by Brianna Crandall — July 18, 2016 — U.K.-based international real estate organization RICS (Royal Institution of Chartered Surveyors) recently commended the International Valuation Standards Council (IVSC) and U.S.-based The Appraisal Foundation on the release of A Bridge from USPAP to IVS, a document harmonizing differences between their separate standards, the International Valuation Standards (IVSs) and Uniform Standards of Professional Appraisal Practice (USPAP), respectively.
The bridge document marks a major and crucial step towards establishing a set of globally accepted ethical and professional standards for valuation, says RICS, and appraisers in the United States now have the guidance they need to produce appraisals that are also compliant with international valuation standards.
In the United States, most appraisers are required to comply with USPAP. The bridge document details the additional steps required to meet IVS and will serve as a tool for appraisers familiar with USPAP, enabling them to produce a valuation that is also compliant with IVS. The guidance helps to close the gap on the valuation standards between the United States and the rest of the world, increasing the comparability of real estate transactions for both inbound and outbound capital for the US and other countries.
David Bunton, president of the Appraisal Foundation, pointed out:
The harmonization work done by our respective standards boards revealed more commonalities than differences between the two sets of standards. Through this work what we’ve seen is that the core valuation standards, regardless of regulatory environments, business practices, and cultures, transcend the differences. We are confident that this effort will serve the entire global economy and increase public trust due to greater consistency in valuation stemming from a common base of standards.
Importantly, the bridge document provides consistency amid many different approaches for valuation worldwide. In cross-border transactions, the use of country or region-specific valuation standards can often cause confusion among international investors regarding the true value of assets. Harmonized valuation standards create greater transparency and comfort to international investors, and will support market confidence.
Senior executives from RICS applauded this effort undertaken on behalf of the global valuation profession to unify standards. Ben Elder, Global Valuation Director for RICS, commented:
The increasing flow of international capital and investment makes valuation standards even more critical. As an international professional body focused on property standards, RICS has supported the harmonization of USPAP and IVS to drive investor confidence in the valuation profession. It’s our responsibility to ensure that the market has confidence in the profession and adopts international standards to provide the public with assurance of transparency and consistency.
The full text of A Bridge from USPAP to IVS is available from The Appraisal Foundation’s Web site.
