Giving

Valuation
a Voice
Annual report 2014-15

international valuation
standards council

The International Valuation Standards

Council (IVSC) is the global standard
setter for valuation practice and the
valuation profession.
We serve the public interest by
promoting consistent compliance with,
and implementation of, high-quality,
internationally accepted standards in
the preparation and presentation of
valuations around the world.

IVSC Annual Report 2014-15 01

Table of
contents

Reports
Report from the Chairman,
IVSC Board of Trustees
Report from the Chairman,
IVSC Professional Board
Report from the Chairman,
IVSC Standards Board
Report from the Chairman,
IVSC Advisory Forum
Members of the Board
of Trustees
Members of the Professional
Board
Members of the Standards
Board
Members of the Advisory
Forum Working Group
IVSC Sponsors
IVSC Member Organisations

02
04
06
08
10
11
11
12
13
14

Financial Statements
Trustees and Professional
Advisers
17
Trustees Report
18
Statement of Trustees
Responsibilities
19
Independent Auditors Report
to the IVSC Board of Trustees
20
Income Statement
21
Statement of Changes In Equity
21
Statement of Financial Position
22
Statement of Cash Flows
23
Notes to the Financial Statements 24

02 IVSC Annual Report 2014-15

Report from the

Chairman, IVSC
Board of Trustees
Sir David Tweedie
REVIEW REPORT
At the end of last year, the trustees commissioned
an independent assessment six years on from our
last restructure in 2008 to ensure the organisation
is equipped for the next phase of development. As
part of the review, the IVS Review Group (Review
Group) focused on the governance, financial stability,
processes and output of the IVSC in order to provide
suggestions for improvements which would better
support future standards development and adoption.

Sir David Tweedie

Chairman, IVSC Board of Trustees

This report comes at a time when the

International Valuation Standards Council
(IVSC) is encountering a period of
challenge and change. For a number of
years the organisation has successfully
operated in the dual role of global
valuation standards setter as well as
promoting the profession itself. In order
to continue to be successful, we need
to remain relevant and able to respond
robustly to the challenges our members
face in valuing real estate, businesses and
financial instruments. These environments
are evolving and we need to feel confident
that, as the global standard setter, we can
change with them.

The Review Groups analysis confirmed the need

for international standards and importantly, that the
IVSC is the most appropriate organisation to develop
them. However, it also found that the IVSC needs to
improve communication with stakeholders and increase
confidence in its future strategy, mission and objectives
and to ensure that the organisation is financially stable
and properly resourced to successfully conduct its
current and future activities.
The Review Group concluded that reform of the IVSC
is needed if it is to fulfil its potential effectively, improve
the technical quality of the standards it produces and
remain the recognised body for the development of
globally accepted valuation standards.
These are the crucial challenges we now face and
which cannot be ignored. It is clearly important that
we consult and communicate with our key audiences
as the next year unfolds in what is a pivotal period for
the IVSC as a whole. We will continue to work hard to
achieve our objectives and I personally look forward
to meeting many members, sponsors and other key
audiences to discuss these topics in the months ahead.
During my 11 years at the International Accounting
Standards Board and, earlier, at what is now the
International Auditing and Assurance Standards Board,
I very quickly came to the view that global standards
involve a partnership in which the standard setter, in
essence, simply expresses what is acceptable to the
constituency it serves. Go too far and the standard
will be rejected. Fall below the standards of the major
professional organisations and the standards will be
ignored. To strengthen such a partnership within the
valuation profession, the Board of Trustees needs to
better understand any frustrations with the present
situation and how we can move forward together. We
must aim to create both a united, respected valuation
profession which takes its place alongside other
globally recognised professions and a set of standards
which meets the needs of countries whose profession

IVSC Annual Report 2014-15 03

We will work hard to achieve our renewed

objectives and I personally look forward to meeting
many members, sponsors and other key audiences
to discuss these topics in the months ahead.
is not well developed and yet can be accepted as the
core pronouncements of the established Valuation
Professional Organisation (VPOs).
In response to the Review Report, the IVSC Trustees
have released an Engagement Paper. There are several
recommendations of the Review Group on which
the Trustees are seeking views before coming to
conclusions; but underlying the thrust of the Report
is the need for a cohesive profession and interaction
between the IVSC and its stakeholders. The IVSC does
not rule the profession it is the professions servant
but to serve the professions needs we need to ensure
we do not head off in a direction with which our
members do not approve.
The Trustees would like to hear how we can work
together so that you do not feel that the IVSC operates
in a vacuum and that you have your say; how we
can help you serve your members; how we can get
international recognition of this profession; and how we
can produce standards of appropriate quality which
you can use and which are respected by outside bodies
as being of high quality free from the taint of selfinterest. Do please respond to the Engagement Paper.

APEC
Thanks to the efforts of IVSC trustee, Nick Brooke,
the Asia-Pacific Business Advisory Council (ABAC),
invited the IVSC to lead a task force on the valuation
infrastructure for the Asia Pacific Economic
Cooperation Forum (APEC). During the past 12 months
the IVSC has made significant progress in responding
pro-actively to this invitation through the development
of reports to ABAC. As a consequence, a letter from
ABAC to the Ministers of Finance of the 21 APEC
economies was delivered in the lead up to the APEC
meetings held in Beijing in October (Ministers meeting)
and November 2014 (Leaders meeting). The letter
included recommendations on reinforcing the financial
architecture in the APEC economies and on the case
for the adoption of common valuation standards, the
involvement of the IVSC and the importance of a strong
valuation profession across the region. The IVSC will be
able to use this endorsement to gain in country traction
in those of the 21 economies where we do not have
strong recognition; to access regulators; and to raise
our profile via APEC workshops and other forums. This
is a very significant achievement on which the IVSC can
build for the future if we can secure adequate resources
for this initiative.

