BVWire Australia Issue #4-2 | 17 November 2014

 
Dear Colleague,

BVWire—Australia was on the scene at the Chartered Accountants Australia and New Zealand Business Valuation and Forensic Accounting Conference 2014 last month, where we picked up loads of industry news, tips, and tricks of the trade for business valuation practitioners.

Keynote speaker Mel Abraham delivered an inspirational discussion on the traits “new world” business valuation practitioners should adopt and how they can depart from established industry traditions. Additionally, the expert rules and conduct in APES 215 were expanded on in an in-depth panel discussion.

Further afield in Canada, a lively debate on a unified global standard in business valuation and education was held with representatives from around the world.

Read below for more!

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Abraham brings a holistic, spiritual approach to BV conference

In a highly touted speech at the Chartered Accountants Australia and New Zealand Business Valuation and Forensic Accounting Conference 2014, keynote speaker Mel Abraham, featured in the October issue of Business Valuation Australia, delivered his opening plenary “How to build a valuation practice without having it suck the life out of you.”

The entrepreneur, author, and valuation consultant started off his presentation by quoting Indian mystic and spiritual teacher Osho in his appeal for attendees to become a champion of possibility. “The real question is not whether life exists after death but whether you are alive before death.”

Abraham proceeded to debunk a few of the great myths of the business valuation profession.

In the old world, business valuation professionals were of the opinion that:

  • They could do business valuation part-time;
  • All they need is a designation;
  • BV is just like other firm services;
  • All they need is a BV tab on their website;
  • If they build the BV business, clients shall come;
  • Valuing takes a lot of time;
  • They can do all types of valuations;
  • There is too much competition;
  • They can offer valuations without deep experience; and
  • They can do it alone.

Conversely, the new world of business valuation requires:

  • Practitioners to be perceived as an expert;
  • Experience and results;
  • Value-added services;
  • Business valuers to develop a separate identity from other financial experts and differentiate themselves from the crowd;
  • Constant connection with the audience;
  • An effective use of BV tools;
  • Mastery in a niche and then expansion;
  • Effective positioning of one’s brand;
  • The creation of perception and experience; and
  • Mentors and coaches.

Abraham’s main advice to business valuation practitioners who want to become thought leaders is that they have to take control of the conversation to be relevant to their marketplace—to shift from transactional to meaningful, to elevate from simply broadcasting to being part of the community, and to be part of the cultural conversations taking place around them. Practitioners are their own media companies, and they should convey these messages throughout all of their communication.

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A lively night of discussion and drinks on first night of BV conference

In a conference networking session sponsored by Business Valuation Australia (BVA), industry movers and shakers debated and discussed the current state of the local business valuation sector.

PwC partner and event organiser Richard Stewart gave a conference debrief, while BVA editorial advisory board chair John-Henry Eversgerd delivered a call to action for conference attendees to write technical valuation articles—a proposal that was heartily seconded by Mel Abraham who, in his insightful talk, praised the benefits of publishing in journals such as BVA for raising one’s profile in the valuation industry.

The networking session culminated in a lively discussion kick-started by another BVA editorial advisory board member, Simon Dalgarno, owner of Leadenhall Corporate Advisory, on how the Australian and New Zealand valuation professions can strive to maximise the impact of the CA BV specialisation.

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Conference panel discussion on expert rules and conduct under APES 215

APES 215—otherwise known as the Standard—sets out mandatory requirements and guidance for members who provide forensic accounting services.

A Business Valuation and Forensic Accounting Conference 2014 panel that included principal of Halligan & Co Brendan Halligan, FCA; forensic services manager of independent broad-based Anticorruption Commission in Victoria Geoffrey Crawford, FCPA; manager of forensic accounting at Edwards Marshall Martin White, and Accounting Professional and Ethical Standards Board (APESB) technical director Channa Wijesinghe, FCA, discussed:

  • The background to APES 215 and its revision;
  • Key changes to definitions;
  • Key changes to the mandatory requirements and guidance;
  • Revisions to Appendix 1;
  • Development of the decision tree diagram;
  • Development of 23 examples; and
  • APESB communication strategies.

