AICPA Brings Consistency, Clarity and Transparency to Valuation of Financial Instruments with Launch of new Credential and Performance Framework

April 1, 2019

  • Certified in the Valuation of Financial Instruments (CVFI) is an advisory services credential available for CPAs and valuation professionals
  • Credential holders will help bring consistency and transparency to $594 trillion global derivatives market
  • Pathway to the CVFI consists of Education, Exam and Experience

NEW YORK (April 1, 2019) – The American Institute of CPAs (AICPA) today announced the launch of a new credential and accompanying performance framework that will enhance the consistency, clarity and transparency of the valuation of financial instruments. The pathway to the new Certified in the Valuation of Financial Instruments (CVFI) credential consists of rigorous education and experience requirements and passing an exam.

Historically, financial instruments, such as mortgage-backed securities, credit default swaps, complex bonds, and other derivatives have been difficult to value. And with data showing that there were more than $594 trillion in over-the-counter derivatives in 2018, the need for a standardized process for reporting on valuations of financial instruments has never been greater.

“Complex financial instruments have become more prevalent on balance sheets. The marketplace has a clear need for a more consistent and transparent valuation approach,” said Susan S. Coffey, CPA, CGMA, Association of International Certified Professional Accountants’ Executive Vice President for Public Practice. “The CVFI credential and accompanying performance framework creates a consistent and transparent process for professionals who perform fair value measurements on financial instruments. This increased clarity will help build investor and regulatory confidence as financial instruments continue to appear on company financial statements.”

To help standardize the reporting on valuations of these derivatives, the CVFI is built upon the guidance provided in the Financial Instruments Performance Framework. The Framework defines the scope of work and extent of documentation necessary for a professional working with securities and financial instruments to effectively demonstrate the valuation performed. The guidance relies upon four major principles: independence, objectivity, integrity and consistency. CVFI credential holders are required to comply with the Framework, ensuring confidence in the consistency and transparency of their work. Valuations that are conducted in adherence to the performance framework serve the interest of the financial markets and ultimately benefit the public at large.

To obtain the CVFI Credential, qualified candidates must meet rigorous requirements determined by the AICPA. These include education covering the CVFI Body of Knowledge, an exam based on the Financial Instruments Performance Framework and the Body of Knowledge, and more than 3,000 hours of experience related to fair value estimates for financial instruments in the 5 years preceding the application.

The CVFI is available to CPAs and other qualified valuation and finance professionals. Those interested in earning the credential can find more information at aicpa.org/cvfi