In a move that has global implications for the BV profession, representatives from several valuation professional organizations (VPOs) are heading to Washington, D.C., later this month to meet with the Securities and Exchange Commission (SEC) over new efforts to address the agency’s concerns about the state of the valuation profession. The SEC has criticized the BV profession as being too fragmented, with multiple credentials, different sets of standards, and a lack of consistency in qualifications and enforcement. This lack of unification has caused damage to market confidence, critics say.
Fair value focus: In a statement to members posted on several VPO websites, the American Institute of Certified Public Accountants (AICPA), American Society of Appraisers (ASA), Royal Institution of Chartered Surveyors (RICS), and The Appraisal Foundation (TAF), along with global valuation leaders from several large accounting firms and the International Valuation Standards Council (IVSC), began formal discussions in 2014 regarding proposed solutions to the expressed concerns of the SEC’s chief accountant. The concerns centered around the “broadening application of fair value and fair value-based measures in U.S. GAAP and its impact on the reliability and consistency of valuations being conducted for U.S. publicly traded companies.”
The participating VPOs agreed to spearhead a “new shared level of professionalism focused on a mandatory performance framework, education and quality assurance.“ The discussions have reached the point where potential solutions are ready to be presented to the SEC. After this meeting, the initiative will continue to be developed. When a specific plan is created, it will be submitted to interested stakeholders for public comment later this year, the statement says.
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