Following its inaugural meeting this month, the International Valuation Standards Council’s (IVSC) Expert Group on Financial Instruments has announced its initial work program, which will address the “lack of standardization and transparency in the valuation process,” according to a July 20, 2009 release. “The Group will provide input…to rewrite the International Valuation Standards to ensure that these adequately address concerns that have arisen over the valuation of financial assets and liabilities, particularly in the aftermath of the global financial crisis.”  The Group will also:

• Identify the need for guidance on resolving some of the specific valuation issues that have arisen in the financial markets;
• Produce a discussion paper to examine the suitability of different valuation methods for various situations; 
• Begin a project to identify and measure liquidity premiums (“a controversial area of practice at present”); and     
• Review the impact of recent reports by the FASB and the IASB to determine whether to develop further valuation guidance in this area.

The next meeting of the group is in October. For further information, visit www.ivsc.org.