IVS: A Practical Overview of Professional Standards, Ethics, and Valuation Practice

By Alexander Aronsohn | International Valuation Standards Council (IVSC) | London

Valuation sits at the intersection of technical rigor, ethics, and public trust.

The International Valuation Standards Council (IVSC) provides a global framework in the International Valuation Standard  (IVS) that governs valuations and valuation reviews. This article distils the core messages and highlights how the IVS framework shapes practice, ethics, and governance for valuation professionals worldwide, with a nod to how IVS operates in the UK regulatory landscape.

IVS exists to strengthen confidence in valuation by promoting globally consistent standards and universal adoption. Its principle-based approach recognises that valuations involve multiple parties yet places ultimate responsibility with the valuer. IVS emphasises professionalism, competence, and integrity, and requires clear documentation of the applicable IVS edition when referencing historical valuations. A two-tier framework distinguishes Mandatory requirements (must) from presumptively mandatory requirements (should), guiding mandatory actions while allowing  departures for legal, statutory, regulatory and/or other authoritative requirements appropriate for the purpose and jurisdiction of the valuation.
The IVS structure divides guidance into General Standards and Asset Standards. General Standards apply to all valuations and establish the foundational rules, including the Valuation Framework (IVS 100), Scope of Work (IVS 101), Bases of Value (IVS 102), Valuation Approaches (IVS 103), Data and Inputs (IVS 104), Valuation Models (IVS 105), and Documentation and Reporting (IVS 106). Asset Standards provide additional requirements for specific asset classes—Businesses (IVS 200), Intangible Assets (IVS 210), Non-Financial Liabilities (IVS 220), Inventory (IVS 230), Plant, Equipment, and Infrastructure (IVS 300), Real Property Interests (IVS 400), Development Property (IVS 410), and Financial Instruments (IVS 500). Appendices and the Glossary support consistency, including ESG considerations.

At the heart of IVS are five Valuer Principles: integrity, objectivity, confidentiality, competence, and professionalism. Valuers must exercise professional judgment and professional scepticism throughout the valuation process. They may engage specialists or service organisations for specific tasks, but the valuer retains ultimate responsibility for compliance with IVS. Quality controls should be implemented to ensure valuations are objective, transparent, and free from bias; the rigor of controls should reflect the valuation’s purpose, complexity, and risk.

A foundational concept is the distinction between valuation and value. Valuation is the process; value is the conclusion. The intended use and intended user drive the selection of bases of value and premises, such as highest and best use or current use. Premises and assumptions—whether ordinary or special—shape inputs and outcomes and must be reasonable, supported by evidence, and aligned with the valuation’s purpose.

IVS 101 (Scope of Work) requires a clearly defined scope agreed between client and valuer. The scope must identify the assets or liabilities, the commissioning party, the intended use and users, the valuation date, currency, and basis of value, and any data sources, assumptions, ESG considerations, and conflicts of interest. For valuation reviews, the scope must state whether the engagement is a process review, a value review, or both. Communication of any changes to scope must be in writing.

IVS 102 (Bases of Value) guides the selection of appropriate bases of value, acknowledging that some bases exclude transaction costs. Valuers must articulate the basis, the premises, and the assumptions underpinning the conclusion. When bases of value reflect market participant perspectives, the value should be consistent with observable market data whenever possible.

IVS 103 (Valuation Approaches) requires the application of the most appropriate approaches—market, income, and cost. The framework encourages using multiple approaches when data permit and reconciling indications with transparent justification rather than averaging. The market approach relies on comparables and multiples; the income approach converts projected cash flows to present value; the cost approach estimates value from replacement or reproduction costs, adjusted for obsolescence.

IVS 104 (Data and Inputs) stresses relevance, observability, and documentation. ESG factors are addressed when measurable and appropriate. The valuer must document sources, selection logic, and the rationale for significant inputs, maintaining a clear audit trail.

IVS 105 (Valuation Models) emphasises that no model can produce IVS-compliant results without professional judgment. Models must be fit for purpose, with ongoing maintenance and full documentation of inputs, outputs, limitations, and testing. Calibration against market data and periodic reassessment are essential.

IVS 106 (Documentation and Reporting) anchors the professional obligation to produce comprehensive, transparent reports. Reports should detail the scope, methods, inputs, assumptions, ESG considerations, and the rationale for conclusions. An IVS-compliance statement and report date are essential. Documentation must be retained in line with legal and contractual requirements.

Asset Standards expand this framework to specific contexts:

•    IVS 200 (Businesses) – values for enterprise, equity, or other concepts; consider control, synergies, and capital structure; methods may include Current Value Method, PWERM, or option-based approaches.

•    IVS 210 (Intangible Assets) – market, income, and cost approaches; discount rates, life expectancy, and TAB (tax amortisation benefits) considerations are important.

•    IVS 220 (Non-Financial Liabilities) – warranties, deferred revenue, environmental obligations; often assessed via bottom-up income approaches and scenario modelling.

•    IVS 230 (Inventories) – valuation for financial reporting and tax, with attention to partial completion and allocation of profit.

•    IVS 300–500 – valuations for tangible assets, development property, and financial instruments, each with rigorous data, modelling, and documentation standards.

​

The UK context adds a regulatory overlay: In the UK IVS is complemented by RICS Red Book (Global Standards 2025) and guidance from ESMA, HMRC, FCA, and professional bodies such as CIMA, ICAEW, and the FRC. Ethical conduct, independence, and governance are central, with litigation and expert testimony governed by CPR Part 35.

Ethics and conflicts of interest are integral. The IVSC Code of Ethical Principles, aligned with accounting bodies’ standards (CIMA, ICAEW, FRC), demands transparency and safeguards against bias. Practitioners should disclose conflicts, implement safeguards, and, where necessary, withdraw. Professional behaviour, confidentiality, and ongoing professional development underpin public trust.

Key takeaways for practitioners: start with a precise scope; choose bases of value carefully; apply multiple approaches when applicable, document data sources and ESG considerations; uphold ethical standards and independence; ensure IVS compliance in reporting and align with UK overlays where relevant.

This IVS 2025 framework manages valuation process risk through making valuations credible, defensible, and aligned with global expectations. Valuers must blend rigorous methodology with disciplined professional judgment, safeguarding the integrity of financial decision-making worldwide.