The push for improved quality in fair value for financial reporting continues with the introduction of a new credential by the AICPA: the Certified in Valuation of Financial Instruments (CVFI), which will launch later this year. An exposure draft of a “disclosure framework” has been issued that establishes parameters of documentation requirements. Comments are due Sept. 26, 2017.
Solo effort: The CVFI can be considered a companion of sorts to the Certified in Entity and Intangible Valuations (CEIV), which the AICPA, ASA, and RICS developed jointly. But, unlike the CEIV, this new credential is not being developed in collaboration with other valuation professional organizations (VPOs). BVWire asked the AICPA about this, and it responded with the following statement: “We recognized a critical market need and wanted to move forward with developing a credential to address that need. Our goal is for the CVFI to become a global credential that other valuation organizations are able to offer their members.”
As the statement indicates, this new credential is not just for CPAs and will involve training, an exam, and ongoing quality control. The statement also alludes to the global nature of the credential, meaning that it will embody not just U.S. GAAP, but international standards as well, such as IFRS.
More details: In its announcement, the AICPA did not go into certain details, but BVWire gleaned some from a session we attended at the recent ASA’s 12th Annual Fair Value Conference in Los Angeles, conducted by Jeffrey High of the AICPA. He confirmed the international focus of the new credential, saying the organization was working with regulators in other countries. He also mentioned that about 30 hours of training in financial instruments would be required. Someone in the audience asked how the CVFI was different from a CFA designation. High remarked that CFAs are not necessarily versed in financial reporting and disclosure, which, of course, would be stressed in the CVFI program. He also said that the quality control process would be similar to the existing peer review process for CPAs.
For more information, the AICPA has set up a special page that includes links to the exposure draft and a sign-up form so that you can get future alerts as the credential develops.
The CVFI framework describes "how much" work needs to be done, not "how to" do the work. For that, BVR has resources available, including some past webinars you can listen to, such as: Valuing Loan Guarantees, Valuation of Complex Financial Instruments in the Energy Sector, Valuation of Options and Option-Like Instruments, and many more.