IVSC consults on valuation of non-financial liabilities
Released 4 January 2019
The International Valuation Standards Council (IVSC) has published an exposure draft IVS 220 entitled Non-Financial Liabilities for public comment.
Non-financial liabilities include, but are not restricted to, operating leases, certain contingent consideration obligations, certain indemnifications and guarantees. In the draft, the IVSC recognises that the determination of whether a liability is financial or non-financial may often be difficult. While non-financial liabilities have limited accounting and valuation guidance, financial liabilities are often subject to specific accounting, valuation, and regulatory requirements. The Council goes on to warn that valuers must use judgement and rely on the applicable accounting and/or regulatory guidance when defining the subject liability as non-financial or financial.
Comments are invited on the draft by 1 April 2019.