Thanks
The IVSC depends on the contributions and efforts
from many people and organisations.
Over 100 individuals, professionals at the top of their
game in various disciplines and industries, give their
time freely to sit on IVSC Boards and working groups.
A few words are really not enough to thank them for
their contribution to the global valuation profession.
At the 2014 AGM in Toronto we said goodbye to Board
members whose terms of office have come to an end.
Three members of the Standards Board who have been
on the Board since it first started work in 2008 Frank
Bollmann, who has served as vice chair, Tom Boyle and
Simon Landy. Likewise on the Professional Board, Roy
Farthing the vice chair and David Faulkner, both
members of the Board since its inception, came to the
end of their second term of office. Chris Mercer also left
the Professional Board, having come to the end of his first
term. We thank you all for your hard work and dedication.
We also said goodbye to some long standing members
of the Board of Trustees. Lee Hackett, Patrick
Gounelle and Madam Liu Ping came to the end of
their second terms of office. All were members of the
first IVSC Board of Trustees in 2008 and have played
a crucial role in the development of the IVSC since its
restructuring. Aki Watanabe also retired at the end
of his first term of office. Aki has played a key role in
increasing awareness of the IVSC in Japan and we will
all long remember the AGM in Tokyo that he and his
staff played such a large part in organising.
I would also like to thank the IVSC staff during this
challenging time, particularly April Mackenzie for her
support as Interim CEO and Marianne Tissier and Chris
Thorne for their work and contribution to IVSC over
the years. Thanks also to those organisations who have
helped through the provision of additional staff resource.

FUTURE
Our Objectives over the next 12 months are to
strengthen the IVSC boards and to increase recognition
of the valuation profession. With your help the trustees
are confident of success.
Sir David Tweedie
Chairman, IVSC Board of Trustees

04 IVSC Annual Report 2014-15

report FROM the

Chairman, IVSC
Professional Board
Greg Forsythe
Work is also well progressed on a framework that will
set out the concepts and drafting conventions to be
used in the IPSs.
Specifically we have focussed on three of the standards:
>>IPS 101 Entry Requirements to Professional Valuer
Accreditation Programmes, that will specify
the principles to be used when setting and
communicating requirements for entry to such
programmes.

GREG FORSYTHE
Chairman, IVSC Professional Board

The Professional Board has continued

to work on many fronts in helping to
develop the valuation profession globally.
We have made considerable headway
in developing a suite of International
Professional Standards (IPSs). The IPSs
will be a set of high-quality benchmarks
for Valuation Professional Organisations
that promote the professional knowledge,
skills, values, ethics and attitudes required
of professional valuers.

>>IPS 102 Professional Skills and Ethics, that will specify

the capability areas and learning outcomes required
by the end of Initial Professional Development in
order to perform a role as a professional valuer.
>>IPS 103 Technical Knowledge, that will include a
framework listing competence areas and learning
outcomes for the following asset classes real estate;
plant, machinery and equipment; and business
valuations and intangible assets and a framework
that is common to all three asset classes.
Work is shortly to begin on the remaining proposed
standards: IPS 104 Practical Experience; IPS 105
Assessment of Professional Competence; and IPS
201 Continuing Professional Development, with the
intention that the full suite of the standards will be
released for exposure early 2016.
It has been notable that since issuing the Discussion
Paper regarding the proposed IPSs some two years
ago, there have been significant developments in the
valuation profession around the world and discussion
about the need for and benefit of such standards.
As we have communicated, it is in the public interest
to enhance the quality and consistency of valuation
practice throughout the world, and thereby strengthen
the publics confidence in the competence of the
valuation profession globally. Professional Board
members have been involved in supporting and driving
many of these activities.

IVSC Annual Report 2014-15 05

Examples of such activities include the Public Interest

Professional Infrastructure topic in the U.S. Professional
Board member Marianna Todorova and I, as well as
other IVSC representatives, and VPO members and
sponsors are significantly involved in the various work
streams that have made rapid progress in recent
months on a topic that has significant global relevance.
Other Board members have been involved in speaking
engagements on behalf of the IVSC in many parts of
the world.
On behalf of the Board I have continued working closely
with the IVSC Advisory Forum Working Group (AFWG).
The Board reviewed a Model Guide of Governance for
VPOs, and a related Governance Assessment Tool for
a VPO prepared by the AFWG prior to approving their
publication.
As discussed previously, the Board is developing a
series of Illustrative Examples to explain some of the
concepts in the IVS Framework. Comments received
following exposure of the first chapter Bases of Value
were considered by the Board and an amended draft is
currently under discussion with the Standards Board.
I am once again immensely grateful to the members
of the Board and to Mary-Jane Andrews, the Technical
Advisor to the Board, for their commitment and energy.
The Board has continued making significant progress
as it leads and contributes to the development of the
valuation profession globally.

Greg Forsythe
Chairman, IVSC Professional Board

It is in the public
interest to enhance
the quality and
consistency of
valuation practice
throughout the
world, and thereby
strengthen the
publics confidence
in the competence
of the valuation
profession globally.

06 IVSC Annual Report 2014-15

report FROM the

Chairman, IVSC
Standards Board
Steven J Sherman
I reported last year on the project being led by the
Standards Board in support of the Board of Trustees
strategic objective to promote the adoption and wider
use of the IVSs. This has resulted in the signing of
a landmark memorandum of understanding (MoU)
between the IVSC and 20 Valuation Professional
Organisations. The MoU requires signatories to
either adopt the IVSs, or where they produce their
own standards, to implement a process to eliminate
remaining material differences within a three year
period so that these are compliant with the IVSs.

Steven J Sherman
Chairman, IVSC Standards Board

I am pleased to report on another year

during which the Standards Board has
made significant progress and is looking
forward to some exciting developments in
the coming 12 months.

