UK business valuers who prepare or review valuations within the scope of the International Valuation Standards (IVS) can make a big difference in their direction now. IVSC and their technical committees would very much like your input. The public consultation on Technical Revisions to IVS, which will prioritize and capture targeted revisions to the IVS based on feedback received since their last full update in January 2020, will close on 30 April. To give feedback, click here. (A second consultation on the new standards covering the valuation of financial instruments—new IVS 500—and outlining proposals for new standards covering the valuation of financial instruments closes today. To give feedback, click here.)

Without extensive feedback, IVSC are exposed to expanding their business valuation standards in areas that are of primary interest to select firms or parties, both in the UK and in the many countries around the world that use the IVS as their prime BV professional standards, so these consultations play a critical role in the direction of the entire profession.

A reminder to all BVWire—UK readers that the ICAEW are hosting their annual business valuation summit 20 May. A featured programme will be a chance to hear from HMRC’s Shares and Assets Valuation Assistant Director Steve Thomas on SAV and how business valuers can work more effectively with them. Other ICAEW sessions focus on family business valuation and “Common Sense and Common Errors in BV.”

Meanwhile, thanks to a Kroll/Duff & Phelps sponsorship, the International Valuation Standards Council (IVSC) has announced this year’s International Valuation Webinar Series in May. The series includes five interactive panel discussions:

• Coming Out of Lockdown: The Post-Pandemic Economic Environment and Its Impact on Valuation, 17 May, 13:00-14:30 (BST);

• Valuation and the Rise of Alternative Investments, 20 May, 14:30-16:00 (BST);

• The Treatment of Operating Leases Under IFRS and U.S. GAAP—Valuation Considerations, 21 May, 15:00-16:30 (BST);

• Putting Value at the Core of ESG, 26 May, 12:00-13:30 (BST); and

• What Will LIBOR Cessation Mean for Valuation? 27 May, 12:00-13:30 (BST).

For more information and to register, click here.

Brand intangibles can be difficult to value, particularly for smaller enterprises. Several BVWire—UK readers have commented to us that they’ve done recent work for owners who have failed to protect these assets with even the most basic registrations. For instance, a trademark may be protected simply by incorporation, which at a minimum prevents other competitors from registering the same company name. Research with the Companies House online Name Availability Checker can expose both risks and potential opportunities and help the financial expert assess value. All business valuers should routinely check the corporate registrar to ensure that their valuation clients’ brands meet statutory requirements and aren’t otherwise already conflicted.

Early registration of related URLs is another indication of value that can be overlooked. This can be a critical element of increased value if the owner is branding their own name (a la Victoria Beckham and so many others) or even a specific business process in a competitive market. This approach, of course, also increases risk in the event of lawsuits or unfavorable press. Self-branding also may cause value complications at the time of sale—if the URLs are specific to the seller, the business owner may, in fact, forfeit the rights to use their own name without significantly reducing the sale price of the original assets.

An HMRC 23 March consultation on strengthening the transfer pricing (TP) documentation requirements for auditors and business valuers indicates a continued focus by the UK tax authority on revenue-raising from TP audits. The UK are not alone in their desire to minimise off-shoring assets—and, with proposed corporate rate changes likely in the US by midsummer, a period of rate adjustments and asset movement can be anticipated. Analyses required for transborder taxation are not likely to become more simple.

As the Consultation describes, HMRC wish to:

• Conduct better risk assessment;

• Direct TP enquiries more appropriately; and

• Reduce the time taken to establish the facts when enquiries are opened.

Whether these steps reduce transfer pricing analysis time, or the length and complexity of disputes, remains to be seen. Several analyses, including a thoughtful one by Freshfields Bruckhaus Deringer’s Sarah Bond (for Lexology) point out that “HMRC’s radar for difficult TP cases is already quite finely tuned and thorough testing of the facts will almost always be required for the enquiry to be worked properly and lead to successful resolution.”

The UK have not completely adopted international transfer pricing recommendations from the OECD (their recommendations include three tiers of standardised documentation, but the UK has only implemented one: country-by-country reporting, or CBCR). This documentation only extends to large multinationals, so the remainder of the economy—and their business valuers—are more or less on their own to assess whether tax filings are accurate—and correctly documented. Transfer pricing experts turn to HMRC’s INTM483030—Transfer Pricing: Operational Guidance: Working a Transfer Pricing Case: Transfer Pricing Documentation, though there’s little help on the scope and format of required work.

Every business and profession is asking these questions now, but the issues for real property and business valuers are particularly complex. The Appraisal Foundation (TAF) has launched a survey to gather both diversity-related demographic data and appraisers’ opinions about these issues. The survey is anonymous and asks particularly about the effectiveness and importance of strategies that might contribute to both awareness and access. It takes about three to four minutes to complete, and it is open through 30 April.

17 May: IVSC Coming Out of Lockdown: The Post-Pandemic Economic Environment and Its Impact on Valuation, 13:00-14:30 (BST)

20 May: ICAEW Virtual Valuation Conference, 8:55-16:00, virtual

20 May: ASA First Complex Securities Conference, 16:00-22:40 BT, virtual

20 May: IVSC Valuation and the Rise of Alternative Investments, 14:30-16:00 (BST)

21 May: IVSC The Treatment of Operating Leases Under IFRS and U.S. GAAP—Valuation Considerations, 15:00-16:30 (BST)

26 May: IVSC Putting Value at the Core of ESG, 12:00-13:30 (BST)

27 May: IVSC What Will LIBOR Cessation Mean for Valuation? 12:00-13:30 (BST)

14-15 June: ICAEW Advanced Valuation Techniques, virtual classroom taught live by Steve Shaw

21-25 June: NACVA Business Valuation and Financial Litigation Hybrid and Virtual Super Conference

24-26 October: ASA International Conference, Las Vegas

27-29 October: IVSC Annual General Meeting (programme and format information to come)

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David Foster at ukeditor@bvresources.com.