Australia: Business valuers: New accreditation and guidance

Last Updated: 7 July 2014


There has been no list in Australia to allow lawyers, barristers and other engaging parties to search for recognised business valuers - until now.

The Institute of Chartered Accountants ('ICAA') is introducing a new Business Valuation ('BV') Specialist designation for its members which will list those accountants that have applied and satisfied the valuation education and experience criteria.

Furthermore, those engaging the services of business valuers who are also ICAA members, should be aware that the professional standard, APES 225 Valuation Services ('APES 225' or 'the Standard'), has been supplemented with a guidance note, APES GN 20 Scope and Extent of Work for Valuation Services ('APES GN 20' or the 'Guidance Note'). This provides guidance for selecting the type of valuation service and the extent of work to be performed.

In this issue of Forensic Matters, Fionna Oliver-Taylor, a Director in our Melbourne office, discusses these two important changes and the impact on business valuers and those engaging their services.

New designation - BV Specialist

The ICAA has introduced the BV Specialist designation which will be assigned to members who apply and meet the meet the valuation education and practical experience requirements.

Depending on the years of practical valuation experience, there are two pathways to obtaining the Business Valuation Specialist designation:

  1. postgraduate study of four subjects, or
  2. intensive workshop and assessment.

These members will then be included on the 'List of CA BV Specialists' - the first list or system for the registration of business valuers in Australia. This list may act as the 'first go to' for clients searching for a business valuer, and the designation will allow valuers to demonstrate their valuation skills, knowledge and experience to clients.

KordaMentha Forensic supports the ICAA's BV Specialist program and our applicable professionals will apply to become BV Specialists over the coming months. Considered in the context of other information concerning a valuer's experience and qualifications, it should provide a useful starting point as to the suitability of a valuer to particular engagement circumstances.

New guidance - APES GN 20

The new Guidance Note, APES GN 201, does not prescribe or create any mandatory requirements but provides guidance on the application of the professional standard, APES 225. It relates to:

  • selecting the type of Valuation Service; and
  • the scope and extent of work for Valuation Services.

The Guidance Note states that the client, not the accountant, should be responsible for selection of the type of the Valuation Service and, in making such determination, consider the relative benefits, costs and risks of each type. It also provides direction to the accountant as to the extent of work that should be performed for each type of Valuation Service but it remains, ultimately, a matter for professional judgement. Clearly there is also a role for the valuer to play in explaining the technical issues and other considerations inherent in each valuation type.

Selecting the type of Valuation Service

Scope and extent of work

APES 225

As to the scope and extent of work required by the accountant, APES 225 states:

A Member shall gather sufficient and appropriate evidence by such means as inspection, inquiry, computation and analysis to provide reasonable grounds that the Valuation Report and the conclusions therein are properly supported. When determining the extent and quality of evidence necessary the Member shall exercise professional judgement, considering the nature of the Valuation, the type of Valuation Service and the use to which the Valuation Report will be put.10


APES GN 20 provides the following general guidance to assist the accountant in exercising professional judgement in determining the extent of work required in respect of the type of Valuation Service.

Furthermore, APES GN 20 states that the practitioner may find it helpful to consider the following four areas when performing the Valuation Service:

  • the external environment in which the entity operates;
  • entity-specific, non-financial information (e.g. entity's operating structure and lifecycle stage);
  • entity-specific, financial information (e.g. historical and future orientated financial statements); and
  • valuation context and assessments (e.g. selection and application of Valuation Approaches, Valuation Methods and Valuation Procedures).

APES GN 20 includes an appendix with four illustrative examples which provide useful guidance for the valuer on how to apply the Guidance Note in different circumstances.


Although APES GN 20 does not prescribe or create any mandatory requirements, it provides guidance to ensure the provision of quality and ethical Valuation Services. The Guidance Note is intended to create better outcomes for the client so that they understand the benefits, costs and risks of the type of Valuation Services they have selected and that the extent of work undertaken and evidence obtained by the accountant is sufficient and appropriate.

Clients will also benefit from ICAA's new BV Specialist designation which creates a list of recognised business valuers with demonstrated valuation skills, knowledge and experience.

To obtain a copy of APES GN 20 or APES 225 visit:


1Released and effective in December 2013

2APES 225 (revised May 2012), para 2: Valuation Service means a service provided by a Member to a Client or Employer in performance of a Valuation Engagement, Limited Scope Valuation Engagement or a Calculation Engagement.

3APES 225 (revised May 2012), para 2: Calculation Engagement means an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Member and the Client or Employer agree on the Valuation Approaches, Valuation Methods and Valuation Procedures the Member will employ. A Calculation Engagement generally does not include all of the Valuation Procedures required for a Valuation Engagement or a Limited Scope Valuation Engagement.

4APES 225 (revised May 2012) para 2: Valuation Engagement means an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the Member is free to employ the Valuation Approaches, Valuation Methods, and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Member at that time. Where a Member has entered into a Valuation Engagement but during the course of performing the Valuation Engagement the Member becomes aware of a limitation or restriction that, if it had been known at the time the Engagement or Assignment was entered into, would have made the Engagement or Assignment a Limited Scope Valuation Engagement then the Valuation Engagement will become a Limited Scope Valuation Engagement.

5APES 225 (revised May 2012), para 2: Limited Scope Valuation Engagement means an Engagement or Assignment to perform a Valuation and provide a Valuation Report where the scope of work is limited or restricted. The scope of work is limited or restricted where the Member is not free, as the Member would be but for the limitation or restriction, to employ the Valuation Approaches, Valuation Methods and Valuation Procedures that a reasonable and informed third party would perform taking into consideration all the specific facts and circumstances of the Engagement or Assignment available to the Member at that time, and it is reasonable to expect that the effect of the limitation or restriction on the estimate of value is material. A limitation or restriction may be imposed by the Client or Employer or it may arise from other sources or circumstances. A limitation or restriction may be present and known at the outset of the Engagement or Assignment or may arise or become known during the course of a Valuation Engagement. A Limited Scope Valuation Engagement may also be referred to as a "restricted-scope valuation engagement" or an "indicative valuation engagement".

6APES 225 (revised May 2012), para 2: Valuation Approach(es) means a general way(s) of determining an estimate of value of a business, business ownership interest, security, or intangible asset using one or more Valuation Methods.

7APES 225 (revised May 2012), para 2: Valuation Method(s) means, within Valuation Approaches, a specific way(s) to determine an estimate of value of a business, business ownership interest, security or intangible asset.

8APES 225 (revised May 2012), para 2: Valuation Procedures means the act, manner and technique of performing the steps of a Valuation Method.

9APES 225 (May 2012): Valuation Report means any written or oral communication by the Member containing a Conclusion of Value or a Calculated Value.

10Para 4.5 of APES 225 (May 2012).

11APESB Acting Chairman Stuart Black, APESB Media Release, 19 December 2013.

12APESB Acting Chairman Stuart Black, APESB Media Release, 19 December 2013.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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