The International Valuation Standards Council (IVSC), the international standard-setter for valuations across a wide range of assets, has signed a memorandum of understanding (MoU) with the International Private Equity Valuations (IPEV) board.
The parties have agreed to co-operate with a view to ensuring that the IPEV Valuation Guidelines are consistent with the International Valuation Standards and that the IVSC considers the needs of private equity and venture capital investors in its future work plan.
From now, the two bodies will collaborate in the preparation and publication of technical guidance and methodology for valuations of private equity and venture capital investments.
The agreement is a further landmark in the global acceptance of IPEV's valuation best practice for companies backed by private equity and venture capital funds.
The IVSC produced its first standards in the 1980s and today has a set of comprehensive standards covering a wide range of assets, especially those that will be relied upon by investors and other third party stakeholders. The financial crisis brought renewed focus on valuation issues and has led to a significant expansion in the organization's work plan.
Michel Prada, Chairman of IVSC, said: "Establishing a set of comprehensive valuation standards that are accepted and followed globally is an essential contribution towards better financial governance and very much in the public interest.
"International standards are only built through consensus and collaboration between all those with a stake in the process, and therefore we are delighted to have formalised this agreement with the IPEV Board as it represents an important part of the global investment community."
Herman Daems, Chairman of the IPEV board, said: "This agreement is further testament to the robust and relevant nature of the IPEV guidelines and their acceptance among institutions globally. On behalf of IPEV, I am delighted to enter this agreement with the IVSC, the recognized standard-setter for valuations.
"The positive impact of the IPEV Valuation Guidelines has been clearly seen over the last crisis. Consistent valuation processes during good times and bad times have delivered stakeholders of our industry with the required level of transparency regarding the value of their investments."