RICS publishes new UK Supplement to Red Book
On 14 November RICS published a new UK Supplement to the Global Standards released in 2017. It is effective from 14 January 2019. It replaces the RICS Valuation – Professional Standards UK January 2014 (revised April 2015).
The key message is that the new Supplement does not impose any additional mandatory obligations on RICS valuers operating in the UK. The main changes are:
The new title and changes to the text emphasise that these standards contain additional matters that apply in the UK. Some believed that the 2014 UK standards were an alternative to the Global standards.
There has been considerable rearrangement and redesignation of the previous text. The distinction between the mandatory requirements and non-mandatory guidance is improved, with the latter now making up over 90% of the content.
The guidance is now more logically organised.
There is new guidance on commercial lending and compulsory purchase valuations.
Guidance on the use of the depreciated replacement cost method has been removed to a standalone Guidance Note. The 2014 guidance on lease classification for financial reporting and on the analysis of commercial lease transactions have been "temporarily retired" pending the development of updated standalone guidance.
When the Consultation Draft for this new Supplement was issued in June 2018 we had a number of concerns. We are pleased to say that most of these have been addressed in the final version, although some problems remain. We comment on these in our Quick Guide.