It is important that the IVSs continue to address

matters that are relevant to those who provide and
rely on valuations. It is also important that they are
presented in a manner that is as clear and unambiguous
as possible. In recognition of these points the Board
undertook two consultations in 2014.
>>On what agenda priorities should be for the next
three years;
>>On the structure and presentation of the standards
and how this can be improved.
The responses received indicated that most accept and
understand the need for the standards to contain both
mandatory requirements and guidance on how those
requirements can be applied in different situations.
However, it was also clear many considered the
distinction between the two types of pronouncement
was still insufficiently clear in the current standards. The
Board has endeavoured to reflect the views expressed
in this consultation in its proposed amendments to the
IVSs, an exposure draft of which was released for public
comment earlier this year.

It is important that the IVSs continue to

address matters that are relevant to those
who provide and rely on valuations.

IVSC Annual Report 2014-15 07

In preparing this exposure draft, the Board placed a

high priority on suggestions from our stakeholders
regarding how to move towards our objective of
accepted, high quality, global valuation standards.
The recommendations from the review of the IVSC will
also be considered before the amended standards are
issued. This may result in an additional Exposure Draft
being issued later in 2015, possibly leading to a deferral
in the normal effective date of 1 January 2016 for the
revised standards.
The Board continued its focus on the valuation of
financial instruments and is receiving ever increasing
interest in support of this effort from practitioners,
regulators and financial institutions. In early 2015, the
Board released interim guidance on Credit and Debit
Valuation Adjustments (CVA/DVA). The decision was
made to issue this as an interim guidance because
within the banking sector there continues to be debate
on how these adjustments interact with adjustments
for the cost of funding uncollateralised positions (FVA)
and other costs incurred by issuers. However, feedback
during the consultation process confirmed that CVA/
DVA is something that has to be considered by any
corporate that uses derivatives and guidance on the
topic was greatly needed, FVA itself is a topic that
is the subject of ongoing debate within the financial
sector and the Board has launched a project on this,
which may lead to some consequential changes to the
interim CVA/DVA guidance in due course.

Among the other highlights of the past 12 months

has been the launch of the Recovery and Resolution
project. The initial focus of this project is on valuations
required under the regulations that are emerging
around the world under principles issued by the
Financial Stability Board aimed at creating consistent
frameworks across the major economies for the
rescue of systemically important financial institutions.
However, it is recognised that many of the principles
will also be applicable to valuations required to support
recovery and restructuring procedures for other types
of business and the project is being extended to
reflect this.
I conclude by thanking my fellow Board members for
the considerable time and effort invested in moving our
agenda forward. I also acknowledge the contribution
that volunteers on our various project working groups
make by providing their expertise and enthusiasm.
Having such a broad base of knowledge and experience
involved on working groups helps ensure that the
standards we develop are of the high quality that the
market needs.

Steven J Sherman
Chairman, IVSC Standards Board

Our Memorandum of Understanding which has

been signed by some of the biggest professional
valuation bodies in the world means that these
institutions are committed to the development
of international standards which value assets
in conformance, irrespective of where they are
located. This is a landmark achievement and
represents a major step towards getting global
adoption of international valuation standards.

08 IVSC Annual Report 2014-15

REPORT FROM THE

CHAIRMAN, IVSC
ADVISORY FORUM
John Martin
The May meeting of the Working Group in London
focussed on the Review Committee recommendations.
The WG had provided an overview of the IVSC to
the Board of Trustees and it was pleasing that the
views of the WG members aligned with the key
recommendations of the review committee.
A consultation process is underway and an engagement
paper has been issued to all members, available on the
IVSC website.

John Martin
Chairman, IVSC Advisory Forum

The Advisory Forum Working Group

(AFWG) continues to undertake a
number of projects on behalf of the
Forum. During the past year, the AFWG
has provided initial commentary to the
Professional Board on initial drafts
prepared as part of the project to
develop International Professional
Standards. A Model Governance Guide
for a VPO and a supporting Governance
Assessment Tool have been issued in
May 2015. This is the first of a number of
proposed practical guides and resources
to support the earlier guide produced by
the AFWG, Establishing and Developing
a Valuation Professional Organisation,
published in 2013.

It has been recommended that the Advisory Forum

(AF) role be expanded and the WG is examining ways
to obtain greater engagement with all AF members and
the IVSC Boards.
We are working with the IVSC Boards to ensure the
relevance and recognition of standards; the adoption
or compliance with IVS; promotion of the valuation
profession globally and improved communications.
The WG is preparing the Agenda for the October
meeting in Paris which will be circulated shortly.
The format of the Toronto meeting which included
six presentations on a cross section of valuation topics
was well received.
It has been decided to reduce the presentations to four
in Paris, given the focus will be on the outcomes of the
consultation process.
Your attendance at the AGM in Paris is important to
ensure VPOs are engaged and have ownership of the
way forward for the IVSC. More importantly, there are
a number of important recommendations to be voted
on at the AGM.

IVSC Annual Report 2014-15 09

We continue to broaden our efforts to strengthen ties

with all IVSC members, not just those long standing
members or those with a tradition of IVSC involvement.
We are seeking to develop relationships with those
bodies who are not yet members, encouraging them
to seek membership.
To this end, the AFWG will be introducing a regular
newsletter for circulation to members.
We welcomed the following new members to the
Advisory Forum Working Group in October:
>>Karin Lusnic, Slovenian Institute of Auditors
>>Pierre Maille, Canadian Institute of Chartered
Business Valuators
>>Dan Van Vleet, American Society of Appraisers
Eleanor Joy (CICBV) and Tony Aaron (ASA), founding
members of the AFWG, retired after a number of
years service and we thank Eleanor and Tony for their
significant contributions to the AFWG.
In concluding, I would like to thank the Appraisal
Foundation for allowing staff member, Paula
Douglas-Seidel, to provide administrative support
to the Forum and, of course, thanks to Paula herself.
I must also thank all members of the Working Group
who volunteer their time and expertise, and for the
support provided by their organisations that allows
them to attend the various meetings.
The issues facing the valuation profession are varied
and complex. As it stands, the Forum provides one of
the best opportunities for all valuation disciplines to
unite and work together as a truly professional global
valuation body.

