The Certified in the Valuation of Financial Instruments (“CVFI”) credential was designed to enhance consistency and transparency of fair value estimates for financial instruments such as mortgage-backed securities, credit default swaps, complex bonds and other derivatives. Key components of this new credentialing program will include compliance with the Financial Instruments Performance Framework that will help define ‘how much’ work is necessary to provide supportable and auditable fair value measurements which will be reviewed through an ongoing Quality Monitoring process.
Valuation professionals who perform fair value measurements of financial instruments such as mortgage-backed securities, credit default swaps, complex bonds and other derivatives for financial reporting purposes, whether already credentialed or not, are able to obtain the CVFI credential as long as they possess the requisite education, experience and pass the CVFI credential exam. Please visit the CVFI credential overview for more information.
The Financial Instruments Performance Framework is a practical non-authoritative framework that establishes documentation requirements and defines ‘how much’ work is necessary to provide supportable and auditable fair value estimates for financial instruments. The Framework is designed to enhance consistency and transparency in the performance of fair value measurements, to the benefit of the public interest. CVFI credential holders are required to comply with the Financial Instruments Performance Framework.
To apply for the CVFI credential you must have a minimum of 3,000 hours of experience related to fair value estimates for financial instruments in the five years preceding the application for the CVFI credential. Experience must be attested to by a supervisor (or past supervisor, if you changed employers). If a partner/supervisor is not available, peer attestation is acceptable.
For the purpose of the CVFI credential, experience related to fair value estimates for financial instruments may include performing, supervising, or managing valuation engagements or assignments as a valuation professional; review of valuations prepared by the firm’s valuation team; reviews of valuations prepared by a third party, by management, by auditors, and/or auditor firm’s valuation team; signing valuation reports; and consulting on, instructing, researching, developing thought leadership, and staff development on valuation matters related to financial instruments.
The CVFI credential was designed to provide guidance for valuation professionals as they estimate the fair value of financial instruments for financial reporting purposes. This includes estimating the fair value of derivatives, structured products, securitized debt and more. Financial statements issued for financial reporting purposes include, but are not limited to, financial reports issued by the following:
- Entities required to submit registration statements or filings in compliance with reporting standards set by the U.S. SEC, UK Financial Reporting Council, or similar authorities
- Privately held entities that prepare and issue financial statements in accordance with United States generally accepted accounting principles (U.S. GAAP) or the International Financial Reporting Standards (IFRS)
- Any other engagement in which the individual is performing services as a valuation professional
Important: If a CVFI credential holder is engaged by a privately held entity that does not issue financial statements or other reports in accordance with U.S. GAAP, IFRS, or other standards (for example, financial statements issued for regulatory reporting) and the engagement falls within the subject matter scope of the FIPF, the CVFI credential holder should follow the FIPF for the engagement or assignment. If, however, the CVFI credential holder elects not to follow the FIPF for this type of engagement or assignment, the CVFI credential holder must prominently display this fact and rationale in the final valuation report.
No. All CVFI credential candidates, regardless of years of experience, are required to take education on the CVFI body of knowledge as well as successfully pass the CVFI credential exam.
To apply for the CVFI credential, you must have a bachelor’s degree, or equivalent, and take the CVFI education modules that cover the body of knowledge for the credential. These modules are available in a self-paced virtual format and include an end-of-course exam that is required in order to obtain credit for completing the course. The end of course exam reinforces the learning and is a good tool to prepare for the CVFI Exam.
The 8 modules required to obtain the CVFI credential are
Module 1 – AICPA Code of Professional Conduct*
Module 2 – AICPA Professional Standards Relevant to Fair Value Measurement*
Module 3 – Accounting Standards Related to Financial Statements and Fair Value
Module 4 – Current Expected Credit Losses (CECL)
Module 5 – Financial Reporting Standards, Market Organization, & Economics of Regulation
Module 6 – Audit Considerations
Module 7 – Valuation and Risk
Module 8 – Financial Instruments Performance Framework
*Modules 1 and 2 are not required for CPAs
Yes. CVFI credential candidates must successfully pass the CVFI credential exam. The CVFI credential exam is a conceptual multiple-choice exam based on the Financial Instruments Performance Framework and on the contents of the CVFI education modules that can be purchased in the AICPA Store. To pass the CVFI credential exam, review the material covered by education modules 3-8 and read the Financial Instruments Performance Framework.
The CVFI credential exam is a timed, computer-based non-disclosed exam that can be taken remotely. The questions and answers are not published nor are you permitted to share any of the information included on the exam. The CVFI credential exam grading process is immediate. You will receive either a “Pass” or “Fail” notification upon electronic submission of the exam.
All CVFI credential holders must meet the following requirements to maintain the CVFI credential:
- Maintain membership in good standing with the AICPA.
- 1,500 hours of experience related to fair value estimates for financial instruments every five-year period.
- Complete 8-hours of training on topics related to financial instruments annually.
- Comply with the Financial Instrument Performance Framework.
- Participate in ongoing Quality Monitoring process.
CVFI credential holders will be required to periodically file information about their process and procedures related to their organization and its financial instruments valuation practice through the completion of an annual compliance questionnaire.