International business valuation standards. International Valuation Standards

Legal basis regulation appraisal activities. Law on appraisal activity.

Valuation activities are carried out in accordance with the international treaties of the Russian Federation, this Federal Law, as well as other federal laws and other regulatory legal acts of the Russian Federation, regulating relations arising in the course of appraisal activities. This Federal Law defines the legal basis for the regulation of valuation activities in relation to objects of valuation owned by the Russian Federation, constituent entities of the Russian Federation or municipalities, individuals and legal entities, for the purpose of making transactions with the objects of assessment, as well as for other purposes. For the purposes of this Federal Law, appraisal activity means professional activity subjects of appraisal activity, aimed at establishing market or other value in relation to the objects of appraisal. For the purposes of this Federal Law, the market value of an appraisal object means the most probable price at which this appraisal object can be alienated on the open market under competitive conditions, when the parties to the transaction act reasonably, having all the necessary information, and the value of the transaction price does not affect any or extraordinary circumstances, that is, when: one of the parties to the transaction is not obliged to alienate the object of assessment, and the other party is not obliged to accept the performance; the parties to the transaction are well aware of the subject of the transaction and act in their own interests; the valuation object is presented on the open market through a public offer typical for similar valuation objects; the price of the transaction is a reasonable remuneration for the object of assessment and there was no coercion to complete the transaction in relation to the parties to the transaction from either side; payment for the object of assessment is expressed in monetary terms. The subjects of valuation activity are recognized individuals who are members of one of the self-regulatory organizations of appraisers and have insured their liability in accordance with the requirements of this Federal Law (hereinafter referred to as appraisers).

An appraiser may carry out appraisal activities independently, engaging in private practice, as well as on the basis of an employment contract between an appraiser and a legal entity that meets the conditions established by Article 151 of this Federal Law. The objects of evaluation include: separate material objects (things); a set of things constituting the property of a person, including property of a certain type (movable or immovable, including enterprises); the right of ownership and other real rights to property or certain things from the composition of property; rights of claim, obligations (debts); works, services, information; other objects of civil rights in respect of which the legislation of the Russian Federation establishes the possibility of their participation in civil circulation.

Land legislation and land relations in Russia.

1. Land legislation, in accordance with the Constitution of the Russian Federation, is under the joint jurisdiction of the Russian Federation and the constituent entities of the Russian Federation. Land legislation consists of this Code, federal laws and the laws of the subjects of the Russian Federation adopted in accordance with them. *2.1.1)

The norms of land law contained in other federal laws, laws of the constituent entities of the Russian Federation must comply with this Code.

Land relations may also be regulated by decrees of the President of the Russian Federation, which must not contradict this Code or federal laws.

2. The Government of the Russian Federation shall make decisions regulating land relations within the scope of authority determined by this Code, federal laws, as well as decrees of the President of the Russian Federation regulating land relations.

3. Based on and in pursuance of this Code, federal laws, other regulatory legal acts of the Russian Federation, laws of the constituent entities of the Russian Federation, executive authorities of the constituent entities of the Russian Federation, within their powers, may issue acts containing norms of land law.

4. Based on and in pursuance of this Code, federal laws, other regulatory legal acts of the Russian Federation, laws and other regulatory legal acts of the constituent entities of the Russian Federation, local governments, within their powers, may issue acts containing norms of land law.

Relations regulated by land legislation

1. Land legislation governs relations for the use and protection of land in the Russian Federation as the basis for the life and activities of the peoples living in the respective territory (land relations).

2. Relations on the use and protection of subsoil, waters, forests, wildlife and other natural resources, environmental protection, protection of specially protected natural territories and objects, protection of atmospheric air and protection of objects of cultural heritage of the peoples of the Russian Federation are subject to the legislation on subsoil, forestry, water legislation, legislation on the animal world, on the protection and use of other natural resources, on environmental protection, on the protection of atmospheric air, on specially protected natural areas and objects, on the protection of objects of cultural heritage of the peoples of the Russian Federation, special federal laws.

The norms of these branches of legislation apply to land relations if these relations are not regulated by land legislation.

3. Property relations for the possession, use and disposal of land plots, as well as for transactions with them, are regulated by civil legislation, unless otherwise provided by land, forestry, water legislation, subsoil legislation, environmental protection, special federal laws.

The concept of movable and immovable property.

Real estate includes:

Land;

Subsoil plots;

Separate water bodies;

Everything that is firmly connected with the earth, i.e. objects, moving

which without disproportionate damage to their purpose is impossible, including

including forests, perennial plantations, buildings, structures.

Immovable things also include those subject to state

registration aircraft and sea vessels, vessels of the inland

navigation, space objects. The law to immovable things can

be attributed to other property.

In accordance with Art. 132 of the Civil Code of the Russian Federation, real estate is recognized

also an enterprise as a property complex.

Movable thing (movable property) - any thing (including money and securities) that is not classified by law as real estate

International and Russian valuation standards

International Valuation Standards are developed by the International Valuation Standards Committee (IVSC), an international organization that brings together professional organizations of appraisers from more than 50 countries around the world. RF represents ROO.

In the USA, Europe, there are no norms and standards for valuation as an unshakable body of law. One of the main objectives of the IVSC is to achieve consistency between national valuation standards and those that are best suited to the needs of the international community.

US Valuation Standards.

The Uniform Standards of Professional Valuation Practice (ESPP) are mandatory for use in the USA and other countries (Mexico, Canada) and are developed and approved by the Valuation Standards Council of the Valuation Foundation. It is a non-profit educational organization founded in 1987 by US professional organizations: Institute for Evaluation, American OO, National Association Masters in Evaluation).

ESPOP are intended for appraisers and users of appraisal services. In addition, all real estate valuations related to federal transactions must be conducted based on and in accordance with the ESPP.

The ESPOP includes:

The conditions to be followed when carrying out an assessment, checking an assessment report or providing advisory services,

The manner in which the assessment, audit or consulting services are carried out.

There are 10 standards in total (for example, 1 and 2 - regulate the process of valuation and drawing up a report on real estate valuation, 3 - establish standards for checking reports on valuation and drawing up a report based on these standards ...).

The standards include the Regulations on Valuation Standards (regulations, definitions, rules), explanatory comments.

Important role play in the activities of the appraiser ethical obligations. The standards include, but are not limited to, Regulations on Ethics, Regulations on Competence, Regulations on Deviations.

The ESPP also includes Standards Documents, which are also mandatory, as well as a glossary of all valuation terms.

European Valuation Standards

The non-profit Association of National Appraisers of Western European Countries was established in 1977 and was called the European Group of Asset Appraisers (TEGOVOFA). Later there was a merger with the English-speaking organization EUROVAL. The group is now called the European Group of Appraisers Association (TEGoVA).

TEGoVA's current members are professional valuation organizations from the European Union with an active and growing participation of partners from Central and Eastern European countries, including Russia (ROO), the Czech Republic, Hungary, Poland, Bulgaria, Romania and Albania.

A feature of the European Valuation Standards (ECO) is the focus on valuations performed for the purposes of compiling financial financial statements in accordance with the accepted European legislation. Standards set minimum allowable level the quality of the assessment, due to the status and qualifications of the appraiser, the content of the contract for the performance of the assessment and assessment reports, the methodological approaches to assessment used in specific situations.

The European Valuation Standards were adopted in 2000 (The Blue Book). This document includes 9 standards and 13 guidelines. The standards also consider their compliance with the IVS.

N-r: Standard 4 deals with the basic principles of valuation and the main approaches to the preparation of the valuation report,

Standard 5 deals with issues related to valuation for financial reporting, Standard 6 deals with the problems of valuing real estate as collateral, as well as other collateral in mortgage lending. Basic terms and definitions are given.

Appendices are given to the ESS, where issues related to the certification of appraisers, reviewing appraisal reports, and ethics of the appraiser are considered.

Russian Valuation Standards

The legal basis for standardization is established by the Federal Law "On Standardization".

Valuation standards that are mandatory for use by valuation entities were approved by Decree of the Government of the Russian Federation on July 6, 2001 No. 519.

The requirements of the standards are obligatory for the use by the subjects of valuation activities when determining the type of value of the object of valuation, approaches and methods of valuation, as well as during the valuation.

The valuation standard defines the main types of value of the valuation object, approaches and methods of valuation. The definition of the types of value other than the market value is also given: the value of the appraised object with a limited market for goods, the cost of replacing the appraised objects, the cost of reproducing the appraised objects, the value of the appraised object in the current use, the investment value of the appraised object, the value of the appraised object for tax purposes, the salvage value of the object appraisal, utilization value of the appraised object, special value of the appraised object.

5. certification and attestation of professional activity appraiser, basic requirements

As part of the self-regulation of valuation activities in professional organizations of appraisers, there are qualification requirements to its members and the corresponding system of professional titles. For example: member of the Royal Institute of Chartered Surveyors of Great Britain, the title of a member of the US Institute of Appraisal, the title of an accredited certified appraiser of the American Society of Appraisers.

The professional knowledge system is based on:

1. own system of vocational training,

2. either the education system according to agreed programs in accredited educational institutions,

3. on the practical experience of the appraiser, confirmed by practical reports.

At present, a system of certification of the quality of assessment services is being formed in European countries.