John Martin
Chairman, IVSC Advisory Forum

We continue to
broaden our efforts
to strengthen
ties with all IVSC
members, not just
those long standing
members or those
with a tradition of
IVSC involvement.

10 IVSC Annual Report 2014-15

MEMBERS OF THE
Board of Trustees

Sir David Tweedie (Chairman)

UK

Nicholas Brooke (Vice Chairman)

Hong Kong
Roel Campos (Vice Chairman)
USA
Mark Gerold (elected Oct 2014)
UK
Patrick Gounelle (completed term Oct 2014)
France
Zhang Gouchun (elected Dec 2014)
PR China
Lee Hackett (completed term Oct 2014)
USA
Malcolm Knight
Canada
Ping Liu (completed term Oct 2014)
PR China
Christian Mouillon (elected Oct 2014)
France
Jens Roder
Denmark
John Smith
USA
Ethiopis Tafara (elected Mar 2015)
USA
Frank Vettese
Canada
Akihiro Watanabe (completed term Oct 2014)
Japan
Tatsumi Yamada (elected Oct 2014)
Japan

IVSC Annual Report 2014-15 11

Members of the
Professional
Board 201415

Greg Forsythe (Chairman)

Director, Business Valuation Practice, Deloitte
Financial Advisory Services LLP, USA
Marianna Todorova (Vice Chairwoman)
Director in the Office of Professional Practice,
Duff & Phelps LLC, USA
Roy Farthing (Vice Chairman)
Partner, Valuation and Business Modelling and
leaderof the Capital Equipment Group, EY, Australia.
(term completed Oct 2014)
Mauro Bini
Professor at Bocconi University, Milan and Chairman
of the Management Board of the Organismo Italiano
di Valutazione (OIV), Italy
Eleanor Joy
Associate Partner Deals Valuations, Forensic and
Disputes, PWC, Canada (appointed Oct 2014)
David Faulkner
Regional Director, Consultancy and Valuation,
Colliers International, Hong Kong (term completed
Oct 2014)
Nick French
Professor of Real Estate in the Department of Real
Estate and Construction, Oxford Brookes University,
UK
Chun-kong Lau
International Director and Head of Valuation
Advisory Services Asia, JLL, Hong Kong (appointed
Oct 2014)
Chris Mercer
Founder and CEO of Mercer Capital, USA (term
completed Oct 2014)
Doug McPhee
Partner, Corporate Finance, KPMG London and
Global Head, Valuation Services, UK
Eric Teo
CEO, Institute of Valuers and Appraisers of Singapore
and Executive Director, Transaction Advisory
Services, EY, Singapore (appointed Oct 2014)
Jiang Wei
Professor and Head of the Department of Finance
in the College of Economics at Shenyang University,
PR China

Members of the
Standards Board
201415

Steven J Sherman (Chairman)

Managing Director and head of Loop Capitals
Financial Consulting Services business, USA
Chris Stanley (Vice Chairman)
Director, Telfer Young, New Zealand
Frank Bollmann (Vice Chairman)
Managing Director of Vossius & Partner, Germany
(term completed Oct 2014)
Thomas Boyle
Chief Appraiser, Senior Vice President, US Bank Real
Estate, USA (term completed Oct 2014)
Ragveer (Raj) Brar
Manager, Valuation & Controls, Prudential Regulation
Authority, Bank of England, UK
Ana Castaeda-Ortega
CEO, InterMoney Valora Consulting SA, Spain
Paul Hawkes
Chief Financial Officer, Weisshorn Re
Simon Landy
Managing Director, Primo Co. Ltd and Executive
Chairman, Colliers International, Thailand (term
completed Oct 2014)
Cindy Ma
Managing Director and Co-Head of the Portfolio
Valuation practice, Houlihan Lokey, USA
Leigh Miller
Global and Americas Valuation & Business modelling
Leader for Transaction Advisory Services, EY, USA
(appointed Oct 2014)
Andreas Ohl
Partner, Leader Valuation Measurement, PWC, USA
(appointed Oct 2014)
Andrew Renshaw
Lead Director for Professional and Advisory Group,
member UK board and Head of Valuation Business,
JLL, UK (appointed Oct 2014)

12 IVSC Annual Report 2014-15

Members of the Advisory

Forum Working Group
201415

John Martin (Chairman)

Australian Property Institute

Anthony Aaron
American Society of Appraisers (until Oct 2014)
David Bunton
The Appraisal Foundation
Menhai Chen
China Appraisal Society
KK Chui
Hong Kong Institute of Surveyors
Gilles de Courcel
Fdration Franaise des Experts en Evaluation
Ben Elder
Royal Institution of Chartered Surveyors
Eleanor Joy
Canadian Institute of Chartered Business Valuators
(until Oct 2014)
Karin Lusnic
Slovenian Institute of Auditors (from Oct 2014)
Pierre Maill
Canadian Institute of Chartered Business Valuators
(from Oct 2014)
Paul Olscamp
Appraisal Institute of Canada
Leslie Sellers
Appraisal Institute (USA)
Leandro Escobar Torres
Asociacin Profesional de Sociadades de Valoracin
(ATASA)
Daniel Van Vleet
American Society of Appraisers (from Oct 2014)

IVSC Annual Report 2014-15 13

IVSC SPONSORS

The IVSC is grateful to the following

organisations who provided financial
support to the IVSC during the 201415
financial year.

