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TEGoVA General Assembly Approves Development of European Business Valuation Standards

October 22, 2018

85 delegates representing 54 valuers' associations from 29 countries attended the Autumn meeting of TEGoVA in Athens on 18-20 October. The meeting was hosted by the Association of Greek Valuers (AVAG).



Vote in Favor of European Business Valuation Standards (EBVS)

In a revolutionary step towards the development of the TEGoVA of the future, 85 delegates representing valuation associations from 29 countries, with near unanimity, voted in favour of TEGoVA developing European Business Valuation Standards (EBVS), at TEGoVA's Autumn General Assembly on 20th October 2018.

As explained by TEGoVA Chairman, Krzysztof Grzesik during his presentation of the proposal, whilst in the past TEGoVA has resisted entering into the field of business valuation, following its recent unprecedented growth, more than 15 of its 70 valuation association members serve valuers who undertake both real estate and business valuations and included amongst them are top authorities in in the field of business valuation. Thus EBVS will be a response to the demand amongst valuers in Europe for quality guidance on the valuation of businesses. These standards will be tailored to the needs of real estate valuers who also undertake business valuations as well as real estate valuers seeking to diversify into the field of business valuation. In this connection TEGoVA will be undertaking a gap analysis to determine the additional educational needs of Recognised European Valuers who wish to develop business valuation skills. Thereafter TEGoVA will support educational initiatives aimed at delivering such programmes.

It was also emphasised that EBVS will be a stand-alone publication, separate from the existing European Valuation Standards. They will be drafted in the coming months by a committee of business valuation experts within the ranks of TEGoVA's members and after a period of consultation presented for approval at a future General Assembly.

Other main agenda items included reports by Jeremy Moody, Vice Chairman of the European Valuation Standards Board (EVSB) and Philippe Guillerm, Chairman of the European Practice and Methodology Board (EVPMB) on progress being made towards an updated EVS 2020.

Definition of Market Value

Perhaps the most controversial of the EVSB's proposals is a change in the English wording of the definition of market value which currently reads as follows;

"The estimated amount for which the property should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without being under compulsion."

The above definition is that adopted by both EVS 2016 and the EU Capital Requirements Regulation (CRR). Unfortunately the original English language version has been mis-translated in several languages. In particular, the English idiom "in an arms length transaction" has in several languages been incorrectly translated as "on market terms"

The EVSB proposes that the definition should be changed as follows:

"The estimated amount for which the property should exchange on the date of valuation between a buyer and a seller acting freely and independently of each other after proper marketing wherein the parties had each acted knowledgeably and prudently, without being under compulsion and excluding any particular value to a party."

TEGoVA will seek a change in the CRR accordingly whilst retaining the existing definition until such time as the CRR is amended.

The Income Approach and Discounted Cash Flow

On the Methodology front EVS and EVPMB Board Member, Danijela Ilić delivered a presentation on proposed additions to the current EVS Information Paper 5 (EVIP 5). In particular she stressed the need to describe the Income Approach and Discounted Cash Flow methodology in more detail, in particular by highlighting the differences between an Implicit and Explicit Cash Flows.

Review of Mortgage Credit Directive- Valuation Provisions

The TEGoVA Secretariat's Michael MacBrien gave a detailed account of TEGoVA's AVM lobbying campaign to date and proposals which will be sent to the EU Commission and Parliament in connection with the an upcoming review of the Mortgage Credit Directive.

Prospective Value

Another highlight of the General Assembly was a presentation by James L. Murrett, President, Appraisal Institute (USA) on the US concept of "Prospective Value" involving "forecasting" future values.

On line CPD

Pat Davitt, CEO IPAV delivered a presentation on IPAV's on line CPD tool .


Spring 2019 General Assembly and European Valuation Conference

Melita Bestvina, President of President of HDSViP (Croatian Association of Court Expert Witnesses and Valuers) invited delegates to the Spring Meetings of TEGoVA in Dubrovnik, Croatia on 16th to 18th May 2019.


On the preceding day the Association of Greek Valuers (AVAG) organised a European Valuation Conference attended by over 200 local valuers and TEGoVA delegates at the Divani Apollon Palace Hotel in Athens.. The conference was titled "The Valuer's Added-value Services in Challenging Real Estate Markets" with the organisers managing to attract an array of top speakers from the TEGoVA and AVAG Boards namely Alexandros Vassiliou, AVAG President, Konstantinos Pallis, AVAG Treasurer, Krzysztof Grzesik, TEGoVA Chairman, Roger Messenger, Vice Chairman, Silvia Cappelli (ASSOVIB, Italy), Pat Davitt (IPAV Ireland) and Jean-François Drouets (AFREXIM France). Other distinguished speakers included Dimitris Sideris, Member of the Monetary Policy Council, Bank of Greece, Paloma Arnaiz Perez-Villamil (AEV), Paulo Barros Trindade ( President ASAVAL), Aris Karytinos, CEO Pangaia, Iñigo Amiano (AEV), Gonçalo Pascoal, Chief Economist, Millenium Bank and Adrian Vascu (ANEVAR).