input but is still seeking feedback regarding the approach the board should take and the prioritisation of their work. You can download the consultation paper here.

No effective set of international valuation practice standards for financial instruments have yet been generally adopted. Even a common definition of the term ‘complex financial instruments’ is elusive. This has resulted in both inconsistent and sometimes low-quality valuation practices.

Beyond RICS and IVSC, financial regulators and others in the UK and abroad have expressed concern about the quality and consistency of financial instrument valuation practice. For instance, earlier this summer, the U.S. PCAOB released their own ‘Auditing the Fair Value of Financial Instruments.’

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