American Appraisal Associates Inc

American Society of Appraisers
The Appraisal Foundation (US)
Appraisal Institute (US)
Appraisal Institute of Canada
BDO
BNP Paribas
Canadian Institute of Chartered Business Valuators
China Appraisal Society
Colliers International
Deloitte Touche Tohmatsu Ltd
Duff & Phelps, LLC
EY, LLP
Grant Thornton
Houlihan Lokey Inc
JLL
KPMG, LLP
Organismo Italiano di Valutazione
PwC, LLP
RICS
UBS
The City of London Corporation
provides financial support to the location
of the IVSC office in the City of London

14 IVSC Annual Report 2014-15

IVSC
member
organisations

PROFESSIONAL valuation
organisation members
Australia
Australian Property Institute

Belarus (Republic of)

Belarusian Society of Valuers

Bosnia and Herzegovina

Association of Certified Appraisers
in Bosnia and Herzegovina

Botswana
Real Estate Institute of Botswana

Brazil
Instituto Brasileiro Avaliacoes

Bulgaria
Chamber of Independent Appraisers
in Bulgaria

Canada
Appraisal Institute of Canada
Canadian Institute of Chartered Business
Valuators (CICBV)

China

Georgia

Mexico

Association of Professionals on Land

and Realty

Federacin de Colegios, Institutos y

Sociedades de Valuadores de la
Republica Mexicana, A.C. (FECISVAL)

Expertise Institute for Valuation

of Assets of Georgia

Hong Kong, China

Hong Kong Institute of Surveyors

India
The Practising Valuers Association
of India

Indonesia

Namibia
Namibian Institute of Valuers

The Netherlands
Raad voor Onroerende Zaken (ROZ, the
Real Estate Council)

New Zealand

Indonesian Society of Appraisers

Property Institute of New Zealand

(PINZ)

Italy

Norway

Consiglio Nazionale Geometri

Norges Takseringsforbund

Japan

Nigeria

Japanese Association of Real Estate

Appraisal

Nigerian Institution of Estate Surveyors

and Valuers

Kazakhstan

Philippines

Chamber of Professional Appraisers

of Kazakhstan

Institute of Philippine Real Estate

Appraisers (IPREA)

Republican Chamber of Appraisers

of Kazakhstan

Poland
The Polish Federation of Valuers
Associations

China Appraisal Society

Kenya

Colombia

Institution of Surveyors of Kenya (ISK)

Romania

Registro Nacional de Avaluadores

Korea

Croatia

Korea Appraisal Board

The National Association of Romanian

Valuers

Croatian Society of Valuers

Korea Association of Property

Appraisers

Russia

Latvia

Self-Regulated Inter-Regional
Appraisers Association (SIAA)

Egypt
The Egyptian Association of Real Estate
Appraisers

Latvian Association of Appraisers

Finland

Macedonia

Finnish Association for Real Estate

Valuation

Council of Valuation of Republic

of Macedonia

Malaysia
The Royal Institution of Surveyors,
Malaysia

Russian Society of Appraisers

Serbia
National Association of Valuers of Serbia

Slovenia
Slovenian Institute of Auditors

IVSC Annual Report 2014-15 15

South Africa

Institutional members

Sri Lanka

South African Institute of Valuers

Australia

Spain

Australian Valuers Institute

Sri Lanka Accounting and Auditing

Standards Monitoring Board

Asociacin Profesional de Sociedades

de Valoracin

Bulgaria

Sweden
ASPECT Association for Chartered
Surveying, Property Evaluation and
Transactions

Thailand
Thai Valuers Association

Ukraine
Ukrainian Society of Appraisers

United Kingdom
The Royal Institution of Chartered
Surveyor

United States of America

American Institute of Certified Public
Accountants
American Society of Appraisers
Appraisal Institute

provisional MEMBERS
Bangladesh
Institute of Chartered Valuers
Bangladesh

Corporate members
Hong Kong
Greater China Appraisal Ltd

Canada
International Association of Consultants,
Valuators and Analysts

Japan
Japan Valuers Co. Ltd

Malaysia
Khong & Jaafar Sdn

Chamber of Professional Valuers

Eurasia
Council of Valuers Associations
of Eurasia

France
Fdration Franaise des Experts
en Evaluation

India

Ukraine
Federation of Appraisers of Business
and Intellectual Property

United Arab Emirates

Department of Municipal Affairs,
Emirate of Abu Dhabi
Taqyeem Real Estate Appraisal Centre,
Dubai Land Dept

United Kingdom

Institute of Cost Accountants of India

Institute of Chartered Accountants

in England and Wales

Italy

United States of America

Consiglio Nazionale dei Dottori

Commercialisti e degli Esperti Contabili

Appraisal Foundation

E-Valuations Instituto di
Estimo e Valutazioni

Lithuania
State Budgetary Institution Property
Valuation Oversight Agency

National Council for Real Estate

Investment Fiduciaries (NCREIF)

Vietnam
Price Control Department, Ministry
of Finance

Macedonia

ACADEMIC members

Bureau for Forensic Expertise

Russia

Namibia
Ministry of Lands and Resettlement

The State University Higher School of

Economics, Institution for Real Estate
Economics, Moscow

Russian Federation

Switzerland

Ministry of Economic Development

Swiss Institute of Real Estate Appraisal

(SIREA)

Saudi Arabia
Saudi Authority for Accredited Valuers

Turkey

Singapore

Ankara University, Real Estate

Development Department

Institute of Valuers and Appraisers

of Singapore

USA

South Africa

Leventhal School of Accounting,

University of Southern California

South African Council for Property

Valuers Profession (SACPVP)

16 IVSC Annual Report 2014-15

IVSC FINANCIAL
STATEMENTS
31 MARCH 2015

Financial Statements
Trustees and Professional
Advisers
17
Trustees Report
18
Statement of Trustees
Responsibilities
19
Independent Auditors Report
to the IVSC Board of Trustees
20
Income Statement
21
Statement of Changes In Equity
21
Statement of Financial Position
22
Statement of Cash Flows
23
Notes to the Financial Statements 24

IVSC Annual Report 2014-15 17

TRUSTEES and professional advisers

year ended 31 March 2015

Company registration number

FC030067

The board of trustees

Sir David Tweedie (Chairman)
Nicholas Brooke (Vice Chairman)
Roel Campos (Vice Chairman)
Mark Gerold (elected Oct 2014)
Patrick Gounelle (completed term Oct 2014)
Zhang Gouchun (elected Dec 2014)
Lee Hackett (completed term Oct 2014)
Malcolm Knight
Ping Liu (completed term Oct 2014)
Christian Mouillon (elected Oct 2014)
Jens Roder
John Smith
Ethiopis Tafara (elected Mar 2015)
Frank Vettese
Akihiro Watanabe (completed term Oct 2014)
Tatsumi Yamada (elected Oct 2014)

Registered office
200 W. Madison Street, Suite 1500
Chicago, Illinois, 60606
United States of America

Operating office
1 King Street
London
EC2V 8AU
United Kingdom

Auditor
Crowe Clark Whitehill LLP
St. Brides House
10 Salisbury Square
London
EC4Y 8EH
United Kingdom

Bankers
HSBC Bank PLC
153 North Street
Brighton
East Sussex
BN1 1SW
United Kingdom

18 IVSC Annual Report 2014-15

TRUSTEES REPORT
year ended 31 March 2015

The Trustees present their report and financial statements for the year ended 31 March 2015.

