Australian valuation professionals are invited to comment on draft professional standard for valuation definition and methodology, an important profession-led initiative intended to establish a clear and practical framework for valuing physical assets.  It’s application includes the valuation of fine art and antiques, memorabilia and collectables, plant and machinery, aviation and marine assets, through to rare books, coins and stamps.

The document is the draft of AVAA Professional Standard 17 – Valuation definitions and methodology, which recognises that a valuation is a professional opinion formed for a defined purpose, in relation to an identified asset and at a particular date. It explains how the purpose of an engagement influences the basis of value, assumptions and methodology adopted. It also reinforces that conclusions in a professional valuation report should be supported by relevant evidence, appropriate analysis and professional judgement.

A central feature of the draft standard is its definition of the different bases of value. These include Market Value, Insurance Replacement Value, Auction Appraisal Value, Fair Value, Scrap Value, Investment Value and Liquidation Value. Each serves a different purpose and may produce a materially different conclusion. The standard therefore requires the basis of value to be appropriate to the client’s intended use and clearly identified in the valuation report.

The draft also addresses the principal valuation methodologies. The market evidence methodology considers transactions involving comparable assets, including auction results, dealer transactions and private sales. The cost-based methodology considers replacement or reproduction costs, with adjustments for deterioration and functional, technological or economic obsolescence. The income-based methodology considers the financial benefits associated with ownership, including income, royalties, leasing arrangements and other returns.

This initiative is being shaped by the profession through the Auctioneers and Valuers Association of Australia (AVAA), the nation’s peak body representing certified valuers and auctioneers. The draft standard and the form for comment can be downloaded from the links below.

Importantly, the draft standard explains that asking prices do not necessarily represent completed transactions, cost does not necessarily equate to value and different methodologies should not simply be averaged. Where multiple approaches are used, the valuer must assess their relative reliability and reconcile them into a reasoned and supportable conclusion.

These principles have different implications across asset classes. Provenance, rarity and condition may be especially influential for fine art, jewellery and collectables. Utility, remaining life and obsolescence may carry greater weight for machinery, vehicles and equipment. Marine and aviation assets may require specialist technical information, while thinly traded or unique assets may require broader evidence and a fuller explanation of valuation uncertainty.

The draft also covers assumptions, limiting conditions, retrospective valuations, specialist advice, allocation between individual assets or collections, quality assurance and recordkeeping. Its provisions concerning retrospective valuations and the use of information available at the relevant valuation date are particularly important in taxation matters. This consultation provides an opportunity to develop a standard that addresses local client needs and Australian Taxation Office (ATO) requirements while aligning with internationally recognised valuation definitions and principles.

The practical experience of valuers across every asset class is essential to ensuring the final standard is credible, workable and distinctly relevant to Australian practice.  This document is a key component of the AVAA Professional Standards, which underpin the framework in which AVAA Certified Valuers (CVAu) provide quality service to clients.

Comments may be submitted until 31 August 2026. Feedback will be considered by the AVAA Membership & Professional Standards Committee before the proposed standard is submitted to the AVAA Board for approval.

.

.

Interested In Finding Out More?

If you’d like more information on the AVAA Professional Standards, send an email to standards@avaa.com.au or telephone 1300 928 165.  You can also stay up to date by following AVAA on LinkedIn, X/Twitter and Facebook.
.