Within the framework of the ROO, a system for attestation of appraisers and certification of appraisal firms based on the legislation of the Russian Federation is being developed. At present, the system of regulatory documents of the ROO has the “Regulations on the qualification levels of full members of the ROO and the attestation (certification) commission of the ROO (AC)”. Approved by the decision of the ROO conference on November 26, 1996 (publication "Russian Appraiser", No. 1-2, 1997).

The regulation establishes four levels of qualification of members of the ROO:

Full member of the ROO (assigned to almost all appraisers with professional education (at least 100 hours);

Certified Appraiser,

Evaluator,

Master (master) assessment.

The regulation establishes the basic conditions under which it is possible to assign each of the listed qualification levels, the procedure for the work of the attestation commission of the ROO, the main requirements for assessment reports are given. This document has been developed taking into account the provisions of the Federal Law "On ML".

In the period from 1994 to 1999, 99 people received the title of "certified appraiser" (274 applications were submitted in total). This is only 30% of the number of applicants. The qualification levels of "assessment expert" and "assessment master (master)" were not assigned to anyone.

Thus, to qualification level appraisers are subject to high requirements.

In addition, there are requirements for advanced training in the field of valuation activities (approved by the Ministry of Property of the Russian Federation on May 22, 2003 No. 3R-4/10060).

Advanced training of specialists is carried out as necessary, but at least once every 3 years, starting from the date of issuance of a diploma confirming qualifications in the field of valuation. Advanced training should be carried out according to the program of one educational institution. The total amount of training must be at least 100 hours (within 1 year from the start of training).

Advanced training is carried out by educational institutions that have passed the coordination of professional programs of higher vocational education, additional professional education or professional retraining programs for employees in the field of appraisal activities at the Ministry of Property of the Russian Federation.

The advanced training program includes:

Compulsory disciplines - the volume is not less than 732 hours,

Elective disciplines in the amount of at least 32 hours.

Educational institutions form independently on the basis of an approximate curriculum professional development programs. Elective disciplines are determined by the institution independently. The passage of training within one discipline of choice must be carried out for at least 8 hours.

Mastering the mandatory sections academic disciplines and disciplines of choice ends with a final comprehensive exam.

Trained students and passed qualifying exam a certificate of advanced training of the state standard is issued, which is a document confirming the advanced training in the field of valuation activities for the purposes of licensing.

This International Standard should be read in the context of the General Provisions and Application Notes contained in the introductory chapter on valuation concepts and principles.

1.0. Introduction

1.1. The purpose of this International Standard is to provide a generally accepted definition market value. This standard also clarifies the general criteria associated with this definition and its application in property valuation where the purpose and function of the valuation is to calculate market value.

1.2. Market value represents the value in exchange or the amount of money that a property offered for sale on the (open) market at the valuation date would have yielded under conditions that meet the requirements contained in the definition market value. To evaluate market value, The appraiser must first determine most efficient use, or the most likely use (see chapter "Concepts underpinning generally accepted valuation principles", paragraphs 6.3-6.5). Such use may be an extension of an existing use or some alternative use. This question is decided on the basis of market data.

1.3. Market value valued by applying valuation methods and procedures that reflect the nature of the property and the circumstances in which the property is most likely to be sold on the market. To the most common methods of establishing market value relate sales comparison approach, income capitalization approach, including discounted cash flow analysis, And cost approach.

1.4. All methods, techniques (methods) and measurement procedures market value, if they are applicable and used appropriately and correctly, lead to common expression market value when they are based on criteria that have a market origin. Sales comparisons or other market comparisons should be based on market research. The income capitalization approach, including discounted cash flow analysis, should be based on market-driven cash flows and market-driven rates of return. Construction costs and the amount of depreciation should be determined based on an analysis of cost calculations and accumulated depreciation from market data. While the availability of information and the situation on the market and around the property itself will determine which method of valuation is most appropriate and appropriate, the use of any of the above procedures should result in a market value if each method is based on market data.

1.5. The applicability of certain methods and procedures for establishing market value is determined based on the way in which property is usually sold on the market. Being based on market information, each method is a comparative method. In each case, assessments of one or more methods give the most complete picture of the activity of the (open) market. In each market value assignment, the appraiser must consider all methods and determine the most suitable of them.

2.0. Scope of application

2.1. IVS 1 applies to market value property (usually real estate and related items). It requires that the property being valued be treated as if it were for sale on the market, as opposed to being valued for some other purpose.

3.0. Definitions

3.1. Market value for the purposes of these standards is defined as follows:

Market value is the estimated amount of money for which an exchange of property took place on the date of valuation between a willing buyer and a willing seller as a result of business deal after proper marketing, in which each party would act knowingly, prudently and without coercion.

3.2. The term "property" is used due to the fact that the focus of these standards is the valuation of property. Because these Standards cover financial reporting, this definition can be replaced by the term “asset” in order to use this definition generally. Each element of this definition has its own conceptual framework:

3.2.1."Estimated amount of money..." refers to the price, denominated in money (usually local currency), that may be paid for a property in a commercial market transaction. measure market value is the most probable price that, on reasonable grounds, can be obtained at the valuation date in the market, subject to the conditions contained in the definition market value. This price is the best reasonably achievable for the seller and the most advantageous reasonably achievable for the buyer. In determining this price, in particular, prices are not taken into account that are too high or too low due to special conditions or circumstances of the transaction, such as an atypical form of financing, a sale to get the property back on lease, special compensation or concessions provided by any of the parties involved in this transaction, or any element special value(defined in clause 3.5 of IVS 2).

3.2.2."... for which the exchange of property would take place ..." indicates that the value of an asset is an estimated value and not a predetermined or actual selling price. This is the price at which the market expects a trade to take place on the valuation date, subject to all other conditions included in the definition. market value.

3.2.3."...As of the valuation date..." expresses the requirement that the estimated value market value related to a specific date. Due to the fact that markets and market conditions may change, at other times the estimated value may be erroneous or inconsistent with reality. The result of the valuation reflects the current state and conditions of the market at the actual valuation date, and not at a past or future date. This definition also assumes that the asset changes hands and the transaction occurs at the same time, without any price variation that would otherwise be possible.

3.2.4."...Between interested buyer..."- refers to someone who has motives to buy, but nothing forces him to do so. Such a buyer is not eager to buy and is not inclined to pay any price. In addition, he makes a purchase, acting in accordance with the realities and expectations of the current market, and not an imaginary or hypothetical market, the existence of which can neither be demonstrated nor foreseen. The prospective buyer will not pay more than what the market demands. The current owner of the property is also among those who make up this “market”. The appraiser should not make unrealistic assumptions about market conditions or assume that the level of market value may be higher than reasonably achievable.

3.2.5."...And an interested seller..."- means a seller who is not eager to sell, is not forced to sell and is not ready to sell at any price or insist on a price that is not considered reasonable in the market and this moment. The interested seller's motive is to sell the property on market terms at the highest possible price on the (open) market after proper marketing, whatever that price may be. The actual position of the real owner of the property is not taken into account, since the "interested seller" is a hypothetical owner.

3.2.6."...As a result of a commercial transaction..." means that there is no special or special relationship between the parties (for example, a relationship between a parent and a subsidiary, or between a landlord and a tenant) that could make the price level uncharacteristic of the market or inflated due to the presence of an element special value(which is defined in 3.5 of IVS 2). It is assumed that the deal market value must be made between parties not related by any relationship, and each of the parties acts independently.

3.2.7."...After conducting proper marketing..." means that the property must be placed on the market in the most appropriate manner to ensure that it is sold at the best price reasonably achievable, in accordance with the definition market value. The duration of the listing may vary depending on market conditions, but in any case, it should be sufficient for the asset to attract the attention of a sufficient number of potential buyers. The billing period precedes the valuation date.

3.2.8."... In which each of the parties would act, being well-informed, prudently ..." means an assumption that both the interested buyer and the interested seller are sufficiently informed about the nature and properties of the property being sold, its actual and potential use, and the state of the market at the date of the valuation. It is further assumed that each of them, having this information, acts in his own interests, prudently, striving to achieve the best price, from the point of view of his position in the transaction. This refers to prudence in relation to the state of the market at the date of the valuation, and not in relation to retrospective judgments expressed at a later date. It is not necessarily considered imprudent for a seller to sell property in a falling market at a price below previous market price levels. In this case, as in other situations of buying and selling in conditions of changing prices, a prudent buyer or seller acts in accordance with the most complete information about the state of the market, available at the moment.

3.2.9."... And without coercion... means that each of the parties has motives for making a deal, but neither party is forced to make a deal.

3.3. market value should be understood as the value of the asset, calculated without regard to the cost of buying or selling it and without taking into account any taxes associated with the transaction.

3.4. Best Use (NEI). The most likely use of the property that is physically possible, appropriately justified, legally permissible, financially feasible, and which results in the highest value of the property being valued.

4.0. Relationship with Financial Reporting Standards

4.1. Measurement for financial reporting purposes, which is the subject of International Measurement Application 1 (ISA 1), should be read in conjunction with this Standard.

4.1.1 IGO 1, Valuation for Financial Reporting Purposes, provides essential guidance to valuers, accountants and the general public on valuation standards that affect financial reporting. Term fair value non-current assets are usually understood as their market value(See the chapter “Concepts underlying the generally accepted principles of valuation”, paragraph 8.1).

4.2. There are many examples where both appraisers and accountants use the same terms. In some cases, this leads to misunderstandings and the possibility of erroneous application of standards. MSO 1 defines market value and considers the criteria for establishing market value. Other important terms are defined in IVS 1 and IVS 2 and refer to the more specific requirements covered in IVS 1, Valuation for Financial Reporting Purposes.

5.0. Standard requirements

To conduct an assessment that complies with these standards and the Generally Accepted Valuation Principles (GAVP), assessors must adhere to all sections of the code of conduct relating to ethics, competence, disclosure and reporting (sections 4.0-7.0).

5.1. When conducting an appraisal and preparing a report on determining the market value, the appraiser must:

5.1.1. give a full and understandable explanation of the assessment being carried out in such a way as to exclude the possibility of erroneous interpretation;

5.1.2 ensure that the definition market value based on data extracted from the market;

5.1.3 ensure that the definition market value based on acceptable methods and procedures;

5.1.4 provide sufficient information to enable those who read and rely on the report to fully understand its data, rationale, analysis and conclusions;

5.1.5. When compiling the report, comply with the requirements of IVS 3. Accordingly, the appraiser must:

5.1.5.1 define the estimated value, indicate the purpose of the valuation and the intended use of the valuation, indicate the actual date of the valuation and the date of the report;

5.1.5.2 clearly identify and describe the property being valued, as well as the rights and interests being valued;

5.1.5.3 describe the scope and depth of the work done and the extent to which the property has been surveyed;

5.1.5.4 state all assumptions and limiting conditions on which the estimate is based;

5.1.5.5 fully and comprehensively explain the applied valuation bases and valuation approaches, as well as provide justifications for their application and corresponding conclusions;

5.1.5.6. include in the report a statement of conformity signed by the appraiser (certificate of value), confirming objectivity, impartiality, independence from the amount of payment or other remuneration, professional contribution, applicability of standards and other disclosed information.

6.0. Remarks

6.1. Concept and definition market value are of paramount importance for all valuation activities. In the chapters "Concepts underpinning generally accepted principles of valuation" and "Code of conduct", i.e. the documents on which these standards are based briefly explain the economic and methodological basis of these fundamental concepts and principles.

6.2. concept market value is independent of any actual transaction taking place at the measurement date. Market value - rather, it is the estimated price that would be charged on sale at the valuation date if the conditions contained in the definition were met. market value. Market value is a representation of the price that the buyer and seller would agree to at that moment if the conditions of the definition were met market value, if each of them had enough time to explore other opportunities and alternatives on the market, although it may take some time to prepare formal contracts and related documentation for a transaction to close.

6.3. concept market value assumes that the price is determined by negotiations on an open and competitive market. This circumstance sometimes serves as the basis for replacing the term "market value" with the term "value on the open market". The words "open" and "competitive" do not have an absolute meaning. For a single property, the market may be international or local. The market may consist of numerous buyers and sellers or be characterized by a limited number of participants. The market in which property is offered for sale is, by definition, not restricted or restricted. In other words, the absence of the word "open" does not mean that the transaction is private or closed.

6.4. Market valuations are usually based on information relating to comparable properties. The appraisal process requires the appraiser to conduct the necessary and adequate research, competent analysis, and make judgments supported by information and evidence. In this process, valuers do not take data for granted, they must consider all market observable and relevant facts, trends, comparable transactions and other information. In cases where market data is limited or essentially non-existent (as for some specialized properties, for example), the valuer should properly disclose the situation and indicate whether the calculation is in any way limited due to lack of data. The valuer's own judgment is required in all valuations, but the valuation report should disclose whether the valuer is making the determination
market value from market data, or the nature of the property and the lack of comparable market data force him to rely more heavily on his judgment.

6.5. Since changing conditions are characteristic of markets, evaluators must consider whether the available data satisfies the criteria for market value .

6.5.1. Periods of rapid changes in market conditions are characterized by rapidly changing prices. This state is usually called disequilibrium. The period of disequilibrium can last for years and have a decisive influence on current and expected market conditions. In other circumstances, rapid changes in the economy can lead to market data volatility. If some sales do not fit into the market situation, the appraiser will usually assign less weight to them. The appraiser can still draw a conclusion about the real price level of the market based on the available data. Individual transaction prices may not be indicative of market value, but analysis of such data should be taken into account in the valuation process.

6.5.2. In conditions of scarce supply or when market conditions deteriorate, the market may or may not have a large number of “interested sellers”. Some transactions (but not necessarily all) may include elements of financial (or other) pressure or conditions that reduce or exclude the practical interest of some owners in the sale. In such market conditions, valuers should take into account all relevant factors and assign to individual transactions such weights that, in their opinion, properly reflect the situation in the market. Liquidators and administrators of the bankruptcy estate are usually required by position to receive the maximum price from the sale of assets. However, sales can take place without proper marketing or after an insufficient marketing period. The valuer should analyze these transactions to determine the extent to which they meet the requirements for determining market value, as well as the weight to be assigned to such data.

6.5.3 During transitional periods in markets that are characterized by rapid increases or decreases in prices, there is a risk of overvaluation or undervaluation if historical information is given unreasonably high weight or if unreasonable assumptions are made about future market conditions. In these circumstances, valuers must carefully analyze and reflect the actions and reactions of the market and ensure that their reports fully disclose the results of their research and conclusions.

6.6. concept market value also assumes that in a market value transaction, the property will be properly placed on the market with free access for a sufficient period of time and with the necessary advertising. The listing is expected to take place prior to the actual valuation date. The markets for non-current assets are generally different from the markets for stocks, bonds, and current assets. Non-current assets are often unique. They are usually sold less often and, moreover, are sold in markets that are less formal and less efficient than, for example, in the case of listed securities. In addition, non-current assets are less liquid. For these reasons, and because non-current assets are not normally traded on a public exchange, the application of the concept market value requires the use of assumptions, such as adequate exposure of the property to the market within a reasonable period of time for proper marketing and completion of transaction negotiations.

6.7. Income properties that relate to long-term investments of an investment company, pension (accumulative) fund, trust company or company with similar forms of property rights are usually valued on the basis of selling assets on an individual basis in accordance with a measured sales plan. The total value of such assets, considered as a portfolio of investments or as a group of assets, may be more or less than the sum market values all assets taken individually.

6.8. All evaluations should state their purpose and intended use. If the valuation function is related to the preparation of financial statements, then, in addition to other requirements for the valuation report, the Valuer must indicate with complete clarity in which category each of the assets is classified.

6.9. In exceptional situations market value may have a negative value. Such cases include certain leased properties, some specialized properties, obsolete properties that cost more than the value of the land to demolish, some properties that have been affected by environmental pollution, and others.

7.0. Disclosure Requirements

7.1. Evaluation reports should not be misleading. Evaluations carried out to determine and report on market value, must meet the requirements of section 5.0. Reports must contain specific reference to the definition market value, given in this standard, together with a specific indication of how the property is regarded in terms of its usefulness, or best use(or most likely use), as well as a statement of all underlying assumptions.

7.2. Determining the magnitude market value, The valuer must clearly state the valuation date (the date to which the valuation refers), the purpose and function of the valuation, and other relevant and appropriate criteria to ensure that the Valuer's observations, judgments and conclusions can be adequately and logically interpreted.

7.3. Although it may be appropriate in certain circumstances to accept and use alternative expressions of value, the valuer should ensure that if such values ​​are found and included in the report, they should not be interpreted as if they represent market value.

7.4. In the event that the assessment is carried out by an “internal assessor”, i.e. those who work either in the enterprise that owns the property being valued, or in the accounting firm responsible for preparing the financial documentation and / or financial statements of the enterprise, a special clause should be included in the valuation certificate or valuation report on the existence and nature of such relationships.

8.0. Retreat conditions

8.1. When operating in accordance with this standard, any derogation may only be made in accordance with the requirements of IVS 3, Valuation Reporting.

9.0. Effective Date

The International Property Valuation Standards Committee was formed in 1981. The activities of the Committee are carried out by member organizations that, as of March 1994, represented the societies of appraisers of the following states:
Australia Iceland Netherlands
Belgium India New Zealand
Brazil Indonesia Norway
Canada Ireland Pakistan
Cameroon Italy Singapore
Czech Republic Japan South Africa
Denmark Kenya Spain
France Korea Sweden
Germany Luxembourg Switzerland
Ghana Malawi Trinidad
Greece Malaysia Tobago
Hong Kong Mexico UK
Zambia Zimbabwe
United States of America
This text has been verified against the text of the Standard published by the International Committee for Property Valuation Standards on English language. The standard joined The International Assets Valuation Standards Committee,
12 Great George Street,
Telephone: 071-222-7000;
Facsimile: 071-222-9430
force on 24 March 1994. The International Assets
Valuation Standards Committee,
12 Great George Street,
Parliament Square, London SW1P3AD.
Telephone: 071-222-7000;
Facsimile: 071-222-9430

INTERNATIONAL ASSESSMENT STANDARDS

STANDARD 1
MARKET VALUE AS A BASIS OF VALUATION
The content of this Standard should be read in the context of the preliminary material and introductory advice contained in the Preface and Chapter " General Concepts and Principles of Evaluation".
1.0. Introduction
1.1. The purpose of this Standard is to introduce a general definition of Market Value. In addition, the Standard explains, in terms of this definition and its application to the valuation of property, the general signs of a situation in which the objectives and methods of valuation require the determination of the Market Value.

1.2. Market Value is a representation of the exchange value, or the amount of money that would be received for a property if it was offered for sale on the open market on the valuation date, subject to the requirements specified in the definition of Market Value. In order to estimate the Market Value, the appraiser must first estimate the best use or most likely use of the property (see ICFOS Foreword, paragraph 6.3). This usage may be the same as the current one, or it may be different. This is determined based on market data.

