SAEE - International Valuation Standards Questions and Answers

Question 1

A valuer is engaged to determine the value of a minority shareholding in a private company for a shareholder dispute.
The two disputing shareholders have agreed that the valuation should reflect the specific advantages and disadvantages to them as identified parties, rather than the value to the market in general.
Which IVS 104 Basis of Value is most appropriate for this assignment?

Accepted Answer

Equitable Value

Answer

Market Value

Answer

Synergistic Value

Answer

Investment Value

Question 2

According to the IVS Framework, when can a valuer state that a valuation has been performed in accordance with IVS while also departing from a specific requirement of the standards?

Accepted Answer

Only when specific legislative, regulatory, or other authoritative requirements mandate a departure from IVS.

Answer

When the client provides written consent to the departure.

Answer

When the valuer determines, based on professional judgment, that a departure is necessary to produce a more credible result.

Answer

A valuer can never claim IVS compliance if there is any departure from the standards.

Question 3

Which of the following statements best describes the relationship between the IVS General Standards and the IVS Asset Standards?

Accepted Answer

The General Standards provide the foundational principles for all valuations, and the Asset Standards must be applied in conjunction with them for specific asset types.

Answer

Valuers must comply with either the General Standards or the relevant Asset Standards, depending on the asset type.

Answer

The Asset Standards replace the General Standards when valuing a specific asset class like Businesses (IVS 200) or Real Property (IVS 400).

Answer

The General Standards are recommended best practices, whereas the Asset Standards contain the mandatory valuation requirements.

Question 4

In establishing the Scope of Work under IVS 101, a valuer and their client agree to limit the extent of the valuer's investigations. Under what condition would this limitation prevent the valuer from stating the valuation complies with IVS?

Accepted Answer

If the limitation means the valuer cannot sufficiently evaluate significant inputs and assumptions.

Answer

If the limitation was not documented in writing and signed by both parties.

Answer

If the valuation is for litigation purposes, where no limitations are permitted.

Answer

If the client is a publicly-traded company.

Question 5

A valuer is selecting valuation approaches for a unique, specialized piece of industrial equipment for which there are no recent market transactions and which does not directly generate its own income stream. According to IVS 105 Valuation Approaches and Methods, which approach would be most appropriate to consider?

Accepted Answer

The Cost Approach, by determining the cost to replace the equipment's service capacity.

Answer

The Market Approach, by using transactions for dissimilar assets and making significant adjustments.

Answer

The Income Approach, by estimating a hypothetical income stream for the equipment.

Answer

Any approach is equally valid as long as it is disclosed in the report.

Question 6

A public company is acquiring a smaller, private competitor. The acquirer can achieve significant operational efficiencies and cost savings by integrating the target's operations, making the target worth more to the acquirer than to any other potential buyer. A valuation prepared to quantify this value to the specific acquirer would be based on:

Accepted Answer

Synergistic Value

Answer

Market Value

Answer

Liquidation Value

Answer

Equitable Value