Comments Issued on International Valuation Standards Council’s Illustrative Examples Chapter 1 – Bases of Value Exposure Draft
On March 31, 2014, the AICPA FVS Executive Committee issued a comment letter presenting its responses and concerns to certain questions for respondents raised in the first chapter of a rolling project to provide illustrative examples for many of the valuation concepts and principles discussed in the International Valuation Standards (IVS) Framework: Chapter 1 – Bases of Value. The primary concern with the exposure draft is the inconsistent terminology between the IVS Framework and existing terminology used in International Financial Reporting Standards, US GAAP, and the International Glossary of Business Valuation Terms. Download the comment letter to read the AICPA's responses and additional concerns.
AICPA Comments on Second Exposure Draft of The Appraisal Foundation's Valuation of Customer-Related Assets
On February 28, 2014, the AICPA FVS Executive Committee issued a comment letter issuing recommendations in response to The Appraisal Foundation’s second exposure draft of Valuation of Customer-Related Assets (VCRA). The discussion draft concludes that the valuation of customer-related assets is a complicated exercise that requires significant judgment. VCRA presents concepts on how to approach and apply the valuation process appropriate for customer-related assets. AICPA submitted comments on the initial discussion draft on August 31, 2012.
ERISA Fiduciary Definition - Appraisers of Employee Stock Ownership Plans
The AICPA believes that CPAs who perform valuation services for employee stock ownership plans (ESOPs) should not be defined as fiduciaries under the Employee Retirement Income Security Act (ERISA). Rather, the AICPA believes that the U.S. Department of Labor (DOL) should implement rules that would require appraisers of ESOPs to meet minimum qualification requirements, including holding relevant credentials and training, and comply with applicable professional valuation standards.
On August 9, 2012, Barry Melancon, AICPA President and CEO, submitted a letter in support of S. 1232, a bill that exempts valuation analysts from the definition of fiduciary under ERISA. If either you or your Senator have any questions regarding this issue, please contact Diana Deem, Director of Congressional and Political Affairs, at the AICPA (202-434-9276 or by email).
To see past updates concerning the DOL's proposed rule to change the definition of the term "Fiduciary", visit theAdvocacy - Federal Issues page.
FVS Executive Committee Report Makes Recommendations to Help Improve Efficiencies of the Court System
The AICPA FVS Executive Committee has collaborated with the Institute for the Advancement of the American Legal System (IAALS) at the University of Denver in their efforts to improve the United States civil justice system’s ability to provide parties before the court with a speedy, inexpensive and just determination of every action, which is set forth in Rule One of the Federal Rules of Civil Procedure. The FVS Executive Committee and IAALS have written a report titled Another Voice: Financial Expert on Reducing Client Costs in Litigation. This document details the following five recommendations to maximize both the effectiveness and efficiency of financial expert witnesses’ use in the civil pretrial process.
- Judges should implement early and consistent active case management;
- Clients and attorneys should involve experts early in the process;
- Attorneys should target, focus and streamline expert depositions and discovery;
- Attorneys’ Daubert-like challenges should be appropriately targeted and acted upon promptly by the court; and
- Attorneys and the court should develop a process for the collaboration and cooperation of opposing experts where appropriate.