European Business Valuation Standards: Unlocking Career Opportunities for Real Estate Valuers

1. European Business Valuation Standards Underpinning New CareerOpportunities for Real Estate Valuers Valuation conference, Sofia, 11th October 2019 Danijela Ilic REV, FRICS President NAVS Board Member TEGoVA Chair of EBVSC

2. European Valuation Standards Publishing valuation standards since the late 1970s TEGoVA has achieved great success and pan European recognition in valuation profession Clear focus on real estate, 71 professional bodies from 37 countries

3. Why European Business Valuation Standards? to meet the diverse needs of the 71 TEGoVA Member Associations (TMA’s) to support increased interest amongst European real estate valuers in diversifying their services to include business valuations to provide fundamentals of best practice in business valuation, with a quality that can be relied upon as a common benchmark by investors, the financial industry and valuers throughout the EU.

4. EBVS European Business Valuation Standards (EBVS) will be a stand-alone publication, not part of the Blue Book (EVS). Prepared by highly skilled professionals in business valuation, members of EBVSC Drafted EBVS provides four standards, three guidance notes, a valuer’s code of conduct and a unique text on European Union legislation and business valuation

5. Business Valuation & Business Valuers need to have common platform throughout Europe for: definitions of terms and phrases that are underlying business valuations procedural steps to define terms of engagement as a basis for the valuation basis of value valuation approaches code of valuer’s conduct preparation of the valuation Report qualification of business valuer

6. Opportunities for Real Estate Valuers The practice attracts professionals from many different backgrounds Real estate valuers may have an advantage and better perspective compared to practitioners from other backgrounds: Valuation of businesses where real estate is part of going concern (hotels, gas stations, cinemas, golf courses where the property value reflects the trading potential for that business) A real estate valuer who is also trained in business valuation is best fitted to assess the difference between valuation of the hotel as an asset and valuation of the ownership interest in the hotel business.

7. Opportunities for Real Estate Valuers RE valuers can easily transfer their skill set* into business valuation if they: Acquire the necessary knowledge in basic accountancy and financial analysis of a company’s financial statements Understand the different types of normalization adjustments and forecasting financial statements Become aware of the financial data sources available to business valuation Start gaining experience by assisting seasoned business valuation experts

8. Skill set* Practice valuation under relevant valuation standards (and/or regulation) and valuer’s code of conduct Understand valuation principles and theory; interest to be valued; different bases of value and their relation to the purpose of valuation; terms of engagement; documents needed for valuation; valuation assumptions and special assumptions; premises of 3 valuation approaches and valuation methodologies; Analytical skill to select and interpret market data and application of professional judgement Preparation of valuation report and communication of the result to the client Valuer’s limitations, liabilities and disclosures

9. Scopes Impairment testing Business purchase price allocation Tax related assignments Opportunities multiply as they are seized Real estate asset intensive businesses

10. Thank You! www.tegova.org