Principal activity and review of the business

The International Valuation Standards Council (IVSC) is the global standard setter for the valuation profession.
Its mission is to set and maintain effective, high quality global standards for the performance of valuations by the
valuation profession and to contribute to the development of the worldwide valuation profession, thereby serving
the public interest.

Statement as to disclosure of information to auditors

In so far as the Trustees are aware:
>>there is no relevant audit information of which the companys auditor is unaware, and
>>the Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit
information and to establish that the auditor is aware of that information.

Auditor
Crowe Clark Whitehill LLP has indicated its willingness to be reappointed.
Approved and authorised for issue on 1 July 2015 by the Trustees and signed on its behalf by:

Sir David Tweedie

Chairman

IVSC Annual Report 2014-15 19

STATEMENT OF TRUSTEES
RESPONSIBILITIES
year ended 31 March 2015

The Trustees are responsible for preparing the financial statements in accordance with applicable law and
regulations.
The Bylaws of the Council require the Trustees to prepare financial statements for each financial year. Under
the Articles of Incorporation the Trustees have elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board
(IASB) and applicable law.
International Accounting Standard 1 requires that financial statements present fairly for each financial year the
Councils financial position, financial performance and cash flows. This requires faithful representation of the effect
of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets,
liabilities, income and expenses set out in the International Accounting Standards Boards Framework for the
Preparation and Presentation of Financial Statements. In virtually all situations, a fair presentation will be achieved
by complying with all applicable IFRSs. In preparing these financial statements, the Trustees are also required to:
>>select suitable accounting policies and then apply them consistently;
>>present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
>>provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable
users to understand the impact of particular transactions, other events and conditions on the Councils financial
position and financial performance; and
>>prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Council will continue in business.
The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any
time the financial position of the Council. They are also responsible for safeguarding the assets of the Council and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

20 IVSC Annual Report 2014-15

Independent Auditors Report

to the IVSC Board of Trustees
year ended 31 March 2015

We have audited the financial statements of The International Valuation Standards Council (the Council) for the
year ended 31 March 2015 which comprise the Income Statement, Statement of Changes in Equity, Statement of
Financial Position, Statement of Cash Flows and the related notes numbered 1 to 15.
The financial reporting framework that has been applied in their preparation is applicable law and International
Financial Reporting Standards issued by the International Accounting Standards Board (IFRS).
This report is made solely to the Trustees, as a body, in accordance with our agreed terms of engagement. Our
audit work has been undertaken so that we might state to the Trustees those matters we are required to state to
them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than The International Valuation Standards Council and the Trustees as a
body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of trustees and auditors

As explained more fully in the Statement of Trustees Responsibilities, the Trustees are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Boards
Ethical Standards for Auditors.

Scope of the audit of the financial accounts

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether caused
by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the entitys
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Trustees; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the trustees report to identify material
inconsistencies with the audited financial statements and to identify any information that is apparently materially
incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the
audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications
for our report.

Opinion on financial statements

In our opinion:
>>the financial statements give a true and fair view of the state of the Councils affairs as at 31 March 2015 and of its
deficit for the year then ended; and
>>the financial statements have been properly prepared in accordance with IFRS

Crowe Clark Whitehill LLP

Statutory Auditor
London
3 July 2015

IVSC Annual Report 2014-15 21

INCOME STATEMENT
year ended 31 March 2015

2015

2014

1,702,331

1,681,049

(1,796,937)

(1,505,395)

(155,100)

(149,797)

(249,706)

25,857

Notes

Income

Standard setting and professional development

Publications and associated costs
OPERATING (DEFICIT)/SURPLUS BEFORE TAX

Tax expense

(DEFICIT)/SURPLUS FOR THE YEAR

(249,706)

25,857

There was no other comprehensive income for the year.

STATEMENT OF CHANGES IN EQUITY

year ended 31 March 2015

Balance at 1 April 2014

Total recognised (deficit)/surplus for the year
Balance at 31 March 2015

The notes on pages 24 to 32 form part of these financial statements.

2015
Retained
surplus

2014
Retained
surplus

818,505

792,648

(249,706)

25,857

568,799

818,505

22 IVSC Annual Report 2014-15

statement of financial position

AS AT 31 March 2015

2015

2014

4,107

5,924

22,072

26,375

10

228,676

138,699

Prepayments

11

35,011

39,914

Cash and cash equivalents

12

480,995

935,004

770,861

1,145,916

568,799

818,505

102,834

54,039

99,228

273,372

770,861

1,145,916

Notes

Total assets
Non current assets
Property, plant and equipment

CURRENT ASSETS
Inventories
Trade and other receivables

CAPITAL AND RESERVES

Retained surplus

14

CURRENT LIABILITIES
Deferred income
Trade and other payables
TOTAL EQUITY AND LIABILITIES

13

The financial statements on pages 21 to 23 were approved by the Trustees and have been authorised for issue on
1 July 2015 and were signed on its behalf by:

Sir David Tweedie

Chairman
Company registration number: FC030067

The notes on pages 24 to 32 form part of these financial statements.

