The Future of the Business Valuation Profession Reviewed by Momizat on . (Part III) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see wh (Part III) To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see wh Rating: 0
You Are Here: Home » QuickRead Top Story » The Future of the Business Valuation Profession

The Future of the Business Valuation Profession

(Part III)

To look to the future of the BV profession, we must explore the relevant dynamics within the industry. That starts with looking to our past to see what events and milestones brought us to where we are today, followed by ascertaining the economic and demographic trends leading us into the future, and culminating with identifying those trends which will have the greatest impact upon the profession. NACVA set upon drafting a white paper that would provide valuable insight to the future of the business valuation profession, with Chris Mercer taking the lead who is known by nearly every person in the valuation industry.

The Future of the Business Valuation Profession (Part III)


Business Valuation Standards


Prior to the 1980s, the development of business valuation as a profession was largely centered on the U.S. market, with little focus in the international community. Despite this, there were many similarities among various nations as to what constituted a qualified professional business valuator. Common qualifications generally included a college degree, evidence of specialized professional training, and appraisal or business valuation experience. Practitioners were to demonstrate competence, integrity, objectivity and to be of high moral character. Professional valuation bodies in various countries conferred professional designations and status to those who met the minimum requirements.

When this author entered the world of business valuation in the late 1970s, there were no business valuation standards in the U.S. Of course, those of us committed to the field sought to provide valuation services with high standards of performance.

Shannon Pratt’s first edition of Valuing a Business was published in 1981. There were no references to the idea of business valuation standards in it.

The financial crisis in the late 1980s spawned by an out-of-control savings and loan industry financing poor quality real estate projects changed things. The financial crisis provided the impetus for the creation of The Appraisal Foundation and the Uniform Standards of Professional Appraisal Practice (USPAP).

The Business Valuation Committee of the American Society of Appraisers was initiated in 1981 and formally constituted in 1986. One of the goals of the Committee was to develop educational courses to train future business valuators. The NACVA was started in 1991. At that time, the ASA was the leading credentialling and educational organization, followed by the Institute of Business Appraisers , which ceased to exist in 2013.

USPAP was first published in 1989 and focused primarily on standards for real estate appraisal. A few years later, USPAP added Standard 9, which pertains to the development of business appraisals, and Standard 10, which pertains to the reporting of business appraisals. Standard 3 dealt with appraisal review for both real estate and businesses.

Beginning in the 1980s, business valuators began to address the need for business appraisal/valuation standards.

When First Established

The American Society of Appraisers issued its first business appraisal standard in June 1991, which is now “BVS-VIII Comprehensive Written Business Valuation Report.” In the late 1990s, the more comprehensive ASA Business Appraisal Standards were formally published. Additions were made during the early-to-mid 2000s, and a formal update was published in November 2009. The current edition, issued in February 2022, is available on the website of the American Society of Appraisers.[1]

The NACVA first published its Professional Standards in 1992. These standards have been updated on several occasions since then. The current version is available on the NACVA website.[2] It was last updated June 1, 2017.

The AICPA issued its Statement on Standards for Valuation Services No. 1 (SSVS-1) in June 2007. The current version is available on their website.[3] SSVS-1 was codified as VS Section 100, Valuation of a Business, Business Ownership Interest, Security or Intangible Asset, in 2015.


The International Glossary of Business Valuation Terms (IGBVT) published in 1999, was adopted by the following professional organizations:

  • American Institute of Certified Public Accountants (AICPA)
  • American Society of Appraisers (ASA)
  • Institute of Business Appraisers (now absorbed into NAVCA)
  • National Association of Certified Valuators and Analysts (NACVA)

Over the years, there has been a great deal of discussion about the issue of conforming the business valuation standards of the various organizations, (ASA, NACVA, AICPA). To date the only thing to come from this line of discussion was the IGBVT which was subsequently adopted by the Canadian Institute of Chartered Business Valuators (now the Chartered Business Valuators Institute (IVSC).[4] However, considerable “conformity” has been inherent between the various organization’s standards because each group made efforts to write their standards so as not to conflict with the other organizations standards.

The International Valuation Glossary (IVG) – Business Valuation was published in February 2022 by the American Society of Appraisers, the Royal Institution of Chartered Surveyors, the CBV Institute, and the Saudi Authority for Accredited Valuers.[5] The February 2022 edition of the ASA Business Valuation Standards noted above dropped the IGBVT from its content in favor of the new IVG. It should also be noted that over the years, the NACVA, on its own, has significantly expanded upon the IGBVT for its own adoption. A comparison of all the relevant business valuation glossaries, and their commonalities and distinctions, can be found at

International Valuation Standards (IVS)

The International Valuation Standards (IVS) were first published in 1985. The current edition of the IVS was published effective January 31, 2022.