1.3. Market Value is determined using valuation methods and procedures that reflect the nature of the property and the most likely conditions under which the property would sell on the open market. The most common methodologies for estimating Market Value are the Sales Comparison Method, the Capitalized Income or Discounted Cash Flow Method, and the Cost Method.

1.4. The Cost Method has two possible applications, one of which can be used in estimating Market Value. In the Market Value application, all method parameters are taken from open market data. When applied to non-market situations, the parameters are chosen in a different way. To complete the picture, the Residual Recovery Value (RCV) method combines market and non-market elements and cannot determine Market Value. When deriving, presenting and using Market Value, it is important not to get confused by these different cost approaches.

1.5. All methods, procedures and techniques for measuring Market Value, if based on market values ​​and correctly applied, lead to the same expression of Market Value. The Sales Comparison Method or any other comparative market method relies on market observations. Construction costs and the degree of depreciation should be determined based on the analysis of market estimates of costs and accumulated depreciation. The Income Capitalization Method, or Discounted Flow Method, should be based on market-determined cash flow and rate of return. Therefore, despite the fact that the choice of a specific method is mainly due to the nature of the information available, the characteristics of the market and the specifics of the property being valued, the result of all the procedures mentioned should be the same - Market Value (if all methods were based on market information).

1.6. The way in which a particular property usually moves on the open market serves as an indicator of applicability. various methods and procedures for estimating Market Value. Any method based on market information is inherently comparative. For each valuation problem, there are one or two methods, usually better than others that reflect the situation on the open market. For each property being appraised, the appraiser, in determining the Market Value, must consider all methods available to him and select the most appropriate from them.
2.0. Application area
2.1. This Standard is applicable to the valuation of the Market Value of property - typically real estate and items directly related to it. This assumes that the property in question is being valued as being sold on the open market, and not as part of an ongoing business or from any other point of view.
3.0. Definitions
3.1. Market Value in the context of the Standards is defined as follows:
Market Value is the estimated value - the amount of money for which the property must change hands on the date of valuation between a willing buyer and a willing seller as a result of a commercial transaction after adequate marketing; it is assumed that each of the parties acted competently, prudently and without coercion.

3.2. The term "property (assets)" is used because of the relevant focus of these Standards. However, the term "property" could have been chosen instead for generality of definition. Each element of the definition has its own conceptual background:
3.2.1. "Estimated value..." refers to the price, expressed in terms of money (usually in local currency), that could be paid for the property in the course of a commercial transaction. Market Value is measured as the most likely price that could realistically be obtained at the valuation date in a market that satisfies the conditions for determining Market Value. This is the highest price realistically possible for the seller and the lowest price realistically possible for the buyer. The calculation does not take into account prices that are overstated or understated due to special conditions or circumstances of the transaction, such as an atypical form of mutual settlements, a sale with the receipt of property back for rent, special compensations and discounts, or if there is one of the signs of a Special Value (as defined by the ISCSI Standard 2 ).

3.2.2. "...the property must be transferred..." emphasizes the fact that the value of the property is a calculated value, rather than a predetermined or real sale price. This is the price at which the market expects, at the valuation date, that a sale of the property would occur that meets all other requirements for the definition of Market Value.

3.2.3. "...at the date of valuation..." expresses the binding of the estimated Market Value over time to a specific date. Due to the fact that markets and market conditions may change, the calculated value for a different point in time may be incorrect or incorrect. The result of the assessment reflects the actual state of the market on the date of assessment, but not on the past or future date. In addition, the definition assumes that the transaction that determines the Market Value is completed at the same time as the property changes hands, so that no price variations are possible.

3.2.4. "...between willing buyers..." refers to someone who has motives to buy but is not forced by anyone or anything to do so. Such a buyer is not ready to pay any price - neither out of too much desire, nor out of urgent need. This buyer, moreover, makes a purchase acting in accordance with the realities and expectations of the current market, and not an imaginary or hypothetical market that cannot be seen or believed to exist. The prospective buyer will not pay a higher price than the market dictates. The current owner of the property is also among those who make up this "market". The Valuer should not make unrealistic assumptions about market conditions or conditions or assume higher than reasonable levels of Market Value. In some countries, specifically to highlight this important circumstance, the definition of Market Value omits the words about the willing buyer.

3.2.5. "... the willing seller..." does not burn with the desire to sell, is not forced to sell at any cost at any price, and is also not inclined to insist on a price if it is not considered reasonable in the current market. A willing seller is interested in selling the property on market terms after adequate marketing at the highest possible price on the open market, whatever that price may be. The actual details associated with the real owner of the property are not taken into account in this case, since the "willing seller" is a hypothetical owner.

3.2.6. "... as a result of a commercial transaction ..." means that there is no special relationship between the parties (for example, parent and subsidiary or landlord and tenant) that may result in an atypical price due to the presence of an element of special value. The transaction that determines the Market Value must be between parties who are not connected in a special relationship and act independently in their own interests.

3.2.7. "...after adequate marketing..." means that the property must be put on the market for sale in the most appropriate way in the sense of obtaining the highest price realistically possible in accordance with the determination of the Market Value. The duration of marketing may vary depending on market conditions, but in any case should be sufficient to ensure that the property attracts the attention of an adequate number of buyers. Naturally, the marketing period is assumed to precede the valuation date.

3.2.8. "...each party acted competently, prudently...": it is assumed that both the willing buyer and the willing seller are sufficiently informed about the nature and characteristics of the property being sold, its existing use and potential use, and the state of the market on the date of the assessment. Further, it is believed that each of them, having this information, acts prudently in his own interests, trying to achieve the best position in the transaction from the point of view of the price. Prudentness is understood in the sense of striving for profit at the time of assessment, and not some kind of foresight of the situation. It is not necessarily imprudent for a seller in a falling market to sell a property at a price below previous market price levels. In this case, as in other situations of buying and selling in conditions of changing prices, a prudent buyer or seller acts in accordance with the most complete information about the state of the market that is currently available.

3.2.9. "...and without coercion.": the emphasis is on the fact that each of the parties is interested in the transaction, but none of them is forced or pushed by anyone or anything.
3.3. Market Value is understood to be the value of the property, calculated without regard to trading costs and without taking into account any associated taxes.

4.0. Relationship with accounting standards
4.1. There are many terms used by both Assessors and accountants. In some cases, this may lead to misunderstandings and possible distortion of the meaning of the Standards. ICFSI Standard 1 defines Market Value and provides a discussion of the general concepts associated with the Market Value Standards. Some of the other important terms defined in the ICSOI Standards 1 and 2 are the basis for formulating more special requirements MKSOI Standard 3.

4.2. As defined by the ISCSI Standard 3, the Market Value of a property under Current Use is based on the assumption that the property will continue to be used in the same manner as it has been used to date. Market Value in Existing Use is a special case of determining Market Value. In doing so, the Market Value of surplus or investment assets is considered on the basis of the most efficient use, regardless of whether it coincides with existing application or not.

4.3. In accordance with the reasoning of the ICSOI Standard 3, Market Value is the basis for the valuation of non-specialized properties carried out in connection with financial reporting purposes. Standard 3 distinguishes between Market Value and other bases of value that should not be applied. Standard 3 also discusses the valuation of specialized assets for financial reporting purposes and distinguishes those methods from those that are not applicable to financial reporting under these Standards.

4.4. Specialized and location-limited assets rarely change hands on the open market except as part of the business or enterprise of which they are an integral part. Such assets are called owner-operated assets. If the most likely use of such property is inextricably linked to the business in which it is involved, the process of calculating its value is not based on market data and may require determining the value of the enterprise as a whole in order to then evaluate the contribution of each component of the enterprise to the total value. Standard 3 distinguishes these procedures from the Residual Recoverable Value Method and points out their non-market nature and incompatibility with the ICSOI Standards for Normal Financial Reporting.

4.5. In situations where the normal course of market operations is temporarily disrupted or suspended due to economic, political, social or other external causes The Market Value of a property may well prove to be immeasurable at the date of the valuation, especially if the market treats the disruption or stoppage of operations with serious concern. In such circumstances, it is the Valuer's duty to note these special conditions in the explanatory notes attached to the valuation report. In addition, the Valuer should express an opinion on the Market Value based on the previous price level or on the resumption of market activity, qualified and taking into account any loss of value associated with delays in the return of the market to normal operation. It is critical that a clear statement of all circumstances taken into account, the criteria for the valuation process, and the basis for the significant assumptions on which the valuation is based.

4.6. In some states, the Appraiser may be forced to use some specific definition of Market Value that satisfies certain legal and regulatory requirements of the jurisdiction in which the appraisal is performed.
5.0. The wording of the standard
5.1. Before undertaking a property valuation obligation, the Valuer shall determine whether the Valuer has sufficient knowledge and experience to perform the work in accordance with these Standards and other generally accepted valuation principles; in other words, he must:
Before accepting the obligation to bring to the attention of the client any discrepancy with any of the professional qualities;
Take all necessary steps to competently perform the work;
Upon completion of the work, the accompanying report should clearly state the situation and the steps taken to adequately reflect it.
5.2. When conducting a market valuation, the Valuer must understand and correctly apply the established methods and procedures necessary to obtain a reliable valuation.
5.3. When conducting a market valuation, the Valuer must adequately identify the property being valued, the interests associated with it, the purpose of the valuation and the intended use of its results, the extent of the data collection process, the restrictions imposed, the effective date of the valuation.

