The International Association of Consultants, Valuators and Analysts (IACVA) and the Middle East Charter (together with Business Valuation Resources and the China Appraisal Society) held a busy conference at the Al Murooj Rotana hotel in beautiful Dubai on Dec. 13 and 14, 2015. IACVA presented the Honorary Member status to Elvin Fernandez of Malaysia for his many years of contribution to the valuation profession.
In addition, the newest charter member of IACVA (from Malaysia) was announced and introduced at this conference. This new charter was started entirely by Malaysian real estate appraisers who see that business valuation skills have become indispensable in the economic crossroads of Malaysia and the four ASEAN countries.
Bill Hanlin and Jim Horvath (IACVA president and chairman, respectively) welcomed the delegates and shared how business valuation is now practiced worldwide using the same fundamentals and theory. The days of each practitioner using his or her own individual methods developed over his or her career is past, as the global markets in M&A and financial reporting demand transparency and adherence to common practices. From there, Dr. Assem Safieddine (president of IACVA Middle East) introduced practitioners from each represented country. Each spent a few minutes discussing valuation issues and trends within their geographic regions.
Madam Liu Ping, vice chair of IACVA, addressed the group about the rapid evolution of China's capital markets, where they are going, current valuation practices, and the continued push for transparency within the China market. The interest was high in the room, and the questions pushed the presentation right to lunch where discussion continued on the sunny patio.
A few words on the alliance with Business Valuation Resources (BVR), and discussion of available products, data, webinars, and the need to receive local transactional data, welcomed everyone back to the conference after lunch. Attendees were quite excited about the new alliance with BVR!
A short address was made by Dr. Lim Yuan, chairman of the World Association of Valuation Organizations. Dr. Lim praised the growth of IACVA and welcomed all new members of IACVA to the international society of valuation professionals
Ziad Awad discussed the challenges of valuing family businesses in the Middle East. He punctuated the presentation with examples of pitfalls as well as achievements. An interesting presentation by Dr. Kim Young-gi of Korea presented the use of big data rather than detailed analysis and best practices to value businesses. The research is not quite finished, but the results seem to indicate that the big data approach provides a reasonable valuation result that is extremely similar to value developed using detailed analysis and best practices.
The first day was closed out with a discussion of business valuation standards, from the IVSC, IACVA, ASA, CICBV, and AICPA.
Jim Horvath and Jim Catty spent significant time discussing various issues involved with building a business valuation practice, from a single practitioner to a multianalyst office. The class was able to ask questions and receive real-world answers from the pair of experienced professionals.
Bill Hanlin then completed the morning with a give-and-take session relating his experiences on engagement management matters. Issues such as how to say "no" to clients on a variety of matters, from “this is the answer I want” to “I need the answer tomorrow.” He provided real-world experiences with his clients and from his colleagues. This class was busy with questions and concerns.
After another excellent lunch buffet at the Al Murooj Rotana hotel, the group was directed to common errors seen by the IACVA trainers in valuation reports worldwide. Again, items such as transparency, full disclosure, and usage of reports for specifically disallowed (by the author/valuator) purposes. Bob Brackett commented that these are the same common errors he saw 20 years ago. The only new item is the recent focus on public perception, the need to ensure our projects make every effort to not diminish the public perception of valuators.
The conference concluded with a session focused on looking at the valuation engagement from the perspective of the stakeholders, rather than just the valuator. This brought up discussions of transparency, lack of understanding of our terms and distinctions (e.g., fair value, fair market value, market value, valuation date, report date) and the ongoing need to provide education to stakeholders on the need and usefulness of the valuation expert.
The site and date for the 2016 International IACVA Conference were announced. This important international event will be in Kuala Lumpur in mid-September 2016.
For more information on business valuation in an international setting, visit BVR’s Global BV Resource Centre.