IVSC Seeks Views on Valuation of Property Related to Trade

A paper containing discussion regarding valuation of property related to trade has been issued by the International Valuation Standards Council. These properties basically consist of building or other types of structures, which have been purposely designed for a specified activity related to business. Few examples of property related to trade include theaters, fuel stations, hotels, restaurants, bars clubs, healthcare and casinos.

The International Valuation Standards Council had earlier released a Guidance Note-GN 12 The Valuation of Trade Related Property as well as an exposure draft that had proposed to reissue and update the guidance in a bid to come up with new standards for valuation that were eventually issued in the month of July 2011.

But IVSC decided against finalizing the standard for valuation on this particular topic as questions were being raised whether enough guidance on property related to trade had already been included in other standards for valuation or not.

The paper is seeking inputs from constituent that will help IVSC in determining whether it is necessary and practical to come up with a completely different category of real property for the purpose of valuation, which is further based on the extent to which specialization is given to other types of structures and buildings. The paper also wants to explore different issues that are involved in accepting this type of valuation.

The IVSC is basically responsible for designing transparent and robust processes in order to perform international valuations via a set of valuation standards that have been recognized globally, which is further acceptable to the capital markets firms of the world, regulators as well as to participants of the market. These processes are particularly designed for meeting the challenges and issues of the rapidly changing world economy.

The IVSC’s structure for governance basically consists of two technical boards that work independently. While one of the boards is known as the International Valuation Standards Board, the other one is called the International Valuation Professional Board. In addition to this, it also consists of the Board of Trustees that looks after the funding and gives strategic direction to IVSC.