5.4. When conducting an appraisal, the Appraiser must identify and provide a definition of value that is appropriate for the context of the task. Where non-market value types are used, special attention must be paid to their clear and unambiguous distinction from Market Value.

5.5. In the Market Value appraisal report, the Appraiser must:
5.5.1. Present the results of the assessment in a comprehensive, accessible and unambiguously interpretable manner.
5.5.2. Provide users of the report with sufficient information to understand its background, reasoning, analysis and conclusions.
5.5.3. State all assumptions and constraints on which the assessment process was based.
5.5.4. Clearly identify and describe the property being valued and the nature and scope of its investigation.
5.5.5. Identify the interest or interests being valued.
5.5.6. Define assessed value, set effective valuation date and report date.
5.5.7. Give a full, exhaustive explanation of the applied bases of assessment, the reasoning for their application and the conclusions drawn.
5.5.8. Include in the report a signed act confirming the objectivity of the assessment, the fixedness (independence of the assessment results) of the professional fee or any other compensation; contain information about the applicability of the Standards and other explanatory material.
6.0. Remarks
6.1. The concept and definition of Market Value is fundamental to all valuation practice. The chapter "General Concepts and Principles of Valuation", on which these Standards are based, briefly explains the most important economic and procedural points.

6.2. Market Value, by definition, does not depend on the actual transaction that took place on the valuation date. Market Value is the settlement price that must be achieved in a transaction on the valuation date under market conditions consistent with the definition of Market Value. Market Value is the price at which a buyer and seller must agree at a certain point in time, subject to the conditions for determining Market Value, provided that each has had sufficient time to explore other market opportunities and alternatives. This does not take into account the time that may be required to prepare contracts and related documentation.

6.3. The concept of Market Value suggests that a price is negotiated in an open and competitive market. This circumstance causes the occasional use of the adjective "open" before the words "Market Value" (Open Market Value). The words "open" and "competitive" have a relative meaning. The market for the same property can be both international and local. The market may consist of a large number of buyers and sellers, or it may be characterized by a very limited number of participants. The market in which a property is offered for sale should not, by default, be considered narrow or restricted. In other words, the absence of the word "open" in the definition does not mean that the transactions in question will be closed or may be of a private nature.

6.4. Market valuation methods, as a rule, are based on the consideration of comparable properties. The valuation process requires the Valuer to conduct adequate research, competent analysis and the development of sound judgments. At the same time, Appraisers must subject all data to a comprehensive study, taking into account all relevant information, market trends, data on comparable transactions, and much more. In cases where market data is limited or virtually non-existent (as, for example, for some specialized properties), the Valuer should adequately reflect this situation and indicate whether, and if so, to what extent, the lack of information has affected the valuation . All valuations depend to some extent on the individual opinion of the Valuer, but the report should disclose whether the Valuer based the calculation of the Market Value on market data or whether his valuation, due to the characteristics of a particular property and the lack of comparable market information, was more based on a subjective opinion the appraiser himself.

6.5. Periods of sharp changes in the state of the market are manifested in sharp fluctuations in prices. This so-called disturbed equilibrium can last for a number of years and be at the same time the usual and expected state of the market in the near future. In other situations, sharp economic fluctuations can lead to significant scatter in market data. Transactions that are very different from the average market indicators, the Appraiser must take into account with a lower weight or discard altogether. Where there is a realistic market level, the Valuer is still able to rely on available market information in its judgment. Individual transaction prices may not be indicative of Market Value, but analysis of such market data should be taken into account in the valuation process.

6.6. Markets with poor or declining market conditions may not always have a sufficiently large number of "voluntary sellers". Some (though not necessarily all) transactions may involve elements of financial (or other) coercion or take place under conditions that reduce or nullify the actual voluntariness of some sellers. The appraiser must take into account all the significant factors of such a market and give specific transactions those weights that, in his opinion, best reflect the state of the market. At property sales, it is usually the responsibility of the liquidators to obtain the best possible price. However, transactions can be completed without sufficiently thorough or sufficiently long marketing. The valuer must determine to what extent such transactions satisfy the conditions contained in the determination of Market Value and what weights should be assigned to such data.

6.7. During transitional market periods characterized by sharp price fluctuations, there is a risk of overvaluing or undervaluing the property in question due to an error in the choice of weights attributed to data from real transactions, or due to unreasonable market forecasts. In these circumstances, the Valuer must carefully analyze and interpret the current state of the market and the trends existing in it, taking care that his report fully discloses the results of his research.

6.8. The concept of Market Value also assumes that in transactions that determine Market Value, the property has been put up for public sale for a sufficiently long period of time and with adequate publicity. It is assumed that these activities preceded the effective valuation date. The markets for fixed assets usually differ from the markets for stocks, bonds and other current assets. Property objects, which are the main assets, can be considered unique to a greater extent. They are usually sold less often and the markets for them are less formalized and less efficient than, for example, the market for registered securities. In addition, the underlying assets are less liquid. On this basis, and given that property of this nature is not a common item for sale by the general public, the Market Value of the underlying assets requires a substantial period of time for adequate marketing and negotiation.

6.9. Income-producing property acting as a long-term investment of a company - a holding company - a pension fund, a trust company or a company with a similar form of ownership - is usually valued on the basis of an individual allocation of assets in accordance with an established allocation scheme. The aggregate, "portfolio" Market Value of such assets may be greater (or, conversely, less) than the sum of the Market Values ​​of the individual components.

6.10. Any evaluation must be considered in the context of the objectives for which it is being carried out. If the purpose of the valuation is related to the preparation of financial documentation, then in addition to complying with all other reporting requirements, the Valuer must clarify in his report to which class of assets each subject property is classified.

6.11. In exceptional cases, the Market Value may be expressed as a negative value. Such situations include some cases of leasehold ownership, specific specialized properties, obsolete properties with demolition costs in excess of the value of the land, some environmentally unfriendly properties, and others. In some countries, the presence of negative values ​​in the financial statements is not provided.
7.0. Requirements for the structure of the report
7.1. The evaluation report must not be ambiguous or misleading. The valuation made for the purpose of calculating Market Value must comply with the requirements of Section 5. The report must contain a description of the specific application of the concept of Market Value as defined in these Standards, along with an indication of how value has been treated in terms of utility or best use. (or the most likely use), and the statement of any significant premises.

7.2. When calculating the Market Value, the Valuer must clearly identify the effective valuation date (the date from which the estimated value is determined), the purpose and objectives of the valuation, and other relevant criteria so that the results, judgments and conclusions of the report can be adequately interpreted.

7.3. While the use of alternative definitions of value may be acceptable in some circumstances, the Valuer should take care that, if used, such alternative definitions are not interpreted as representing Market Value.

7.4. In the event that the assessment is carried out by an "internal assessor", i.e. for those who work either in the enterprise that owns the property being valued, or in the accounting firm responsible for maintaining financial records and / or preparing the financial statements of the enterprise, a special clause should be present in the valuation act or report specifying the existence and nature of such relationships.
8.0. Deviation conditions
8.1. In some states, the Appraiser may be forced to use or refer to some specific definition of Market Value in order to comply with the legal or regulatory requirements of the jurisdiction in which the appraisal is being carried out. If the results of the assessment will spread beyond the jurisdiction to the scope international standards or where a local definition could lead to misinterpretation, the Valuer should also use the definition given in these Standards and indicate whether the choice of an alternative definition would result in a change in the valuation results.
9.0. Effective Date
9.1. This International Valuation Standard came into force on March 24, 1994.

On June 2, 2016, the ISSC released for comment the second (and final) part of the new version of the IES. We remind you that the first part of the IVS 2017 standards was released for comments on April 8, 2016 (see digest No. 1 with their analysis). The second part of IVS 2017, also open to public comment for a three-month period, includes the following standards:

Basically, these standards are based on similar standards available in the previous edition of the IVS (ISO 2011), with the exception that the former subsections of the "Comments to the standard" contained in the text of the standards are now included in the normative requirements of the standards themselves, which removes any doubts about the mandatory use of such “comments”, which previously arose among users of the MSO.

ISO 101-103 now also apply for the purposes of reviewing evaluation reports - such an expansion of their scope has required corresponding changes in the text of these standards. The previous version of IVS 101 Engagement for Evaluation required that it clarify the list of issues in writing before work commences. The underlying principle of the new Standard 101 is the valuer's obligation to ensure that all parties to the valuation engagement understand the scope of the work involved. Although a written assessment assignment is the most effective way to achieve this outcome, it is now recognized that a written assignment will not always be possible or necessary in all circumstances, in particular when preparing “internal assessments”. However, in the case of external independent evaluations, the appraiser, as before, is obliged to have a formalized assignment for the evaluation by the time the report is issued.

MSO 200–400 have not undergone significant changes, although in IVS 400 "Rights to Real Estate" an important change in practical terms is that, as part of the consideration of the income approach, the possibility of assessing the market value of income-producing property is now explicitly declared, taking into account the costs of raising capital (cost of capital) with potential buyers, i.e. the possibility of using the mortgage capitalization technique (Elwood method) as market method valuation that provides the determination of sustainable/fundamental market values.