The IVSC is funded and sponsored primarily by various Valuation Professional Organizations (VPOs) from around the world. The VPOs are members of the IVSC, as well as other organizations, including some of the largest accounting firms. Their goal is to provide appraisal/valuation standards in the global market space.

The IVSC’s original benefactors saw the need to develop valuation standards for the “rest of the world” since business valuation standards emerged rapidly in the United States following the 1989 publication of USPAP and NACVA entering the market in 1991. The VPOs in many countries simply lacked the resources to develop their own valuation standards, thus, IVS are more recognized in these countries and help to regulate, to a degree, the process of developing and reporting on a business valuation.


There is unified interest in creating conformity of work requirements and product for global accounting for fair value. Fair value determinations for U.S. companies ultimately should not differ materially from fair value for companies in international markets. Thus, finding new ways to bring about conformity makes sense, though this could possibly have been more easily achieved through standard setting and industry wide adoption.

As with the organization’s standards in the United States, there was a degree of effort by the IVSC to conform the IVS to USPAP (or at least not to conflict). Representatives of the IVSC and The Appraisal Foundation have met over the years to discuss issues related to conformity of standards. In doing so they are looking for overarching principles of valuation that apply universally.

Institutionally, USPAP is required to be followed in all appraisals required by the Federal Government in the United States. Thus, it is unlikely that conformity between USPAP and the IVS will go so far as to eliminate the need for one or the other. USPAP is not synchronized to the valuation requirements of other nations. And the IVS are not synchronized to meet the requirements of the in the United States Federal Government.

Most likely, these two standards will become more aligned as time goes on, but there will always be differences mandated by the differing requirements for the use of USPAP and that of the international landscape.

For the IVS to succeed in establishing meaningful and widely accepted international valuation standards, they must be based on principles, not procedures. The Standards Board of IVSC has a tendency to drill down into the mechanics of processes, attempting to provide detailed guidance.

Environmental, Social, and Governance (ESG)

Alexander Aronsohn, Technical Director: Intangible Assets for the IVSC, suggests that the IVSC was in the early stages of developing standards regarding the valuation of Environmental, Social, and Governance (ESG). The IVSC recently published Perspective Paper: ESG and Business Valuation.[6] This is also called sustainability in many cases. In a traditional business context, sustainability is about the company’s business model, i.e., how its products and services contribute to sustainable development and longevity.

According to the CFA Institute, investors are increasingly applying these non-financial factors as part of their analysis to identify material risks and opportunities for growth. ESG metrics are not commonly part of mandatory financial reporting, though companies are increasingly making disclosures in their annual reports or in standalone sustainability reports. Numerous institutions, such as the Sustainability Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), and the Task Force on Climate-related Financial Disclosures (TCFD) are working to create standards and define materiality to facilitate incorporation of these factors into the investment analysis process.

It is too early for standards, but we can expect discussion on the topic from the IVSC and, perhaps, other standards-setting organizations. The continuing concern in the valuation profession is if the organizations representing the industry do not develop standards for ESG, it leaves the doors open for regulators to come in and make the rules. Thus, the organizations have no choice but to be part of the conversation.

Predictions for the Future of Business Valuation Standards

  • Business valuation standards between organizations will become more aligned as time goes on, but there will always be differences mandated by the differing requirements for the use of USPAP and the IVS. NACVA has published two excellent documents:
    • One, comparing/contrasting standards published by the U.S. organizations
    • And another comparing/contrasting NACVA’s standards with organizations outside the U.S.
    • Those documents can be obtained here.
  • ESG may gain some momentum, and it may find its way into the business valuation analysis process at some point, and subsequently into the standards.

To learn more about business valuation standards and the industry as a whole, click here.


[1], Accessed May 5, 2021. The author was chairman of the Standards Subcommittee of the Business Valuation Committee of ASA when the 2009 version of The ASA Business Valuation Standards was published.



[4] The CBVI also developed standards fairly early somewhere along this timeline.



The National Association of Certified Valuators and Analysts (NACVA) supports the users of business and intangible asset valuation services and financial forensic services, including damages determinations of all kinds and fraud detection and prevention, by training and certifying financial professionals in these disciplines.

Number of Entries : 2551

©2024 NACVA and the Consultants' Training Institute • Toll-Free (800) 677-2009 • 1218 East 7800 South, Suite 301, Sandy, UT 84094 USA

event themes - theme rewards

Scroll to top