International Valuation Standards Council opens office in Singapore

THE International Valuation Standards Council (IVSC) has opened an Asia office – its first outside Europe – in Singapore, launched on Wednesday (Jul 6) by Minister in the Prime Minister’s Office and Second Minister for Finance and National Development Indranee Rajah.

The launch is a milestone in Singapore’s growth as a hub for intangible assets, which include patents, trademarks, brand image, and software, said Indranee. IVSC is the independent global standards setter responsible for international valuation standards (IVS).

As the global economy becomes more digital, innovative and connected, intangible assets will rise in importance, said Indranee, noting that the share of intangible asset market value among S&P 500 companies has risen from about 60 per cent in the 1990s to about 90 per cent today.

In South-east Asia, the traditionally tangible-asset led economy has transformed to a more intangible-asset based economy, with growing e-commerce and fintech businesses, she noted. With record mergers and acquisitions amid the region’s tech boom, “valuation is critical to ensure that intangibles are fairly valued, so that they can be accurately reflected in their market value during deals”, she said.

Most intangible assets today are not recognised on balance sheets, leading to a “sizable gap between the actual intangible asset value compared to what is disclosed”, she added.

The international standards established by IVSC provide an important guide for valuation professionals, to ensure consistency and credibility. “With an established framework, financial institutions may be more willing to consider the value of intangible assets in their assessment,” said Indranee, adding that this could open companies up to new funding sources and better pricing.

In recognition of the growing importance of intangible assets, Singapore has set up working groups for related standards and guidelines, as well as a disclosure framework, under the Singapore Intellectual Property Strategy 2030 masterplan, said Indranee.

“We are targeting to launch a consultation on the draft disclosure framework with the wider industry by year end. I encourage all of you to provide your feedback then,” she added.

IVSC said it chose to locate its Asia office in Singapore due to the latter’s position as a global financial centre and its status as Asia regional headquarters across a diverse range of industries.

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“Asia is a hugely important region in terms of its role in the global economy and is a driving force behind the ongoing global development of the valuation profession," said IVSC chief executive Nicholas Talbot.

The IVSC Asia Office will lead the IVSC’s engagement with Asia-based financial and securities regulators, governments, other standard setters, professional organisations, and firms working in valuation.

Among other services, the office will provide technical expertise to the IVSC’s independent standards boards and organise events in Singapore such as the IVSC annual general meeting, roundtables and thought-leadership masterclasses and webinars.

The IVSC Board of Trustees is chaired by the United Kingdom's former Chancellor of the Exchequer Alistair Darling, with vice chair Lim Hwee Hua, Singapore’s former Second Minister for Finance.

“The IVS are used throughout the world and are already well established in Asia, in particular for the valuation of tangible assets,” said Lim, adding that with the Asia Office, IVSC is better placed to support the continued uptake of IVS and the development of the valuation profession, while drawing on regional expertise.