Certified in Entity and Intangible Valuations (CEIVTM
) credential holders will be required to comply with the Mandatory Performance Framework, ensuring confidence in the consistency and transparency in their work, all to the benefit of the public interest.
The Mandatory Performance Framework is a practical non-authoritative framework that defines the level of documentation and performance that is necessary to provide supportable and auditable fair value measurements.
By design, the Framework and the Application sections of the Framework do not provide illustrative examples that might otherwise be interpreted as requirements for “how to” perform a valuation. Instead, the purpose of the Framework is to provide valuation professionals with guidance on “how much” documentation is required when performing fair value measurements for financial reporting purposes.
|Contents of the Mandatory Performance Framework
- Section 1: Preamble - provides an overview of the Framework's purpose and scope
- Section 2: Evaluation Engagement Guidance - establishes parameters of the documentation requirements that CEIV credential holders must abide by
- Section 3: Mandatory Performance Framework Glossary - sets forth definitions of terms that may be unique to the Framework
- Section 4: Authoritative and Technical Guidance - includes a list of accounting, audit, and valuation standards and references to certain technical literature applicable to the guidance presented in the Framework
CEIV credential holders are required to comply with the Mandatory Performance Framework. Broader adoption is encouraged.
|Contents of the Application of the Mandatory Performance Framework
- Section A1: General Valuation Guidance - applies the Framework for selected areas of professional valuation practice that are often either misapplied or insufficiently supported, documented, or both in valuations for financial reporting
- Section A2: Business Valuation Guidance
- Section A3: Valuation of Assets and Liabilities Guidance - Sections A2 and A3 identify the most common components of an engagement in which the valuation professional provides a conclusion of value and addresses matters where there is need for greater consistency in the application of valuation approaches and methodology, support for matters that require the application of professional judgment, and documentation of inputs
The Application of the Mandatory Performance Framework will continue to evolve and expand to cover a broader spectrum of subject matter topics and professional practice trends in the valuation profession.