Promulgation of Circular 30 on 04 Vietnamese Valuation Standards effective from July 1, 2024
Promulgation of Circular 30 on 04 Vietnamese Valuation Standards from July 1, 2024?
On May 16, 2024, the Minister of Finance issued Circular 30/2024/TT-BTC on Vietnamese valuation standards concerning the professional ethics of valuation, the scope of valuation work, the basis of valuation, and valuation documentation.
Specifically, Article 1 of Circular 30/2024/TT-BTC promulgates 04 Vietnamese valuation standards as follows:
- Vietnamese Valuation Standard on Professional Ethics of Valuation;
- Vietnamese Valuation Standard on Scope of Valuation Work;
- Vietnamese Valuation Standard on Basis of Valuation;
- Vietnamese Valuation Standard on Valuation Documentation.
Promulgation of Circular 30 on 04 Vietnamese Valuation Standards from July 1, 2024? (Image from the Internet)
What are the basic requirements of professional ethics in valuation?
Based on Subsection 3, Section 2 of Vietnamese Valuation Standard No.01 (referred to as Standard No.01) issued with Circular 158/2014/TT-BTC, the professional ethics in valuation include the following basic requirements:
- Independence;- Integrity;- Objectivity;- Confidentiality;- Transparency;- Professional competence and due care;- Professional demeanor;- Compliance with professional standards.
Specifically:
[1] Independence
- Independence is a fundamental principle for valuation enterprises and appraisers.- During the valuation process, appraisers and valuation enterprises must ensure independence in professional activities, not being influenced or affected by any material or moral benefits that could compromise the honesty and objectivity of the valuation activity and results.- Appraisers and valuation enterprises must not undertake valuation in prohibited cases as stipulated in the Price Law 2023 and its guiding documents. If independence is compromised during the valuation process, appraisers and valuation enterprises must find ways to address this limitation. If unresolved, they must explicitly state this limitation in the valuation report or decline to conduct the valuation.- When reviewing the valuation report by another appraiser, the appraiser must independently and objectively assess whether they agree or disagree with part or the entire contents of the report.
[2] Integrity
- Appraisers must be honest, straightforward, and maintain a clear stance when conducting valuations.- Appraisers must be truthful about their qualifications, experience, and professional capabilities; ensure that they and their assistants and subordinates strictly adhere to legal regulations on valuation and the Vietnamese Valuation Standards system during the valuation process.- Appraisers must decline to conduct valuations if they find they are not adequately qualified or if they are influenced by constraints that could distort the valuation results.
[3] Objectivity
- Appraisers must be fair, respect the truth, and avoid bias or favoritism in collecting and using documents to analyze impacting factors during the valuation.- Appraisers and valuation enterprises must not conduct valuation work if the opinions, conclusions, and valuation results were pre-determined intentionally.- Appraisers and valuation enterprises must verify information and data provided by clients to confirm its appropriateness. If verification is limited, the appraiser must state this limitation in the valuation report and valuation certificate.- Appraisers and valuation enterprises must not conduct valuations based on hypothetical conditions without rigorous, practical, and appropriate arguments.
[4] Confidentiality
- Appraisers and valuation enterprises must not disclose information about valuation records, clients, and assets without the client’s consent or unless permitted by law. This includes non-public information provided by clients or collected by valuation enterprises during the valuation process.- Appraisers and valuation enterprises must ensure that other individuals involved in the valuation process and storage of valuation records also respect the principle of confidentiality.
[5] Transparency
- All documents reflecting the legal and technical characteristics of assets and valuation results must be comprehensively, clearly presented in the valuation report.- The valuation report must specify the binding conditions, scope of work, limitations, and assumptions of the appraiser.- Appraisers and valuation enterprises must transparently disclose the limiting conditions and their remedies as agreed with the client in the valuation report.- Valuation service fees must be agreed upon between the valuation enterprise and the client based on the provisions in the Price Law 2023 and its guiding documents, and must be specified in the valuation contract. In the case of bidding for valuation services, it must comply with the legal provisions on bidding for consulting service packages.
[6] Professional Competence and Due Care
- Appraisers must conduct valuations with the necessary professional competence, diligence, and careful consideration of all collected data before proposing formal opinions to the General Director or Director of the valuation enterprise.- Appraisers must continuously improve their knowledge, professional skills, and practical experience. Annually, appraisers are obligated to participate in professional knowledge enhancement programs for valuation organized by authorized institutions.- The valuation enterprise must encourage, arrange, and facilitate appraisers to participate in professional training, and apply technical advancements to meet valuation work requirements, ensuring the best valuation service provision for clients.- The valuation enterprise must implement measures to ensure its professionals receive appropriate training, education, and supervision.- The valuation enterprise is responsible for purchasing professional liability insurance for valuation activities or setting aside a reserve fund for professional risk in valuation.
[7] Professional Demeanor
- Valuation enterprises and appraisers must cultivate and maintain professional reputation, avoiding actions that undermine the professional standing of valuation, such as client solicitation through obstruction, threats, collusion, and other unfair competition practices.- Valuation enterprises and appraisers have the right to join professional organizations in Vietnam and abroad according to legal provisions.
[8] Compliance with Professional Standards
- Appraisers and valuation enterprises must conduct valuations according to the specified techniques and professional standards in the Vietnamese Valuation Standards system and other relevant legal provisions.- Appraisers and valuation enterprises have the right to hire qualified consulting organizations and individuals to provide consultations and make professional conclusions supporting valuation activities.
Prohibited acts for valuation enterprises in valuation activities
According to Clause 3, Article 7 of the Price Law 2023, the following prohibited acts apply to the pricing and valuation field:
Prohibited acts in the field of pricing and valuation...3. For valuation enterprises:a) Unfair competition practices according to the laws on competition; inaccurate information about the qualifications, experience, and service capabilities of appraisers and valuation enterprises;...
Consequently, valuation enterprises are prohibited from the following acts in valuation activities:
- Unfair competition practices according to the laws on competition;- Providing inaccurate information about the qualifications, experience, and service capabilities of appraisers and valuation enterprises;- Providing valuation services to related parties as stipulated by corporate law;- Incorrect, dishonest, or falsified registration dossiers for the issuance or reissuance of certificates of eligibility for valuation services, and appraiser registration dossiers;- Issuing sham valuation certificates;- Bribery, collusion, and agreements to manipulate the value of goods, services, or valuation assets for personal gain or profiteering;- Collusion on prices and valuation.
