IVS 500 Financial Instruments 2021
The Exposure Draft of a revised IVS 500 will cover the following subjects: governance, data, methods and models, controls and reporting. The Exposure Draft is being released in two phases. The Phase 1 draft, issued in December 2020 with comments due by 19 April 2021, contains proposals on definitions, governance and data. The aim is to produce a consolidated draft that will also include methods, models, controls and reporting by the final quarter of 2021.
The first Exposure Draft makes a number of strategic changes from the current IVS 500. These are:
To narrow the scope of the standard by expressly excluding pension liabilities, insurance contracts, lease contracts and equity instruments valued as part of a business or a business interest.
To write the standard from an entity perspective. The standard addresses matters which an entity should put in place for a valuation that is compliant with the IVS, rather than a set of rules that an individual valuer needs to follow, in other words it sets out to be a standard for valuation, not a standard for valuers.
To describe much of the content as guidance, or present it in the style of guidance rather than a set of mandatory or quasi mandatory requirements.
A copy of our detailed comments is below: