Grasping the Intangible

In recent years demand for the valuation of intangible assets has grown significantly. This is partly in response to the development of accounting standards requiring such assets to be reported at fair value in some situations, but valuations are also required of intangilbles for a number of transactional and tax compliance purposes. However, many regulators and governments around the world have been concerned at the quality of information provided on the value of intangible assets. They are seeking to improve the consistency and transparency of the valuation process and to ensure that valuation professionals are suitably experienced and qualified. In just the last few weeks, two countries have issued valuation standards for this sector. The Italian standard setter, OIV, released Principi Italiani di Valutazione to be effective from 2016. These standards are consistent with international valuation standards but also consider the legal requirements of the Italian Civil Code. In Russia, the Ministry for Economic Development adopted federal valuation standards for intangible assets and intellectual property. These standards will apply to members of Russian self-regulated valuation associations. Countries are also beginning to respond to the demand not just for consistent technical valuation standards but also for standards of competency and recognised credentials for those who provide intangible asset and business valuations. The Institute of Valuers and Appraisers of Singapore is looking to build a professional business valuation certification programme and has released the Business Valuation Body of Knowledge to be used as the foundation for such a programme. Taqeem (the Saudi Authority of Accreded Valuers), also a member organsiation of the International Institute of Business Valuers, is holding a conference in early November when proposed regulations for business valuation will be discussed between representatives from government, banks and regulatory authorities.

The number of these initiatives is likely to grow in the coming months but it does beg the question as to when other European economies,such as the UK and France, are going to begin to introduce consistent regulation around this area of valuation.