RICS Red Book Flashcards
What is the IVSC?
International Valuation Standards Council - Not-for-profit organisation that acts as the global standards setter for the valuation profession, service the public interest.
Hierarchy of standards frameworks?
- International Valuation Standards
- Global Red Book
- National or Jurisdictional Standards (UK National Supplement)
Structure of the Red Book?
- Introduction
- Glossary of key terms
- RICS Professional Standards (PS): PS 1 and PS 2 MADATORY
- Valuation technical and performance standards (VPS): VPS 1 to 5 MADATORY
- Valuation Practice Guidance Applications (VPGA): VPGA 1 to 10 ADVISORY
- IVS - Summary of main changes effective Jan 2022
Benefits of Global Standards for Valuation?
- Consistency in approach
- Credible and consistent valuation opinions
- Independence, objectivity and transparency
- Clarity (In regards to ToE’s, basis of value, reporting requirements).
What are the 10 VPGA’s?
VPGA 1 - Inclusion in financial statements
VPGA 2 - Secured Lending
VPGA 3 - Businesses and business interests
VPGA 4 - individual trade related properties
VPGA 5 - plant and equipment
VPGA 6 - intangible assets
VPGA 7 - personal property, incl. arts and antiques
VPGA 8 - real property interests
VPGA 9 - identification of portfolios, collections and groups of properties
VPGA 10 - material valuation uncertainty.
What are the 2 PS’s?
PS 1 - Compliance
PS 2 - Ethics
What are the 5 exemptions from VPS 1 - 5?
- Statutory Function
- Negotiation and Litigation
- Internal Purposes
- Acquisition or Disposal
- Expert Witness
18 Requirements set out in VPS 1 (ToE)?
- Identification and status of valuer
- Identification of client
- Identification of other intended users
- Identify the asset/property
- Valuation Currency
- Purpose
- Basis of Value
- Valuation Date
- Extend of valuers work
- Assumptions and special assumptions
- Nature and sources of information to be relied upon
- Format of report
- restrictions on use and publication
- Confirmation that the valuation will be done in accordance with IVS/Red Book
- Basis on which fee will be calculated (Fee)
- registration with RICS, complaints handling procedure etc.
- Statement that compliance with standards are monitored by RICS
- Statement on limitations of liability that have been agreed.