IVSC Annual Report 2014-15 23

STATEMENT OF CASH FLOWS

year ended 31 March 2015

Total operating (deficit)/surplus

2015

2014

(249,706)

25,857

Depreciation

2,356

7,776

Decrease/(increase) in inventory

4,303

(7,765)

(85,074)

(48,319)

Increase/(decrease) in trade and other payables

(125,349)

107,611

CASH FLOWS FROM OPERATING ACTIVITIES

(453,470)

85,160

(Increase)/decrease in trade and other receivables

Purchase of property, plant and equipment

(539)

(8,885)

CASH FLOWS FROM INVESTING ACTIVITIES

(539)

(8,885)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS

(454,009)

76,275

Opening cash and cash equivalents

935,004

858,729

CLOSING CASH AND CASH EQUIVALENTS

480,995

935,004

The notes on pages 24 to 32 form part of these financial statements.

24 IVSC Annual Report 2014-15

NOTES TO THE FINANCIAL STATEMENTS

AS AT 31 MARCH 2015

1. Authorisation of Financial Statements and Statement of Compliance with IFRS

The Councils financial statements for the year ended 31 March 2015 were authorised for issue and the statement
of financial position signed on the Councils behalf by Sir David Tweedie. The International Valuation Standards
Council was incorporated on 1 April 2004 as a not-for-profit corporation in Illinois, USA.
The Council was registered on 15 February 2011 under the Companies Act 2006 as having a UK establishment
in the United Kingdom.
Basis of preparation
The Councils financial statements have been prepared in accordance with International Financial Reporting
Standards published by the International Accounting Standards Board (IFRS) and applicable law.
The principal accounting policies adopted by the Council are set out in note 2. The policies have been consistently
applied to all years presented, unless otherwise stated.
The functional currency of the Council is UK Sterling. Most of the Councils income and cash inflows are
denominated and settled in US Dollars. Most of the Councils expenses and cash outflows are denominated
and settled in UK Sterling. The presentational currency of the financial statements is US Dollars.

2. Accounting Policies
Income recognition
Income is recognised to the extent that it is probable that the economic benefits will flow to the Council and the
income can be reliably measured. All such income is reported net of discounts and value added and other sales
taxes.
Donations and sponsorships
Donations and sponsorships are recognised in accordance with the period stated in the donor or sponsor
agreement.
Membership subscription fees
Membership subscription fees are recognised in accordance with the membership subscription period (1 April to
31 March).
Publications
Publications income is recognised when the significant risks and rewards of ownership of the goods have passed
to the buyer and the amount of income can be measured reliably.
Royalties
Royalty income arising from the use of the intangible property rights of the Council is accounted for in accordance
with the relevant contracts for the use of those rights by third parties.
Foreign currency exchange
Transactions in currencies other than the functional currency of the Council are recorded at the rates of exchange
prevailing on the dates of the transactions. At each statement of financial position date, monetary assets and
liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the statement of
financial position date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign
currencies are translated at the rates prevailing at the date when the fair value was determined.
Gains and losses arising on retranslation are included in net surplus or loss for the period, except for exchange
differences arising on non-monetary assets and liabilities where the changes in fair value are recognised directly
in equity.

IVSC Annual Report 2014-15 25

2. Accounting Policies (continued)

Tax
For UK tax purposes, the Council has sought and received confirmation from H M Revenue and Customs that
all income received from members is not taxable. The IVSC is only subject to corporation tax on its surplus from
interest receivable and other income.
For US tax purposes, the Council is exempt from federal income taxes under Section 501(c)(3) of the Internal
Revenue Code. Contributions to the Council are deductible for income tax purposes within limitations of the law.
Fixtures, fittings and equipment
Items of fixtures, fittings and equipment are stated at cost of acquisition less accumulated depreciation and
impairment losses. All tangible fixed assets are depreciated over their estimated useful lives using the straight-line
basis.
Furniture, fittings and equipment are depreciated on a straight-line basis over three years.
Trade and other receivables
Trade and other receivables are recognised by the Council and carried at original invoice amount less an allowance
for any uncollectible or impaired amounts.
Other receivables are recognised at fair value.
Estimates and judgements
An estimate for doubtful debts is made when collection of the full amount is no longer probable.
Debts are written off when they are identified as being non recoverable.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand and short term deposits. Short term deposits
are defined as deposits with an initial maturity of three months or less.
Trade and other payables
Trade and other payables are measured at amortised cost.
Standards in issue not yet adapted
The financial statements have been prepared on the basis of accounting standards, interpretations and
amendments effective on 1 April 2014. The Council has concluded that there are no relevant standards or
interpretations in issue not yet adopted which will have a material impact on the financial statements.

26 IVSC Annual Report 2014-15

NOTES TO THE FINANCIAL STATEMENTS

(continued)
AS AT 31 MARCH 2015

3. Revenue

2015

2014

Donations and sponsorships

1,352,216

1,286,826

Membership subscription fees

289,000

319,750

51,527

52,778

9,588

21,695

1,702,331

1,681,049

2015

2014

2,356

7,776

Net foreign currency differences

45,478

5,722

Inventory recognised as an expense

22,068

18,935

Rental expense

161,789

88,837

Auditors remuneration audit services

16,466

17,469

891,466

607,180

Depreciation and amortisation

2,356

7,776

Net foreign currency exchange

45,478

5,722

Publications and related activities

Other income

4. Operating (Deficit)Surplus
Operating profit is stated after charging/(crediting) the following:

Depreciation of property, plant and equipment

Included in standard-setting and professional development:

Employee benefits expense

The auditors are remunerated in Pounds Sterling () and the amounts charged for the year were 11,100
(2014 10,800).

