Valuation Standards
Valuation Standards
At Lotus Amity,as a member of Chartered Accountants Australia & New Zealand, all our valuation reports comply with the mandatory requirements of the Accounting Professional & Ethical Standards Board. Our valuation reports also adhere to the International Valuation Standards.
Accounting Professional & Ethical Standards (APES)
The Accounting Professional & Ethical Standards Board (APESB) is the independent, national body that sets the code of ethics and professional standards with which members of Chartered Accountants Australia & New Zealand must comply.
The specific APESB standard applicable to valuations is the standard APES 225 Valuation Services. APES 225 sets out the professional and ethical obligations in respect of the provision of valuation services, the types of valuation services, engagement terms, matters to be disclosed in a valuation report and quality management and documentation requirements. APES 225, however, does not set out generally recognised concepts and principles in valuation (See IVSC below).
If a valuation report is prepared in a dispute, such as a commercial or family matter, then Lotus Amity reports also comply with the standards APES 215 Forensic Accounting Services. APES 215 sets out the types of forensic accounting engagements, the independence requirements, the obligations when providing Expert Witness Services and the disclosure requirements.
The other standards that Lotus Amity comply with in the provision our valuation services include the standard APES 110 Code of Ethics for Professional Accountants. APES 110 sets out the fundamental principles of ethics to follow which are integrity, objectivity, professional competence, due care, confidentiality and professional behaviour. Other areas of the code include acting with sufficient expertise and acting independently.
Reports provided for court also follow the relevant required court reporting requirements, for example, the Expert Witness Code of Conduct, the provisions of the Uniform Civil Procedure Rules and Divisions 7.1.4, 7.1.5 and 7.1.6 of the Federal Circuit and Family Court of Australia Rules.
International Valuation Standards
The International Valuation Standards Council is the independent global standard setter for the valuation profession. The council comprises of over 200 organisations, including Chartered Accountants Australia & New Zealand, and the standards are used in over 135 countries. ape
The purpose of the IVSC is to create robust valuation standards that ensure consistency, transparency and comparability. The standards comprise of seven general standards that apply to all valuations and eight asset standards. Lotus Amity follows the general standards and the assets standards, including IVS 200 Business and Business Interest, IVS 210 Intangible Assets and IVS 500 Financial Instruments.
There is no mandatory requirement for members of Chartered Accountants & New Zealand to follow the IVS. However, as matter of integrity and professional competence, Lotus Amity produces reports that reference and follow the IVS.
Australian Taxation Office (ATO)
The ATO does not set out valuation standards to follow but it does set out guidelines and general expectation on market valuation reports for tax purposes. When preparing reports that may be required by the ATO, Lotus Amity follows these guidelines.
In the ATO guidelines the ATO refer to complying with the IVS and that a valuation that adopts and follows professional standards adds credibility to a report.
Issues that the ATO raise with valuers include inappropriate methodology and application, lack of appropriate analysis and scrutiny of inputs, unreasonable and incorrect assumptions, and omitted, inconsistent or insufficient evidence