The new standard is MSO 410"Property Valuation for Development". Development property is defined as follows: “Development property is generally property that has the potential for development and where its value in existing use is less than its market value. In the context of the standard, development property refers to property rights to properties for which, at the valuation date, either reconstruction / development is expected, or such reconstruction has already begun. As a basic method for valuing such property, it is proposed to use the residual method, which is based on subtracting the costs of its completion from the future estimated market value of the sale of the property (taking into account all uncertainties and discounting intertemporal flows, as well as adjusting for the developer's profit). The standard covers in detail all aspects of the application of this method and the requirements foreseen in relation to it. This standard is a significantly revised generalization of the former IVS 233 Investment Property at the Development Stage, which was included in IVS 2011, i.e. now the scope of this standard is generalized and it applies not only to property that is in accounting is classified (or will be classified after reconstruction/development) as "investment property" (including land).

IVS 500 Financial Instruments also has not undergone significant changes in terms of the level of detail of the scope of the subject area - it is still quite an overview standard, not related to the methods of conducting a valuation financial instruments as such. The Russian Society of Appraisers, together with the working group of the Commission for Appraisal Activities under the Scientific Council of the Russian Academy of Sciences on Eurasian Economic Integration, Modernization and Sustainable Development, based on the standard for financial assets from the previous edition of IVS 2011, prepared a draft standard for a more detailed level of application for conducting a practical assessment of a variety of financial tools, which is available in the Facebook group of the Commission.

Within the framework of the ISA 2017 project, the inclusion of application standards in the ISA code is not expected (there were two such applications in the ISA 2011 code - “Valuations for Financial Reporting Purposes” and “Evaluation of Rights to Real Estate for Secured Lending”).

The second batch of draft IVS 2017 will be open for discussion during a three-month consultation period ending August 31, 2016. Public consultations on the first batch of draft IVS 2017 standards (Introduction and principles of IVS, as well as standards on valuation bases and approaches and standard on the valuation of intangible assets - see Digest No. 1) will be completed on July 7, 2016

Proposals and comments of the Russian professional appraisal community regarding the reviewed draft standards of IVS 2017 for their analysis, translation and transfer to the IVS can be sent to the Russian Society of Appraisers at the addresses [email protected] And [email protected]

A single file, including drafts of all standards for IVS 2017, is available on the ISC website at

International Valuation Standards IVS 2003-05 1

2. Main highlights of the report 3

Radical change and harmonization of standards 3

The special position of the United States and the attitude towards American standards 4

Transition to IFRS 5

3. Fair value accounting model adopted 7

ROO comment. 7

4. Standard 3 (MSO 3) from the Code of Valuation Standards (SSO ROO) 2-03-2005. Compilation of the evaluation report 9

Relationship with Financial Reporting Standards 9

conditions for concluding a contract, an indicative list of questions for evaluation 12

6. MTR ROO 2-04-2005. Methodology for applying the assessment. Valuation for financial statements 15

Definitions of International Valuation Standards 15

IFRS definitions. 15

7. MTR ROO 3-11-2005 Methodological guidelines for assessment No. 11 (MR 11). Examination of grades 17

Introduction 17

Application area 17

Definitions 18

Relationship with Financial Reporting Standards 19

Guide 19

Effective date 20

Appendix 3 (ECO 2003). Reviewing another appraiser's appraisal reports 21

Introduction 21

Review process 21

Review of the evaluation report 22

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International Valuation Standards IVS 2003-05

This report is devoted to the valuation standards of the Russian Society of Appraisers (SSO ROO 2005) and was prepared with the participation of the National Council for Valuation Activities in the Russian Federation and the Scientific Council "National Property Management Strategy" at the Department of Social Sciences of the Russian Academy of Sciences.

The set of valuation standards is intended for use in the Russian Federation, as well as in the partner community with organizations of appraisers from the CIS countries, in full accordance with the accepted:

International Valuation Standards (ISO 2003-05) - "White Book";

European Valuation Standards (ECO 2003) - Blue Book;

As well as with the formulations officially included in the IVS from the latest International Financial Reporting Standards (IFRS 2004).

International and European assessment standards are adopted by the relevant non-governmental organizations: ^ International Committee for Valuation Standards (IVSC) And European Group of Associations of Appraisers (EGAO).

The Russian Society of Appraisers (ROO) is a member of both of these organizations. On the basis of officially obtained rights, ROO translates and publishes MSO and ESS in Russian.
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2. Key highlights of the report

I think that a significant part of those present are people who are somehow connected with business. Many of them remember the revaluation of fixed assets in the late 90s. And, for sure, remember this time with pleasure!

Since 2005, the worldwide transition to IFRS will not bypass Russia. For appraisers, this means a huge milestone.

However, in order to pass this stage, the skills and knowledge currently available are not enough. What else is needed is partly reflected in the International Standards, and I hope to discuss this within the next hour.

And now a few words why it is important for the appraisal community to adopt IVS and IFRS
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Radical change and harmonization of standards

These principles are now followed by almost all national organizations of appraisers, including those that have long formed their own valuation standards.

The oldest and most authoritative organization of appraisers in the world - the Royal Institute of Certified Surveyors (RICS, UK) - in the new edition of its standards, which appraisers call the "Red Book", supported the innovations of the ICSO in terms of assessments for financial reporting and for lending purposes.

And this means the simultaneous recognition of the radical changes that have occurred over the years in another "Red Book" - in International Financial Reporting Standards (IFRS); which, in turn, were agreed with the International Organization that unites commissions on securities(MOOKTSB).

A special role in the development of new economic thinking is played by professional valuation activities. The latest practice of property valuation recognizes "peaceful coexistence", primarily:

^ Market (fair) value property, which “reflects the collective perception and collective actions of market participants, and is the basis for valuing most resources in the economy market type” (MSO), and it is also an “objectively established value in exchange at a given date” (ESO);

^ Investment value or "value" property “for a specific investor or group of investors, with established value investment objectives” (MVS), and it is “ value in use based on subjective, non-market based valuation economic utility of the asset for the enterprise” (ESO).

The professional language of appraisers has become the testing ground for the basic concepts (categories) of political economy (or "economics"), as well as other economic disciplines, primarily finance and accounting, banking and investment analysis, corporate governance.

The valuation standards now make a clear distinction between valuations and in-kind (or technical) valuations, primarily for the extractive industries and for technology.

Back then, in the 1980s, “fair valuation” (assuming exchange) was understood as an expression of the “national economic approach to evaluating efficiency”, and individual evaluation for enterprises (of the use of resources) was associated with the so-called “self-supporting approach”. And each approach was assigned its own special role - exactly the same is implemented in modern methodology when assessing the Market (fair) and Investment value of the same property.

The main obstacle to mastering IFRS (when switching to these standards for accountants, i.e. representatives of the most massive economic profession) and MSO is that an accountant or appraiser needs to have his own professional opinion And articulated judgments(first - in words, and only then - in numbers and in "monetary terms").

Harmonization of valuation standards with the professions of accountants and auditors is of particular importance due to the fact that from January 2005, in the entire international community, as well as in Russia, the planned transformations related to the transition to international standards will begin in all these areas.
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The special position of the United States and the attitude towards American standards

The US has not adopted IFRS. The US does not recognize the Fair Value Agreement. Assets are recorded at depreciable historical cost ( in translations into Russian, accountants inaccurately call them - either the initial, the residual, or the replacement cost). The question of how assets should be "recognised" on the balance sheet is one of the key issues that must be addressed."

From authoritative sources it is known that, having abandoned the "harmonization" of standards, the Americans - with all the talk about their convergence - exclude the transition of their financial statements to a fair (market) value.

The coalition, formed by seven US and Canadian valuer organizations, "intends to encourage the use of market value concepts and help accelerate the simplification and convergence of international and US financial reporting standards." But the prospect global harmonization not even considered.

In the practice of economic measurements, the Americans use the simplest prerequisites, considering - and not without reason - their institutional-market system so perfect that it provides proximity to the theoretical concept of "perfect competition".

Indeed, this is not the case in any other country in the world. And if you agree with this, then it becomes clear why in the US the current market value is close to the amortized historical costs, which in practice can be measured more simply and more reliably. Although for appraisers, of course, the space for applying their knowledge and skills is reduced. Therefore, the actions of American appraisers on conquering a "place in the sun" very different from the behavior of appraisers in all other countries.

All this is very important to know. Russian appraisers, who have been reporting to US standards since 1993. In relation to economic theory, knowledge of American writings and research data is extremely important. However, the closer to practical work accountants or appraisers, those more dangerous use American standards and, especially templates., without a firm belief that their methodological foundations correspond to Russian conditions.

Therefore, the Russian Society of Appraisers, having made translations in 1996-98, subsequently stopped translating and applying the standards of the Appraisal Foundation (USPAP), as well as the standards of other American organizations of appraisers, and completely switched to working with the methodologically developing MSO and ESS.
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Transition to IFRS

Adoption ^ Code of Valuation Standards meets the interests of the domestic economy and allows our country to participate on an equal footing in international cooperation across the entire spectrum of economic dimensions.

In 2005, there will be significant changes in valuation activities associated with the expected start of the many times frustrated transition to a definitively recognized translation into Russian International Financial Reporting Standards (IFRS). This translation was made at the end of November 2004 in London by a special group, and the reaction of the accounting community to their proposed new professional language is not yet known.

Recently there have been reports that Russian government intends to approve the translation of the text of financial reporting standards into Russian, and this will inevitably be connected with all other economic standards, including those for valuation activities. But everything international organizations in terms of economic dimensions are non-governmental, no Russian state organizations can participate in them and influence the content of updated and supplemented international standards. Therefore, it is necessary that Russian professional organizations themselves begin to influence the formation of international standards, being sure that they will be applied in Russia as well.

