Professional Valuation as a Field within Economic Measurements: Its Bases of Valuation and Other International Standardization Challenges

Abstract

This Paper addresses the challenges of getting right the development of Valuation bases in the field of Professional Valuation and has a specific relevance for the International/European Valuation standards (IVS and EVS) standardization projects. It develops a Venn-diagrammatic approach to the logically complete set of valuation bases and follows the tradition implicit in the Austrian and neo-classical schools of economics to base values-in-exchange on subjective valuations of market participants (i.e. their values-in-use). The use of the Venn-diagrammatic tools helps clarify the meaning of certain bases of valuation advised by EVS and IVS standards in the field of Professional Valuation, i.e. Fair/Equitable value in EVS 2016 and IVS 2017 standard sets, Special/Synergistic value etc. The Paper concludes with some general suggestions on broadening the scope of the Professional Valuation standardization projects.

Keywords: Accounting measurements, Professional Valuation, Investment-Financial Valuation, bases of value, Market value, Fair value, Equitable value, International Valuation Standards, European Valuation Standards

JEL Classification: G12, D46