From the Chair of the Business Valuation Committee

I hope everyone had a great time at the Advanced Business Valuation Conference in Las Vegas. It was great to see everyone there. We had one of our best-attended conferences ever. Special thanks to Dan McConaughy, the chair of the conference, and Lisa Perry, the conference coordinator, for all of their efforts.

Public Company Valuation Credential

On October 5, 2015, the Appraisal Foundation hosted a roundtable, part of which focused on an ongoing initiative designed to improve the quality of financial reporting valuations for U.S. publicly traded companies. Senior representatives from the ASA, AICPA, and RICS, as well as the largest public accounting firms and the Appraisal Foundation (collectively, the “Organizations”) are involved with this new initiative and provided an update on progress. The discussions at the roundtable were lively, and the general feedback regarding this effort was positive.

This effort was established in response to public statements by U.S. capital market regulators that called into question whether individuals conducting fair value estimates for U.S. publicly traded companies have the requisite training, qualifications, experience, independence, and expertise to perform this type of work. Specifically, the regulators criticized the following characteristics of the current valuation profession:

• Lack of a unified identity of valuation experts

• Multiplicity of valuation credentials

• Lack of analytical consistency of valuation work product

• Lack of consistent qualifications and experience for valuation credentials

• Lack of consistent enforcement and disciplinary mechanisms for valuation experts

The Organizations have been working together to establish a common performance framework and quality control process, as well as the appropriate qualifications, for a public company fair value credential. These will be implemented based on jointly agreed upon criteria established by working groups comprised of senior representatives from the Organizations.

I understand some may question whether we need another valuation credential. That is understandable. However, the public and regulators need to have confidence in the fair values reported by U.S. public companies. Right now there are no uniform member qualification requirements or quality control processes among the world’s Valuation Profession Organizations (VPOs). The credibility of the valuation profession has been degraded as a result. As I’m sure you know, the public interest and our profession is best served by having qualified individuals perform a consistent and high quality valuation framework for fair value measurements.

This new initiative is expected to be launched in 2016 and will focus on business valuations (e.g., ASC 350 and 718) and intangible asset valuations (e.g., ASC 805). In the future, other property types, such as financial instruments, may be included in the initiative. The new fair value credential will have a common name and will initially be issued by the ASA, AICPA, and RICS. In order to obtain this credential, you will need to be a member of one of these organizations (but can join and have a pathway if not already a member). In the future, other VPOs may qualify to issue the new credential after the initial launch in 2016.

The ASA has many well-known and highly qualified experts participating in this effort and is playing a key role in the development of the new initiative. Stay tuned to hear more from the ASA about this exciting new initiative!

This Is Not Your Father’s ASA

ASA has really made amazing strides in recent years to offer its members cutting edge education, technology, and services. In recent years you have seen our new, modern website and branding. From a BV perspective, we recently have updated and revamped many of our classes and continue to be the only group offering a specialty intangible asset designation. We have implemented a marketing program targeted to nonmembers as well as the users of our services.

Another key development has been in the area of offering online education. ASA now has the ability to offer education in an on-demand (prerecorded) format and asynchronous (live, learn in smaller time increments over six weeks) format.

Recently we launched an online version of BV 201 in on-demand format and expect to have the other three courses available by mid-June 2016. This is an exciting development for those eager to get the BV education but find the travel and time demands challenging. We also are offering the national BV conference online for all three days of the conference (one track) for the first time. The content will be available live and also archived for those who could not attend or view live.

It is a great and exciting time to be part of the ASA. Stay tuned for further developments as there are many other things in the works!