AICPA Comments on the Appraisal Foundation's Valuation of Customer-Related Assets Discussion Draft
The FVS Section serves as the voice of CPAs who provide forensic and valuation services by promoting and protecting member interests with regulators and other third parties. With the assistance of other groups and volunteers, the FVS Team has actively monitored the issues below. Please email us with any questions, concerns or suggestions.
| Issues We're Following
FVS Executive Committee Report Makes Recommendations to Help Improve Efficiencies of the Court System
The AICPA Forensic and Valuation Services 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.
|The hope is that judges, attorneys and financial expert witnesses alike, will consider, implement and experiment with these recommendations. This effort calls on all CPAs who are expert witnesses to help educate attorneys and judges to maximize both the effectiveness of financial experts and efficiency of their use in the civil pretrial process.
On August 31, 2012, the AICPA FVS Executive Committee (FVSEC) issued a comment letter issuing recommendations in response to the Appraisal Foundation’s discussion 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.
United States Department of Labor's Proposed Changes to the Definition of the Term "Fiduciary"
The Department of Labor (DOL) proposed a rule to change the definition of the term "Fiduciary" which was published in the October 22, 2010 Federal Register to include virtually all valuations prepared for benefit plans. Certain aspects of the proposed rule would inappropriately include persons providing appraisal and valuation services (such as to an Employee Stock Ownership Plan (ESOP) under the term “Fiduciary” by redefining the longstanding definition of “Investment Advice.”
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 Department of Labor's proposed rule to change the definition of the term "Fiduciary", visit the Advocacy News Archive page.
Appraisal Standards Board's Proposed Changes to the Communication and Reporting Requirements of USPAP
On July 16, 2012, the AICPA’s FVS Executive Committee submitted additional comments to the Appraisal Foundation in response to the exposure draft of the proposed changes to the 2014-15 edition of USPAP that reiterated its initial position that the proposed changes would have a significant impact on AICPA members who comply with USPAP. Read the FVS Executive's most recent comment letter to learn more.
While AICPA members do not have to comply with USPAP, a significant percentage of our members do comply with USPAP either voluntarily or as a requirement of their membership in some other professional organization. The FVS Executive Committee issued these comments to inform the Appraisal Standards Board of the impact the proposed changes would have on AICPA members who comply with USPAP.
To see past updates concerning the Appraisal Standards Board's proposed changes to the communication and reporting requirements of the USPAP or other issues we continue to follow with a list of recent comment letters, reports and articles, visit the Advocacy News Archive page.