Stakeholders harp on industry standardised framework on valuation
It seems like you're referring to the importance of industry-standardized frameworks for valuation in the eyes of stakeholders. Here's a breakdown of what that might entail:
Industry-standardized framework for valuation:
In various industries, such as finance, real estate, or energy, stakeholders often demand that valuations be conducted using standardized frameworks. These frameworks provide a common language, methodology, and set of assumptions to ensure consistency and comparability across different valuations.
Why stakeholders care about industry-standardized frameworks:
- Transparency and comparability: Standardized frameworks promote transparency by providing a clear and consistent approach to valuation. This enables stakeholders to easily compare valuations across different companies, projects, or assets.
- Consistency and reliability: Industry-standardized frameworks ensure that valuations are conducted using a consistent methodology, reducing the risk of errors or biases. This increases the reliability of the valuations and enhances stakeholder confidence.
- Regulatory compliance: In many industries, regulatory bodies require valuations to be conducted using standardized frameworks to ensure compliance with specific guidelines or regulations.
- Investment decisions: Stakeholders, such as investors or lenders, rely on valuations to make informed investment decisions. Standardized frameworks help them assess the value of an asset or project more accurately, reducing the risk of poor investment choices.
- Risk management: Industry-standardized frameworks can help identify potential risks and uncertainties associated with a valuation, enabling stakeholders to develop strategies to mitigate those risks.
Examples of industry-standardized frameworks for valuation:
- International Valuation Standards (IVS): Developed by the International Valuation Standards Council (IVSC), IVS provides a framework for valuing assets, such as real estate, businesses, and intangible assets.
- Financial Accounting Standards Board (FASB) Accounting Standards: FASB provides guidelines for financial reporting, including valuation standards for assets and liabilities.
- Real Estate Valuation Standards (REVS): REVS is a framework developed by the Appraisal Institute for valuing real estate properties.
- Energy Valuation Framework (EVF): EVF is a standardized framework for valuing energy assets, such as oil and gas reserves.
In summary, industry-standardized frameworks for valuation are essential for stakeholders to ensure transparency, consistency, and reliability in valuation processes. These frameworks provide a common language and methodology, enabling stakeholders to make informed investment decisions and manage risks more effectively.