Businesses, government agencies, legal practitioners, insurers, accountants and consumers have been cautioned about the use of substandard valuation reports being presented as competent valuations by valuers claiming to be professionals.  The good news is that certified valuers rely on recognised professional standards to prepare high-quality valuation reports.

While many valuation professionals undertake their work diligently and competently, the Auctioneers and Valuers Association of Australia (AVAA) is aware of valuation reports that demonstrate a poor understanding of valuation methodology, insufficient research, inadequate analysis, and a failure to properly identify the purpose and basis of valuation. In some cases, reports appear to have been prepared using generic templates with little regard to the specific requirements of the assignment and the needs of the client.

A valuation report is a technically complex document that must demonstrate how the valuer arrived at their conclusion, what assumptions were adopted, what evidence was considered, and why a particular methodology was selected. Different valuation purposes often require different approaches. A valuation prepared for insurance replacement purposes may differ substantially from a valuation prepared for family law proceedings, deceased estates, commercial litigation, financial reporting, capital gains tax, insolvency, compensation matters, or asset disposal.

One of the most concerning issues encountered by experienced practitioners is the growing number of reports prepared by individuals who appear unfamiliar with the distinction between valuation methodologies and valuation bases. Market value, insurance replacement value, forced sale value and the valuation used in civil litigation are not interchangeable concepts. Similarly, the approaches used in a family law dispute may be inappropriate in an insurance claim, while a methodology suitable for litigation purposes may be entirely unsuitable for financial reporting. These are important technical distinctions as they can materially affect the outcome of a valuation and, in some circumstances, expose clients to significant financial or legal risk.

AVAA strongly encourages clients to engage an AVAA Certified Valuer (CVAu). The respected CVAu credential identifies valuers who have demonstrated professional competence, practical experience, appropriate insurance coverage, and a commitment to ongoing professional development. Those with the CVAu credential are expected to prepare reports in accordance with AVAA Professional Standard 6 – Minimum Valuation Report Requirements, which establishes a nationally consistent framework for valuation reporting and professional accountability.

The recognised AVAA Professional Standard 6 requires valuation reports to clearly identify the client, purpose of valuation, valuation date, asset details, valuation basis, assumptions, methodology, compliance declarations, professional credentials and valuation conclusions. It also requires disclosure of matters such as conflicts of interest, inspection status, professional assistance and material use of artificial intelligence in report preparation. These requirements help ensure that valuation reports are transparent, defensible and capable of scrutiny by courts, regulators, insurers, government agencies and other stakeholders.

For consumers and businesses seeking valuation services, the message is straightforward. Before commissioning a valuation, ask whether the valuer holds the respected AVAA Certified Valuer (CVAu) credential and whether the report will be prepared in accordance with AVAA Professional Standard 6. The quality of the valuation report often becomes most important when it is challenged, relied upon in legal proceedings, or used to support significant financial decisions.

Many valuers who do not currently hold the respected CVAu credential find that the growing emphasis on professional certification and the use recognition of the AVAA Professional Standards presents an opportunity. As government agencies, courts, insurers and private clients increasingly seek evidence of professional competency and reporting standards, the CVAu credential provides a recognised pathway to demonstrate expertise, professionalism and commitment to best practice within the valuation profession.

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Interested In Finding Out More?

If you’re interested in 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.
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