Fair Value Quality Initiative

In response to regulatory concerns, the American Institute of Certified Public Accountants (AICPA),  American Society of Appraisers (ASA), and Royal Institution of Chartered Surveyors (RICS) and others have worked together to focus on issues facing the valuation profession and how to address them. 


The results of this collaboration include the development and implementation of a credential designed to enhance consistency and transparency in the fair value measurement process to be issued to third party valuation specialists who perform fair value measurements for entities and intangible assets for U.S. public company financial reporting purposes. Key components of this new credentialing program will include ongoing quality oversight and compliance with a Mandatory Performance Framework that will help define ‘how much’ work is necessary to provide supportable and auditable fair value measurements. 

The desired results of the fair value quality initiative are the positive impact it should have on the audit process and increased confidence in the work performed by these credentialed specialists who conduct fair value measurements for entities and intangible assets for U.S. public company financial reporting purposes. More details on this initiative can be found in the  Assessment of the Current Professional Infrastructure Governing Fair Value Quality Progress Report. 


Stay tuned for more information on the launch of this credential.

 

Mandatory Performance Framework Exposure Draft

The AICPA, ASA and RICS sought out comments on the scopes of the Mandatory Performance Framework and the related Application of the Mandatory Performance Framework  and whether their contents provide the appropriate set of parameters to help improve the documentation and auditability of fair value measurements.  Respondents were asked to respond, in particular, to the following questions:

  1. Are the objectives of the documentation guidance clearly stated?
  2. Are there any topics or subtopics that should be included that are not currently in the document? 
  3. Would illustrative examples be helpful in providing instructive guidance for the application of the Mandatory Performance Framework?

The comment period for the Mandatory Performance Framework closed on August 24, 2016.