China Releases New Standards and Expert Advice on Asset Valuation

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Apr. 4 – To raise the standards of asset valuation services in China, the China Appraisal Society (CAS), a national professional society for Certified Public Valuers (CPVs) in China, recently promulgated three new standards and two advice from experts:

Regarding the first standards, instances of “adoption of expert work” include:

  • Hiring experts with certain professional knowledge, skills or experience in a certain field to provide professional support for asset valuation; and
  • Utilizing professional reports issued by institutions with the relevant qualifications and experience in a certain field as the basis for asset valuation.

The standards clarify obligations when adopting expert work, and the relevant information disclosure requirements. It will come into effect July 1, 2013.

The standards for Forest Resources Assets regulate the valuation of such assets by introducing the latest theoretical and practical updates, while the Independence standards increase professional ethics requirements to enhance the credibility of CPVs. After the release of these three standards, the China appraisal standards system currently consists of 26 standards, including 2 basic standards, 12 specific standards, 4 valuation handbooks, and 8 guiding opinions.

The advice from experts regarding the disclosure reports for listed corporations’ significant asset restructuring comments on the key points of disclosures. Meanwhile, the advice from experts regarding quality control of operations of small and medium valuation organizations lays out the key components in establishing an effective quality control mechanism (e.g. putting in place an accountability system and employee training program).

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