With the revised Valuation Practice Standards coming into effect on January 1, 2026, Members face more explicit expectations for what must be disclosed in every Valuation Report. Under Practice Standard No. 110 (PS 110) – Report Disclosure Standards, transparency is central: users must be able to clearly see how the conclusion was reached, who prepared it, what information was relied on, and what assumptions were made. The extent of disclosure varies depending on intended use and users, subject to the disclosure categories in PS 110, and must be “fit-for-purpose”. Valuation Reports are no longer distinguished by the type of content they include, and Calculation Valuation Reports must also disclose appropriate industry and economic considerations.
What’s New
1. Name the Valuator, Own Professional Judgment
• Reports must always identify both the Valuator and the firm responsible for issuing it.
• Reports must adequately explain professional judgments made.
2. Significant Inputs and Assumptions
• Reports must disclose the significant inputs and identify their source or explain how they were developed.
• Reports must disclose the significant assumptions, along with the basis for making for each assumption.
• Members are encouraged to present what they consider to be the significant inputs and assumptions in a standalone section of the report for greater transparency to users. Examples of significant inputs and assumptions are provided in the standard.
3. Industry and Economic Factors
• All reports must include the relevant industry and economic factors affecting the conclusion. The focus is on making the link for readers on how the valued entity “fits in” to its industry and the broader economic situation at the valuation date. The intent is for the report to explain why certain information is relevant, rather than to artificially lengthen valuation reports with irrelevant information.
• This requirement applies to all levels of conclusions — Calculation, Estimate, and Comprehensive.
• The extent of disclosures is expected to vary amongst levels to match the depth of work performed.
4. Scope Limitations
• If there are any scope limitations, the report must contain a scope limitations section, identifying and explaining each limitation and its possible impacts on the conclusion.
• Some scope limitations are highly significant. If scope limitations are significant enough to jeopardize credibility, no conclusion should be issued. Upholding the credibility of valuations in the public interest is a main objective of CBV Institute.
Why the Changes are Important
• Credibility: Identifying the Valuator by name, along with their firm, increases accountability.
• Transparency: Requiring discussion of relevant (not boilerplate) industry and economic factors in every valuation report ensures users can see how broader market conditions were considered in reaching the conclusion.
• User understanding: Intended users — whether clients, courts, or regulators — gain a clearer view of how conclusions were reached and what limitations exist.
Action for Members
• Enhance report disclosures: Update reports to include required disclosures, e.g. the Valuator’s name, the professional judgment statement, consideration of industry/economic factors for all levels of reports, dedicated sections for significant inputs and significant assumptions, and more (this is not a comprehensive list).
• Exercise professional judgment: Determine which inputs and assumptions are “significant” in the context of the engagement, considering their potential impact on user decisions.
• Strengthen practices: Ensure every report is appropriately tailored. Pause and consider the severity of any scope limitations, as they arise, and consult with appropriate Institute staff as needed to determine if certain scope limitations may prevent issuing a valuation conclusion.
Further resources:
- The new Practice Standard No. 110, effective January 1, 2026
- Link to the first article in this series about PS 100 – Countdown to 2026: PS 100 – The New Foundation)
- 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.