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APES 225:

Valuation Services Fact Sheet

APES 225 Valuation Services (the Standard) sets out mandatory requirements and guidance for members who provide
valuation services. The primary professional obligations imposed by this standard are to mandate the valuation reporting
and documentation requirements.

Scope and application
APES 225 took effect on 1

J anuary 2009 and was revised in May 2012. The revised standard is effective for Valuation
Engagements or Assignments commencing on or after 1 September 2012. It requires members in Australia to adhere to
its mandatory requirements when they perform a valuation engagement or assignment. For members outside of Australia
the scope of the Standard must be followed as long as local laws and/or regulations are not contravened.

Fundamental responsibili ties of members
APES 225 requires members to observe and comply with their public interest obligations when they perform a valuation
engagement or assignment. Further, they must comply with Section 100 - Introduction and Fundamental Principles of
APES 110 Code of Ethics for Professional Accountants (the Code) and relevant law or regulation.

The Standard requires that members comply with their professional obligations established in accordance with the Code
in respect of:

Section 100 Public Interest
Section 130 Professional Competence and Due Care
Section 140 Confidentiality
Section 210 Professional Appointments
Section 220 Conflicts of Interests
Section 280 Objectivity - All Services.

Exampl es of what constitutes the provision of a valuation service
For a valuation service to exist the following three criteria must be satisfied:

the member must be engaged or assigned to perform a valuation
the member must determine an estimate of value of a business, business ownership interest, security or
intangible asset by applying valuation approaches, valuation methods and valuation procedures
the member must be engaged or assigned to provide a valuation report (written or oral).

Members are referred to Appendix 1 of APES 225 which provides a schematic overview of what constitutes a Valuation
Service and 23 examples that illustrate what constitutes a valuation service and what is not a valuation service.

Professional engagement and other matters
APES 225 reminds members of their professional obligation to document and communicate the terms of engagement in
accordance with APES 305 Terms of Engagement. Where a member engages services of a suitably qualified third party,
the member cannot disclose the opinion or the name of that third party without their consent. The only exception is where
there is a legal obligation of disclosure.

APES 225:
Valuation Services Fact Sheet

APES 225 specifies the elements that members need to include in a valuation report to a client or an employer. In most
instances members in public practice will issue written reports. However, the Standard allows members in public practice
to issue oral reports in certain circumstances. Where the valuation report is communicated orally the member in public
practice needs to document the oral communication and the reasons why the valuation report was issued orally. In
addition to the above, the standard also recommends members in public practice to include additional information such as
a summary of relevant financial and industry information in the valuation report.

Refer to the Standard for information concerning:

the three types of valuation services
professional independence
use of a third party expert
reporting requirements
use of a glossary of business valuation terms
professional fees.

The above material is only general in nature and not intended to be specific to the readers circumstances. The material does not relieve you of your
obligation, as a member of CPA Australia, to ensure that you comply with professional standards. To keep up-to-date members should visit the APESB
website at apesb.org.au.

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Issued November 2012