With the revised Valuation Practice Standards coming into effect on January 1, 2026, a central update in Practice Standard No. 110 (PS 110) – Report Disclosure Standards is the principle that valuation reports must be tailored to the engagement, with content and level of detail appropriate to the report’s purpose and the needs of the intended users. This principle underpins the broader disclosure requirements, ensuring that every report communicates clearly how the conclusion was reached and on what basis.

What’s New 

1. Fit-for-Purpose 

• PS 110 is built around the foundational principle that the content and level of detail of the report must be appropriate for the specific engagement, given the report’s purpose and the needs of the intended users.  

• The new PS 110 requires the following in any valuation report: the scope of the work performed, the information relied upon, professional judgments made, significant inputs and assumptions and the basis for conclusions reached. 

2. Report Limitations – Estimates and Calculations 

• Reports providing an Estimate Valuation Conclusion or a Calculation Valuation Conclusion must notify users of their (inherent) report limitations. 

3. Draft Reports 

• The four draft report conditions must be disclosed on every draft report. 

• The four conditions are not new, only the requirement to explicitly disclose them to users. 

Why the Changes are Important 

• Fit-for-purpose reporting: Reports that are tailored to their purpose and audience tell the “valuation story” more effectively and are easier for intended users to understand.  

• Clarity on limitations: Standardized disclosure for Estimate and Calculation reports helps users appreciate limits to the scope of work performed. 

• Transparency in drafts: Explicitly disclosing the four conditions for draft reports makes it clear that they are incomplete work products, reducing the risk of improper reliance. 

Action for Members 

• Enhance report disclosure: Update reports to include the mandatory report limitations for Estimate and Calculation conclusions, and the four draft disclaimers on draft reports. 

• Exercise professional judgment: Consider whether a Calculation or Estimate report is suitable for the intended users, in the context of the engagement.  

• Strengthen practices: Implement internal review processes to ensure disclosures are tailored to each engagement, avoiding boilerplate language that could weaken transparency. 

Further resources: 

• The new Practice Standard No. 110, effective January 1, 2026  

• PS 110 Red line 2009 to 2026 

• Link to the first article in this series about PS 100 (working title: Countdown to 2026: PS 100 – The New Foundation) 

• Link to the 2^nd article in this series about PS 110 (working title: Countdown to 2026: Strengthening Report Disclosures (Part 1) 
• A free on-demand webinar on the Valuation Practice Standards will be available in early December, stay tuned to CBV Matters

This article highlights key elements of PS 110, but it is not a substitute for the standard itself. As Members, you are responsible for reading the new Practice Standards in full and ensuring you understand their requirements. All references to Members in this article apply equally to Registered Students of CBV Institute.