Now Italy Has Its National Valuation Standards

RELEASED BY OIV, THE ITALIAN STANDARDS SETTER, PRINCIPI ITALIANI DI VALUTAZIONE (PIV) WILL BE EFFECTIVE FROM 2016. A KEY STEP TOWARDS BETTER VALUATION QUALITY AND GREATER MARKET TRANSPARENCY

After three years of work and consultations, today the Italian standards setter (OIV) has released Principi Italiani di Valutazione (PIV), the Italian Valuation Standards, available in Italian for reading only on the site www.fondazioneoiv.it and published as a book by Egea (OIV, PIV, Principi italiani di valutazione 2015, 392 pages, 50 €).
 
With the release of the national standards that define the constraints professionals are required to respect in the valuation of companies, securities, properties, plants, equipment, trademarks, patents, etc., Italy ranks among the most advanced countries, such as the USA, Germany, Canada, Japan, China, Hong Kong and Singapore.
 
Other countries, including France and the United Kingdom, make only use of the International Valuation Standards (IVS), whose level of detail, however, is quite low. The Italian Valuation Standards are coherent with the international ones and consider the legal requirements prescribed by the Italian Civil Code, being therefore more effective in constraining the work of the experts.
 
"The valuation standards are one of the pillars of the proper workings of the economy and financial markets", OIV President, Luigi Guatri, says. "Their function is to increase the trust of valuations end-users, who are not necessarily the customers".
 
"The experience of countries that have released national standards," explains OIV Vice President, Piergaetano Marchetti, "suggests that, with their introduction, valuations reliability increases dramatically, because they reduce the dispersion of different valuations".
 
Unlike the United States, where the valuation standards were issued under pressure from supervisory authorities and the government in the aftermath of the Savings & Loan crisis of in the 80s, in Italy we have followed a bottom-up process, ignited by the four professional associations (AIAF, Italian association of financial analysts; ANDAF, National association of administrative and financial directors; ASSIREVI, Italian association of auditors; CNDCEC, National council of chartered accountants and accounting experts) and the two institutions sensitive to the public good represented by the trust in valuations (Bocconi University and Borsa Italiana, the Italian Stock Exchange), which established OIV.
 
The standards released today will be effective as 1 January, 2016, to allow time for valuation experts to analyze the standards and adapt their processes. Although there is no cogency of law, from that date on experts who will use the standards in a valuation will be required to declare it, allowing easier control activities, and experts who won’t will be pressured to justify their choice in front of the professional community.

by Fabio Todesco