FVS Advocacy 

    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

    AICPA Issues Comments on IVSC's Review Group Report Engagement Paper

    August 2015

    • The AICPA FVS Executive Committee issued a comment letter presenting its responses and concerns to certain questions for respondents raised in the International Valuation Standards Council’s (IVSC) Review Group Report Engagement Paper. This paper was issued in response to conclusions and recommendations developed by the IVSC’s Review Group.

    • The primary recommendation in the comment letter is for the IVSC to engage the AICPA and other standard setters on a more significant level in order to become more effective and credible in the market. The AICPA, a leader in the development of Business Valuation standards in the U.S., has a well-developed and time-proven process of involving its members in the standards development process and a proven track record of working with relevant authorities in its standards-setting processes.

    Fair Value Measurements and the Valuation Profession

    March, 2015

    In 2011, the Chief Accountant of the U.S. Securities Exchange Commission (SEC) expressed concerns about the broadening application of fair value and fair value-based measures in U.S. GAAP and its impact on the reliability and consistency of valuations being conducted for U.S. publicly traded companies. His concerns were related to the following aspects of the valuation profession:

    - Lack of a unified identity of valuation experts
    - Multiplicity of valuation credentials
    - Lack of analytical consistency and valuation work product
    - Lack of consistent qualifications and experience for valuation credentials
    - Lack of consistent enforcement and disciplinary mechanisms for valuation experts




    In 2013, the SEC Chief Accountant noted that valuation professional organizations (VPOs) had started initial discussions on how to address these concerns, but also noted that no substantial changes or progress had been achieved to date.

    In 2014, the American Institute of Certified Public Accountants (AICPA), American Society of Appraisers (ASA), Royal Institution of Chartered Surveyors (RICS) and The Appraisal Foundation (TAF), along with global valuation leaders from several large accounting firms and the International Valuation Standards Council (IVSC) began formal discussions regarding proposed solutions to the expressed concerns of the SEC Chief Accountant. Several meetings have been held and significant progress has been made.

    During these initial meetings, the participating VPOs agreed to lead the creation of a new shared level of professionalism focused on a mandatory performance framework, education and quality assurance. Current discussions include the concept of a valuation credential issued by VPOs with agreed upon qualifications and requirements. Going forward, the group intends to focus on fair value measurements related to business valuation and intangible assets as performed for public company financial statements.

    Representatives of these VPOs intend to meet with the SEC later this month to discuss potential solutions and obtain feedback regarding efforts currently underway. After this meeting, the participating organizations plan to continue to meet in order to further develop this initiative. A specific plan will be submitted to interested stakeholders for public comment later this calendar year.



    AICPA President and CEO Barry MelanconERISA Fiduciary Definition - Appraisers of Employee Stock Ownership Plans 

    Department of Labor Reportedly Drops Valuation from Fiduciary Rule

    January, 2015

    The AICPA has learned that the Department of Labor has dropped appraisers of employee stock ownership plans (ESOPs) from its proposed rule on the definition of a fiduciary. The original rule was issued in 2010 and would have included valuation providers in the definition of a fiduciary under the Employee Retirement Income Security Act (ERISA). The AICPA received a number of communications from members expressing concern with the proposal, and took those concerns to the DOL. The DOL withdrew the proposed rule in 2011 and is expected to reissue the new rule soon.


    In March of 2011, Robert Reilly, CPA/ABV/CFF, and members of the AICPA’s Forensic and Valuation Services Executive Committee, testified on this issue before the DOL. In addition to the testimony, the AICPA submitted several comment letters and met directly with Department staff. AICPA’s concerns included that the proposed rule:

    • Would create a conflict between a fiduciary’s strict duty of loyalty to plan participants and beneficiaries and professional appraisal standards, which require an appraiser to perform assignments with impartiality, objectivity and independence,
    • Did not address the underlying issue of proper qualifications and standards for performing valuation services,
    • Would increase the cost of valuation services for ESOP plans, and
    • Would restrict the number of valuation specialists willing to do valuations for ESOP plans.

    The AICPA believed that a better solution would be to mirror rules developed by the IRS where individuals performing valuations for qualified plans would be required to have credentials and follow valuation standards.

    In addition to the AICPA’s direct interactions with the DOL, the AICPA membership and state CPA societies participated in grass roots efforts in support of bipartisan Senate and House bills, S.273 and H.R. 2041, which specifically excluded valuation providers from the definition of fiduciary.

    The AICPA believes the removal of valuation providers from the proposed rule is a positive outcome. Importantly, the DOL has expressed interest in working with the appraiser community to improve guidance for ESOP appraisers and AICPA looks forward to working with the Department to craft a solution that protects plan participants while not imposing an undue burden on plans or valuation providers.

    To see past updates concerning the DOL's proposed rule to change the definition of the term "Fiduciary", visit the Advocacy - Federal Issues page. 


    mailing a letterComments 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.

                     A woman writing a AICPA comment on the Appraisal Foundation's Valuation of Customer-Related Assets Discussion Draft

    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.

    The FVS Executive Committee report makes recommendations to help improve efficidencies of th court system
    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.
    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.


    To see past updates concerning issues we continue to follow with a list of recent comment letters, reports and articles, visit the Advocacy News Archive page.

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