At the request of the American Society of Appraisers (ASA), Ray Rath of Globalview Advisors developed and presented the ASA Business Valuation (BV) Webinar on “Overview of the Mandatory Performance Framework.” Ray’s two-hour webinar provided a detailed discussion of current valuation standards including a detailed discussion of elements of the Uniform Standard of Professional Appraisal Practice (USPAP) that are relevant to business appraisers. Competition between appraisers to obtain valuation projects and the lower valued added nature of many financial reporting valuations can lead to significant fee competition to obtain valuation assignments. Price competition and low project fees can increase the risk that appraisers may not perform adequate valuation due diligence in completing projects. USPAP provides high level standards on the sufficiency of procedures required to complete an appraisal. To help appraisers perform and report projects with an adequate degree of effort, a Mandatory Performance Framework (MPF) document is being developed to provide guidance for certain financial reporting valuations. The MPF is a key component for a multi-organization effort to enhance the quality of certain valuations prepared for financial reporting purposes. The MPF provides detailed minimum performance requirements for financial reporting valuations, including certain minimum procedures required to be performed and appropriately documented.
The webinar reviewed USPAP standards as well as elements of the recently issued Mandatory Performance Framework (MPF). The webinar also included a comprehensive discussion of MPF and the Application of the Mandatory Performance Framework that were recently issued.
The webinar also provided the below learning outcomes:
- Recognize key elements of USPAP valuation standards and their relationship to MPF.
- Understand the purpose and scope of MPF.
- Discuss documentation requirements for a valuation report and a valuation work file.
- Explain concepts of professional skepticism, evidence-skepticism and self-skepticism.
- Recognize areas of business valuation subject matter guidance.
- Describe MPF and documentation requirements.