The National Council for Valuation Activities in the Russian Federation signed a Cooperation Agreement with the Fund last summer "National Organization for Financial Accounting and Reporting Standards"(NSFO). In this agreement, the first task is to harmonize the glossaries of accounting and valuation terms.

But the essence of the problem lies in the ongoing change in the methodological foundations of economic measurements, and above all, in rethinking domestic and mastering the latest scientific developments in the world, including those related to the professional language. With regard to the peculiarities of the Russian language for economic measurements - so far scientific works did not work at all. Now domestic scientific organizations will be able to use the Code of Valuation Standards 2005 in order to provide an understanding and solution of this problem - together with those organizations and individual specialists who are practically engaged in valuation activities.

This Appeal expresses the position shared by the members of the two Councils - the National Council for Valuation Activities in the Russian Federation and the Scientific Council "National Property Management Strategy" at the Department of Social Sciences of the Russian Academy of Sciences (abbreviated as the Scientific Council of the Russian Academy of Sciences).
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3. Fair value accounting model adopted

(News - from the Chairman of the IVSC)

Fair value accounting is approved by the International Accounting Standards Board as the preferred basis for measuring assets.

With the introduction of IFRS in many parts of the world, and 2005 for all publicly listed companies in the European Union, the correct application of Fair Value becomes vital.

The IASB and the Financial Accounting Standards Board (FASB) are collaborating to try to harmonize relevant accounting standards. The question of how assets should be "recognized" on the balance sheet is one of the key issues that must be addressed.

At the same time, the FASB is conducting its own study on Fair Value and has recently released a draft for discussion.

The IASB defines Fair Value as:

“the amount for which an asset or a specified liability would be exchanged between knowledgeable, interested parties in a commercial (arm" s- length) deal."

Based on experience, it has been suggested that there should be a measurement hierarchy - with four levels of Fair Value determination.

Level 1 is determined by direct reference to the observable market price . In the absence of this - Level 2 - the adoption of some model is required in order to calculate the market price. Tier 3 - refers to the price actually paid (assuming no convincing evidence that this is unrepresentative). Level 4 - Allows methods using specific, internally generated data that can be calculated reliably and that do not conflict with market expectations.

^ International Valuation Standards (MSO) define Market Value as:

"the estimated amount for which an asset would be exchanged at the valuation date between an interested buyer and an interested seller in a commercial (arm" s-length) transaction after proper marketing, in which each of the parties would act, being knowledgeable, prudent and without coercion ".

The appraiser has experience in appraising similar property and knows the area of ​​its location;

The appraiser made (or did not make) a personal inspection of the property;

No one, other than those identified in the report, provided professional assistance in the preparation of the report.

5.1.12. include name, professional qualification and signature of the Assessor.

5.2. When evaluation reports are submitted electronically, The evaluator shall take reasonable steps to protect the integrity of the data/text in the report and to ensure that no errors are made during transmission. The software must ensure the security of the transmission.

5.2.1. The nature, date and time of transmission should be reflected, as well as the appointment, date and time of reception. The software must allow confirmation of the quality of the data and text transmission and the consistency of the transmitted and received information, and also contain the statement that the report cannot be read by anyone other than the author.

The evaluator must protect digital signature(signatures) and full control Appraiser through passwords (PIN codes), technical devices(security cards) or other means. A signature recorded on a report electronically is considered authentic and means the same level of responsibility as a written signature on a paper copy of the report.

^ Original electronic and/or paper copy of the report , transmitted electronically, must be retained by the Valuer for the period required by the laws of the state, but in any case not less than five years. Files of records of reports transmitted electronically may be stored on electronic, magnetic or other media. Note: the document must contain a signature!

The form of presentation of the Report is determined by the appraiser and the client based on the instructions and specifications of a particular appraisal assignment.

For all evaluation reports, all necessary documentation must be kept in working files to ensure the results and conclusions of the evaluation and must be retained for a period of at least 5 years after the completion of the evaluation.
^

5. Standard 3 (ECO 2003). Appendix 5. Approximate conditions for concluding a contract, an approximate list of questions for evaluation

Name and address of the appraiser

Report date

Dear Sirs,

Below is the assignment for the assessment of the object for the purposes:

Object of assessment:

^ Sources of information: Additional information on legal issues,

Associated with the subject property can be obtained from...., information on the subject

Accounting from....

^ Inspection object of evaluation: The organization of the inspection of the object will provide ...

Classification of the object of assessment: The object of assessment can be classified

As follows, depending on the purpose of the valuation: owner occupied (for business valuation purposes), investment (for purposes of determining profitability or return on capital), excess relative to the business, listed shares defined as working capital, etc.

^ Evaluation date: date of assessment, date of report and date of inspection must be as follows:

Additional requirements: Competence requirements under sections ^ Standard 2. (04-15) of these standards (appraiser independence and professional liability insurance), use of the ESS, date of completion of the appraisal, etc.

^ Specific content of the report: Please provide the following report content (the following list is not exhaustive, but only indicative):

Description: location, nature of repair, transport accessibility, drainage of the site, socio-economic factors, etc.

^ Basis or bases of value as they are defined in European standards
ratings:

Market value;

Cost at existing use;

Cost at alternative use;

Amortized replacement cost;

Forced sale price;

Calculation of cost under existing use;

Valuation at a date in the future or retrospective valuation, etc.

Appraisal of machines and equipment.

^ Market overview: including an assessment of the market potential of the property, potential market changes, current trends, obsolescence, etc.

Assumptions, including availability, determination of the property's market potential, assumptions regarding the existence of goodwill, renovations, city planning, sources of information regarding lease terms, licenses, environmental issues, etc.

With regard to environmental issues, the following assumptions must be made, which you must not change under any circumstances:

We have been instructed that for the purposes of this assessment, there is no contamination or that the cost of the decontamination work is immaterial in relation to the value of the property to be assessed;

We have no information from any study or report indicating the presence of contaminants or hazardous materials;

We have not carried out any research on the past or future use of the land under the appraisal or surrounding land, to establish the fact of contamination of the appraised property from such uses or from the surrounding areas. The value judgment is based on these assumptions;

No liability is assumed in case of detection of any contamination, nor for lack of expertise or scientific knowledge necessary to detect contamination. If it is subsequently determined that contamination exists at the assessed site or at any adjacent site, or that there are restrictions on the use of the site that could cause contamination, then in all such cases the final cost may be reduced.

The following assumptions were made regarding the repair:

We have not carried out any technical examination of the buildings, nor have we examined those parts of the building that are closed or inaccessible for inspection. We believe that such parts of the building are in good condition. We cannot express any opinion on the condition of the unexamined parts of the object, and the report should not be taken as confirmation that the frame and load-bearing structure of the building are in good condition.

financial data; Please report data on rent, construction costs, cash flow, discount rates and rates of return, and where possible, perform appropriate calculations and analyzes for sensitivity, risk, etc.

Plans, photographs and attachments: Please attach to the report all necessary maps and plans of the area, building plans (if necessary), data from third parties, as well as documents of various approvals, licenses, and etc.

Publication of results, responsibility of third parties and confidentiality - the ability of the evaluator and control of the use of the report by the customer. You may disagree with the form of this paragraph, and this statement may be abbreviated in your report. However, you must accept the following suggested limits on the report:

Neither the whole nor any part of this Appraisal Report/Certificate of Appraisal nor or any reference to these documents may be incorporated into any publication, prospectus or instruction, or issued without the Appraiser's written approval of the form and context of such publication. This report is confidential to you and your

Professional advisors and may be used for the sole purpose stated above. We cannot accept any liability if this report is used by anyone else for the purposes stated or otherwise.

With respect to confidentiality, we additionally require that no publication or reference be made based on this report without our written consent to the form and content.

^ Taxation and currency used: You must state the assumptions made in the report regarding the tax consequences of the valuation. You must assume that no tax liability arises. The valuation will be presented in the currency of the country where the valuation object is located, while the conversion into currencies of other countries will be made at the exchange rate on the valuation date

^ Payment for the services of an appraiser: agreed payment for the above work

Will be Excluding travel expenses, out of pocket expenses, and VAT

If you have any questions or on the points set out in the letter, please contact the author of this letter. Otherwise, please confirm your acceptance of the instructions contained in this letter.

Yours sincerely,

Title and position (in full).

Assessment checklist

Introduction

Standard 9 details the issues that a valuer should consider in their report. This Standard is to be read in conjunction with Standard 9. The following are the main issues to be considered by a valuer when preparing a value in use report:

Task, date and purpose of the assessment;

The basis for the valuation, including the type and determination of value;

Age of assets and their classification;

Identification of assets, their location, and the date and extent of their inspection;

Normative base;

Any special assumptions and limiting conditions;

Production, machinery and equipment;

Report on the compliance of the assessment with the ECO standards;

Other questions related to evaluation.
^

6. MTR ROO 2-04-2005. Methodology for applying the assessment. Valuation for financial reporting

Definitions of International Valuation Standards

3.2. Amortized replacement cost(AZZ). The current cost of reproducing or replacing an asset less physical depreciation and relevant (relevant) relevant forms of obsolescence and optimization.

Improvements. Buildings, structures or landscape changes that are permanent and involve labor and capital and are designed to improve the utility and value of the property. Improvements have different uses and economic lives.

