Valuation Services

There are three pronouncements related to Valuation Services.

APES 225 Valuation Services (APES 225)

APES 225 applies to all members who provide an estimate of value for a business, business ownership interest, security, intangible asset, or other asset or liability to either a client or an employer.

The primary professional obligations imposed by this standard cover the valuation reporting and documentation requirements for members who conduct valuation services for a client or an employer.

APES 225 defines valuation services to include valuation engagements, limited scope valuation engagements and calculation engagements. As at times there is professional judgement exercised in determining whether a particular service is a valuation service, appendix 1 to APES 225 includes common scenarios which demonstrate the application of the principles in the standard to assist the member determine whether the member is providing a valuation service.

APES GN 20 Scope and Extent of Work for Valuation Services (APES GN 20)

APES GN 20 provides guidance to assist members in determining the scope and extent of work that is appropriate for the three types of valuation services defined in APES 225.

APES GN 20 notes the need for members to exercise professional judgement in determining the extent of work and evidence relating to each type of valuation service. The appendix in the guidance note sets out illustrative examples to guide members when determining the scope and extent of work in a valuation service.

APES GN 21 Valuation Services for Financial Reporting (APES GN 21)

APES GN 21 provides guidance to members on their professional and ethical obligations when providing a valuation service in accordance with APES 225 for financial reporting purposes. In particular, it notes the importance of determining the scope of work when performing a valuation service for financial reporting purposes.

The guidance note also outlines key matters for members to consider in relation to disclosures in valuation reports in respect of business combinations, impairment of goodwill and intangible assets, share-based payments, financial instruments and assets held in superannuation entities.