Key changes to the mandatory requirements and guidance include:

  • Conflicts due to previous services performed by a member’s firm (paragraph 3.5);
  • Amendments to the Expert Witness Report (paragraph 5.6):
  • Member’s specialised knowledge derived from the member’s training, study, or experience (2013) versus member’s specialised training, study, or experience (2008);
  • Clarification that expert evidence is either opinion evidence or other evidence; and
  • Clarification on what constitutes working papers (paragraph 5.9).

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Thought leaders meet to discuss global unification of BV profession

International BV players gathered on 23 October in Toronto, Canada, for a significant debate on global valuation standards and education.

Landmark MOU: During its annual general meeting, preceding the debate, the International Valuation Standards Council (IVSC) announced the signing of what they call a landmark memorandum of understanding (MOU) designed to boost confidence in the valuation process.

The MOU, signed by some of the world’s largest valuation professional organisations (VPOs), represents a commitment to comply with a single global set of standards for valuing assets. The organisations that have committed to comply with the IVSC standards within the next three years include the American Society of Appraisers (ASA), Canadian Institute of Chartered Business Valuators (CICBV), China Appraisal Society, and the Royal Institution of Chartered Surveyors (RICS).

“Variation of international standards for valuing assets represents a potential problem for global markets and economies, and it has to be in the public interest to bring the various nationally based standards together to create a single set of globally accepted principles,” Sir David Tweedie, chairman of the IVSC Trustees, said in a statement.

“This is a landmark achievement and represents a major step towards getting global adoption of international valuation standards,” he added.

Education debate: Following the IVSC meeting, Business Valuation Resourcesexecutive editor Andy Dzamba moderated a panel discussion on global BV education that was webcast live (recording available free if you click here).

“The question is not what we should do, but what is the right thing to do,” said Mary Jane Andrews, chair of the International Institute of Business Valuators (IIBV).

“There’s a global warming of the BV profession toward the ideas of valuation standards and education, and we need to be ready to respond to them,” said Bob Morrison, chair of the ASA Business Valuation Discipline Committee who taught the IIBV course in Australia earlier this year.

“CICBV members are already asking for an international education and certification,” countered Pierre Maillet, who is with PwC in Montreal and is on the CICBV board. He warned that it takes years to develop these things, so the route is to support country-specific standards via the VPOs rather than a new international organisation.

“Young people in our profession need a certification that’s global, portable, and recognised,” agreed Doug McPhee, global head of BV education at KPMG.

The panelists agreed that, generally speaking, education should be standardised internationally. “But at the national level, and at the level of practicing internationally, you need to demonstrate an additional international competency,” said Morrison. “What good is the market approach in a local economy with no secondary market? Knowing that is a key part of international competency.” One route is for the IVSC to weigh in on whether VPOs meet the minimum standards of an international body for common, high standards.

While it’s unclear what tangible actions will be taken in the short term, it’s important to keep this dialogue going in order to move forward with a global unification of the BV profession.

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Have you downloaded your issue of Business Valuation Australia?

Remember to subscribe to Business Valuation Australia (BVA), our quarterly journal for Australian and New Zealand business valuation practitioners. With BVA, you keep up with the latest thinking in business valuation, analysis of new methodologies, regulatory and standards updates, and much more. Highlights of the October BVA include:

  • “Valuer’s Q&A Corner”: advice from Bob Morrison, ASA, who taught the IIBV course in Australia earlier this year;
  • Key valuation issues arising in family court, by Trevor Vella;
  • Applying the size premium, by Matthew Ashby; and
  • Five tips to enhance the valuation analysis, by Bob Morrison.

Learn more and subscribe today for $451 (AUD) a year. Click here or call 0011-1-971-200-4834.

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We welcome your feedback and comments. Contact the editor, Sonia Nair, at editorau@bvresources.com.
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In this issue:

New Age BV?

Inside BV conference

APES 215

Global BV standards and education

Inside BVA


 

 

 

 

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