^ Specialized property. Property that is rarely (if ever) sold on the open market, other than by selling the business or organization of which it is a part, due to its uniqueness arising from the specialized nature of the buildings, their configuration, size, location, and other circumstances.
^

IFRS definitions.

3.6. amortized amount. The cost of creating / acquiring an asset or other amount substituted for the cost in the financial statements, less its residual value (IFRS 16, paragraph 6).

3.7. residual value. The estimated amount that an entity would currently receive from the disposal of an asset, after deducting the expected costs of disposal, if the asset were already of the age and condition expected at the end of its useful life (IFRS 16.6.).

^ Property occupied by the owner. Property held by the owner (or lessee under a finance lease) for use in the production or supply of goods or services, or for administrative purposes. (IFRS 40.5).

^ Investment property. Property (land or a building, or part of a building, or both) that is held (by the owner or the lessee under a finance lease) to earn rental income or for capital appreciation or both, and not for:

a) use in the production or supply of goods or services, or for
administrative purposes, or

B) sales in the ordinary course of business. (IFRS 40, 5.).

^ Accounting amount. The amount at which the asset is reflected in the balance sheet after subtraction
any accumulated depreciation and accumulated impairment losses
(IFRS 16, paragraph 6; IFRS 36, paragraph 6).

Depreciation (depreciation or redemption). Systematic distribution
depreciable amount of an asset over time beneficial use. (IFRS 16,
item 6, IFRS 36, item 5).

^ Fair value less costs to sell. The amount that can
to receive from the sale of an asset or unit that generates cash income when
condition of a fair deal between informed and free parties, for
minus the costs of its implementation (IFRS 36, paragraph 6).

^ Net realizable value. Estimated sales price under normal maintenance
business less the cost of doing the work and estimated costs,
required for sale (IFRS 2, paragraph 6). Net realizable value relates to
the net amount that an entity expects to realize from the sale of inventories under
ordinary business. Fair value reflects the amount for which the same
the stocks themselves could be exchanged in a transaction between knowledgeable and
motivated buyers and sellers in the market. The first corresponds
the specifics of the organization, the second - no. Net realizable value for inventory can
and not be equal to fair value less costs to sell (IFRS 2,
item 7).

^ Reimbursable amount. The recoverable amount of the asset or business units that generate
cash income is the larger of the following two quantities:

Its fair value less costs to sell and its value in use (IFRS 36, paragraph 6).

^ Overvalued amount. The fair value of the asset at the revaluation date for
less any subsequent accumulation of depreciation and subsequent
accumulated impairment losses (IFRS 36, paragraph 31).

^ Fixed assets. Tangible assets that:

A) are held by the enterprise for the purpose of use in production or supply
to others for the production of services or products, for rental, or for
administrative purposes;

b) expected to be used for more than one production
cycle (IFRS 16, paragraph 6).

^ Cost in use. Present value of future cash flows,
that is expected to be received from the generating asset or business unit
cash income (IFRS 36, paragraph 6).
^

7. MTR ROO 3-11-2005 Methodological guidelines for assessment No. 11 (MR 11). Examination of estimates

Introduction

1.2. Due to the need to ensure the accuracy, relevance and quality of valuation reports, valuation expertise has become an integral part of professional practice. In the examination of the assessment, the correctness, consistency, validity and completeness of the assessment are considered.

An appraisal review may require the participation of experts with specialized
knowledge in the field of construction, income from property, in matters of law and
taxes or environmental issues.

An appraisal review provides a verification of the reliability of the
assessments focusing on:

the apparent adequacy and relevance of the data used and
inquiries made;

Appropriateness of applied methods and methods;

Checking whether the analysis, opinions and conclusions are relevant
and justified;

Checking whether the presented product is generally
complies with or exceeds the Generally Accepted Valuation Principles.

1.3. Assessments are reviewed for a variety of reasons, including:

1.3.1. due diligence required for financial
reporting and asset management;

Testimony of experts in litigation and similar situations;

Foundations for Business Decisions

Determining whether a report complies with regulatory requirements when:

valuations are used as part of the mortgage lending process,
especially mortgages insured and regulated by the state;

It is necessary to check whether the Assessors complied with the regulatory
standards and requirements within its jurisdiction.
^

Application area

Compliance with this manual is entrusted to the Appraiser, who, within the powers of supervision and management, signs the expert opinion on the assessment, thereby assuming responsibility for the content of this expert opinion.

Definitions

An appraisal of a valuation may support the same conclusion about the value being reviewed, or it may result in disagreement with the conclusion about that value. Valuation reviews provide a credibility check on the valuation, as well as verification of the work of the Valuer who developed it, in terms of the knowledge, experience and independence of the Valuer.

In some states, the valuation examination may also establish an update performed by the Valuer of the same valuation firm that performed the original valuation.

Evaluation organizations around the world distinguish between different types of expertise, for example, administrative examinations (compliance examinations), technical examinations, desktop examinations, field examinations, examinations designed to ensure that the assessment is carried out according to professional standards(where the bases of value used in the valuation in question are accepted), examinations that collect general market information to support or challenge a value judgment, and expertise, which check specific data in the assessment under consideration with comparable data from the sample group,

^ Administrative expertise (compliance expertise). An examination of a valuation by a client or user of valuation services, as a matter of due diligence when the valuation is to be used for decision-making purposes such as underwriting, buying or selling property. The Valuer may, on occasion, conduct administrative reviews to assist the client in the performance of these functions. Administrative review is also undertaken to ensure that the valuation meets or exceeds all or exceeds all compliance or market-specific guidelines and, as a minimum, complies with the Generally Accepted Valuation Principles (GPR).

^ Technical expertise. A valuation review conducted by the Valuer to form an opinion as to whether the analysis, opinions and conclusions in the reviewed report are relevant, reasonable and acceptable.

3.4. ^ Desktop expertise. Examination of the assessment, limited to the data presented in the report, which may or may not be independently verified. Usually conducted using a checklist of items. The reviewer checks the accuracy of the calculations, the validity of the data, the relevance of the methodology, and compliance with the client's instructions, regulatory requirements, and professional standards. See also Field examination.

^ Field examination. An appraisal review, which includes a survey of the exterior and sometimes the interior of the property in question, and possibly a survey of comparable properties, to confirm the data presented in the report. This is usually done using a checklist that covers the items to be checked in the desktop appraisal and may also include validation of market data, research to collect additional data, and verification of the software used in preparing the report. See also Desktop expertise.

^ Auditor's report. A written statement that describes the scope of the audit
survey, summarizes the findings and expresses the auditor's conclusion
regarding the accuracy of the financial statement in presenting the financial position of the company for a specified period.
^

Relationship with Financial Reporting Standards

Management

5.1.1. identify the client and intended users of the Valuation Expertise, the intended use of the Expert Valuer's opinions and conclusions, and the purpose of the engagement; identify the property in question, the date of the Appraisal Expertise, the property and property interests valued in the report in question and the date of validity of the opinion in the report in question and the Appraiser(s) who completed the report in question;

Identify the limits of the examination process to be carried out;

Identify all assumptions and limiting conditions in the Appraisal Review;

Develop an opinion on the completeness of the report under consideration within the scope of the work applicable to the assignment;

Develop an opinion on the apparent adequacy and relevance of the data and any refinements;

Develop an opinion on the appropriateness of the methods and methods used and develop reasons for agreement or any disagreement with the report under consideration; And

Develop a conclusion as to whether the analysis, opinions, and conclusions in the work under consideration are relevant, reasonable, and acceptable.

5.2. When presenting the results of the appraisal examination, the Assessor-expert must:

Indicate the names of the client and intended users; the intended use of the engagement results and the purpose of the engagement;

Specify the information to be identified in accordance with paragraphs 5.1.1-5.1.4 (above);

State the nature, extent and details of the examination process undertaken;

State the opinions, reasons and conclusions required in paragraphs 5.1.5-5.1.8 (above);

Indicate whether all relevant information is included;

Include the signed certificate in the examination report.

5.3. The assessor-expert should not consider events affecting the property
or the market following the valuation, but only information that could be
easy to get on the market at the time of evaluation.

5.4. The evaluator-expert must fully explain the reasons for agreeing or disagreeing with the conclusions of the evaluation report.

5.4.1. Where the Assessor agrees with the conclusions of the valuation report,
fully explain and disclose the reasons for such consent.

Where the Assessor disagrees with the conclusions of the valuation report, the reasons for such disagreement should be fully explained and disclosed.

Where the Assessor is not in possession of all the facts and information,
which the Assessor relied on, the Assessing Assessor must disclose the limitations
their conclusions.

5.5. Where the scope of the work undertaken is sufficient to form a new valuation, such valuation should comply with the requirements of the International Valuation Standards and the IVS Code of Conduct.
^

Effective Date

Appendix 3 (ECO 2003). Reviewing other appraiser's appraisal reports

Introduction

Before a third party reviews a report, they need to
obtain written permission from the authors of the evaluation report. However, it is not always practicable to obtain written permission, for example when the valuer is advising one of the bidders on various aspects of the content of the company's valuation report.

The performance of a report review consists of checking the work of other assessors to determine whether the results obtained comply with the requirements of ECO 2003 or any other national standards, as well as the conformity of the results obtained with the source data contained in the report and other known information.

Reviewing the assessment includes writing a separate report (review),
which reflects the results of the review. The content of the review other than information
on checking the completeness and consistency of the assessment procedures also includes