By Andrei Skvarsky.
Asia-Pacific Economic Cooperation (APEC), a loose Pacific Rim trading bloc whose 21 member economies economies account for 44% of global trade, has decided to work for the adoption of uniform region-wide asset valuation standards as a step towards the global harmonisation of valuation practices.
Valuation standards vary considerably from nation to nation in the APEC area – as they do worldwide, – and so APEC finance ministers recently came to an agreement under which public and private sector organisations in the APEC economies would join forces with the International Valuation Standards Council (IVSC), a London-headquartered global standard setter for valuation, to iron out these discrepancies, according to an IVSC statement.
The accord was the result of an annual finance minister-level meeting in Beijing of APEC, a bloc that includes the United States, China, Japan, Singapore, Mexico and Peru.
The Asia-Pacific Business Advisory Council (ABAC) would join in the effort.
“For the very first time the need to address the current inconsistencies in valuation between countries has been formally acted upon by one of the world’s leading economic forums, whose members account for nearly half of all world trade,” the statement quoted IVSC chairman Sir David Tweedie as saying.”
“Currently, no single set of global standards for estimating the value of assets has been comprehensively adopted across the world. At best this inconsistency creates a barrier to trade; at worst it represents a systemic danger to markets and the global economy. APEC, as a leading economic forum, could promote a region-wide move towards globally accepted valuation standards.”
IVSC trustee Nicholas Brooke said: “APEC’s recognition of the importance of consistent valuation has been driven by the enormous investment volumes flowing in and out of the Asia-Pacific region. To invest with certainty you need asset valuations that can be trusted, particularly if publicly traded companies are involved.
“That is as true for mature economies within APEC such as the US, Canada and Australia as it is for emerging ones like Vietnam, Chile and Peru. This affects everyone, not least China whose funds are investing heavily around the world.”
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