IVSC Annual Report 2014-15 27

5. Employee Expenses

2015

2014

765,804

509,979

Post employment expense for defined contribution plans

33,813

33,474

National insurance costs

91,849

63,727

891,466

607,180

Brought
forward

Additions

Carried
forward

21,664

8,885

30,549

30,549

539

31,088

Brought
forward

Charge for
the year

Carried
forward

16,849

7,776

24,625

24,625

2,356

26,981

Brought
forward

Carried
forward

4,815

5,924

5,924

4,107

Wages and salaries

6. Fixtures, Fittings and Equipment

Cost
To March 2014
To 31 March 2015

Depreciation
To March 2014
To 31 March 2015

Net book value

At March 2014
At 31 March 2015

28 IVSC Annual Report 2014-15

NOTES TO THE FINANCIAL STATEMENTS

(continued)
AS AT 31 MARCH 2015

7. Financial Risk Management Objectives and Policies

The operations of the International Valuation Standards Council expose the Council to numerous financial risks.
Management continuously monitors these risks with a view to protecting the Council against the potential adverse
effects of these financial risks. There has been no significant change in these financial risks since the prior year.
Reserves policy
The Council defines the capital that it manages as the Councils retained surplus. The Councils objectives when
managing capital are:
>>to safeguard the Councils ability to continue as a going concern, so that it can continue to lead as the global
standard setter for the valuation profession; and
>>to maintain sufficient financial resources to mitigate against risks and unforeseen events.
The Councils reserves policy is to hold in excess of $500,000 as cash or cash equivalents to meet the
Councils financial risk management objectives. This is the general policy but it is normal that the balance
will occasionally go below for short periods of time. This has occurred during the period but is expected to
normalise by September 2015.
Credit risk
The Council trades only with recognised, credit worthy customers. Customer balances are checked regularly
to ensure that the risk of exposure to bad debts is minimised.
Liquidity risk
The Council has given responsibility of liquidity risk management to the Board of Trustees.
Management of liquidity risk is achieved by monitoring budgets and forecasts and actual cash flows.
Interest rate risk
The Council maintains surplus funds in liquid bank current accounts. The average interest rate on these bank
current accounts is negligible and none of the bank current accounts have an original maturity of more than
three months.
For a change in interest rates of 1%, the gross interest earned would be negligible.
Currency risk
The Council monitors currency risk closely and considers that its current policies meet its objectives of managing
exposure to currency risk

IVSC Annual Report 2014-15 29

8. Financial Assets and Liabilities

Carrying amount

Fair value

2015

2014

2015

2014

Cash and cash equivalents

480,995

935,004

480,995

935,004

Trade and other receivables

228,676

138,699

228,676

138,699

35,011

39,914

35,011

39,914

Financial assets

Prepayments

Financial liabilities
Deferred income
Trade and other payables

(102,834)

(54,039)

(102,834)

(54,039)

(99,228)

(273,372)

(99,228)

(273,372)

9. Related Party Transactions

Key management compensation
The key management personnel comprised of the Chairman, Chief Executive Officer and the Executive Director.
Their aggregate remuneration for the Year ended 31 March 2015 was $421,196 (2014: $263,002).
Associations with members or sponsors
The following Trustees have been identified as being associated with members or sponsors during the financial
year as indicated below;
Mark Gerold (Member of RICS Governing Council and Knowledge Board and
Director of Valuation and business modelling, Ernst & Young).
Zhang Gouchun

(Secretary General, China Appraisal Society).

Lee Hackett (Executive Vice President of Global Operations, American Appraisal Associates Inc.)
Ping Liu

(Secretary General, China Appraisal Society).

Christian Mouillon (Global Vice Chair, Risk Management, Ernst & Young).
Frank Vettese

(Chief Executive & Managing Partner, Deloitte Canada; Member, Deloitte Global Executive Committee).

Tatsumi Yamada (Partner, KPMG AZSA).

All trustees other than the Chairman are not remunerated but are reimbursed for out-of-pocket expenses incurred
while undertaking work on behalf of the International Valuation Standards Council.

30 IVSC Annual Report 2014-15

NOTES TO THE FINANCIAL STATEMENTS

(continued)
AS AT 31 MARCH 2015

10. Trade and Other Receivables

2015

2014

189,836

92,479

Other receivables

21,276

21,486

Other receivables VAT

8,564

10,852

Accrued income

9,000

13,882

228,676

138,699

Receivable from sponsors and members

Amounts receivable from sponsors and members are non-interest bearing and are generally on 30 day terms.
The ageing of the amounts receivable from sponsors and members is as follows:

2015

2014

655

3,129

30-60 days

2,096

25,000

60-90 days

1,522

187,085

62,828

189,836

92,479

0-30 days

Greater than 90 days

IVSC Annual Report 2014-15 31

11. Prepayments

2015

2014

35,011

39,914

2015

2014

480,995

935,004

CURRENT
Prepayments

12. Cash and Cash Equivalents

Cash at bank

For the purposes of the statement of cash flows the above constitute cash and cash equivalents.

13. Trade and Other Payables

2015

2014

15,076

121,080

11,126

19,968

Accrued liabilities

36,428

104,202

Tax payable PAYE & NI

36,598

28,122

99,228

273,372

Payable to trade suppliers

Other payables

32 IVSC Annual Report 2014-15

NOTES TO THE FINANCIAL STATEMENTS

(continued)
AS AT 31 MARCH 2015

14. Reserves
The retained surplus reflects the accumulated surplus from the Councils activity to date. The reserve is used to
fund the current and future activities of the Council.

15. Events after the reporting period

Subsequent to the reporting period, the IVSC Trustees have undertaken a review of the staff resources required to
implement the changes to the organisation anticipated as a consequence of the report issued by an independent
Review Group in March 2015.
The Trustees determined that the IVSC will benefit, economically and strategically, by collaborating with Valuation
Professional Organisations (VPOs) and other stakeholders, for secondments to serve as the leadership team for
the organisation.
As a result, an alternative staffing model has been adopted that will over time help realise significant cost savings
and enable the organisation to collaborate more closely with VPOs and other stakeholders.
The IVSC has moved from having permanent staff to having a mix of permanent and volunteer staff, whereby
several key stakeholders will provide certain members of their senior staff for secondment to the IVSC.
.

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