International Valuation Standards

What are the International Valuation Standards (IVS)?

The International Valuation Standards (IVS) serve as a guiding framework for valuation professionals worldwide. They were established to enhance transparency and trust in the valuation profession. The IVS play a crucial role in raising the standards of international valuation practice, making them an essential part of serving the interests of financial markets and the public.

What is the mission of the IVS?

The IVS consist of five general standards and eight asset standards, also known as asset-specific standards:

• General Standards: These set the requirements for conducting all valuation tasks, including setting the terms of engagement, valuation bases, valuation approaches and methods, and report preparation.
• Asset Standards: These include requirements related to specific types of asset valuations, encompassing both general and specific information about each asset type that may affect its value in any way. They also cover specific requirements related to the approaches and methods used by the company for valuation.

What are the fundamental principles for setting valuation standards?

When setting the standards, the IVS boards take the following core principles into account:

1. Purpose: The objective or goal of the valuation.
2. Valuation Standards: The criteria and guidelines for conducting valuations.
3. Review and Development of Standards: Ongoing evaluation and improvement of the standards.
4. Jurisdiction: Consideration of legal and regulatory contexts.

Basic Principles for Valuers according to the IVS:

1. Ethics: Upholding integrity and ethical behavior in valuation practice.
2. Competence: Ensuring valuer proficiency and capability.
3. Compliance: Adherence to relevant standards and regulations.
4. Basis of Value: Determining the appropriate type of value standard to apply.
5. Date of Value (Effective Date or Valuation Date): Specifying the date as of which the valuation is applicable.
6. Assumptions and Conditions: Setting out the assumptions and conditions underpinning the valuation.
7. Intended Use: Defining the purpose for which the valuation is conducted.
8. Intended User: Identifying who will be using the valuation.
9. Scope of Work: Outlining the extent and limitations of the valuation process.
10. Asset Identification: Clearly defining the asset being valued.
11. Data: Collecting and analyzing relevant data for the valuation.
12. Valuation Methodology: Applying appropriate valuation methods.
13. Delivery of Valuation: Providing the completed valuation report.
14. Record Keeping: Maintaining thorough records of the valuation process.

Quality Control According to International Standards

Reyez Real Estate Appraisal Company follows the international standards (IVS) as endorsed by the Saudi Authority for Accredited Valuers (Taqeem). Reyez also adheres to the values of the authority, which include professionalism, transparency, fairness, creativity, excellence, and teamwork.

Practical Implementation:

• Assignment of Appraisers: Two appraisers are assigned for each valuation task.
• Documentation: All data collected by the team is thoroughly documented.
• Report Review: The appraisers' report is reviewed by senior management to ensure compliance with procedures based on the collected data.
• Value Determination: The final value is determined using one method or by reconciling the results of various methods through relative weighting.
• Issuance of Final Appraisal Certificate: A final appraisal certificate is issued, containing the final value of the property and the determinants based on which the appraisal was conducted.