Two more videos are now available in which Michael Badham, executive director of the International Institute of Business Valuators (iiBV), interviews Adam Smith, technical director of business valuation standards at the International Valuation Standards Council (IVSC). Smith talks about his role in the IVS process and what it means for the valuation profession. IVS 2017 has recently been finalized, and worldwide adoption is being urged.

Three little words: One of the changes in IVS 2017 is in response to commenters who wanted a clarification of the words “must,” “should,” and “may,” which are used often within the standards, Smith says. “Must” is used to mean that a particular action or task is required in order to say you are in compliance with the standards. “Should” is a presumptive requirement, Smith says. That is, you must do something unless you meet a relatively high bar to show you have achieved the objective of the standard without taking that particular action. “May” is defined as something that must be considered but you don’t have to do it in order to be compliant, and you don’t have to justify not doing it (as you do with something that “should” be done).

Similar words such as “shall” and “might” were used in the draft standards, but they were dropped to avoid confusion. Smith also points out that the IVSC will now take a more flexible approach with regard to updating IVS. Instead of doing a substantial rewrite every few years, the standards will undergo changes in a more targeted and ongoing way.

You can view the videos on the iiBV website.