International Valuation Standards Flashcards

Which organization issues the International Valuation Standards (IVS)?

Answer: International Valuation Standards Council (IVSC)

The IVSC is the global body responsible for developing and maintaining the International Valuation Standards.

Under IVS, what is the primary purpose of identifying the 'basis of value' in an assignment?

Answer: To define the type of value being estimated and its assumptions

The basis of value specifies the fundamental measurement premise, such as market value or fair value.

Which of the following is the IVS definition focus of 'Market Value'?

Answer: Estimated amount in an arm's-length transaction between willing parties

Market value assumes a willing buyer and seller acting knowledgeably and without compulsion.

What does the IVS framework require a valuer to do regarding assumptions and special assumptions?

Answer: Clearly state and disclose them in the report

IVS requires assumptions and special assumptions to be explicitly stated and agreed upon.

Which valuation approach estimates value based on comparable transactions in the market?

Answer: Market approach

The market approach derives value by comparing the subject asset to similar assets that have transacted.

Under IVS, the income approach converts future cash flows into a single value primarily through which technique?

Answer: Discounting or capitalization

The income approach uses discounting or capitalization of expected economic benefits.

What is the 'scope of work' under IVS intended to establish before a valuation begins?

Answer: The terms, extent, and limitations of the engagement

Scope of work defines what the valuer will do, including purpose, asset, and any restrictions.