Financial Reporting Valuations under IFRS 

Why Independent Valuations Matter in Financial Reporting

Introduction

Financial reporting is more than preparing annual accounts—it is about presenting a true and fair view of an organisation's financial position. International Financial Reporting Standards (IFRS) require certain assets and liabilities to be measured at fair value or assessed for impairment, making professional valuation an important part of financial reporting.

An independent valuation provides reliable, objective and evidence-based information that supports accurate financial statements and enhances stakeholder confidence.

What is a Financial Reporting Valuation?

A financial reporting valuation is an independent assessment of the value of an asset or liability for the purpose of preparing financial statements in accordance with International Financial Reporting Standards (IFRS).

These valuations help organisations comply with accounting standards while ensuring that reported asset values reflect current economic conditions.

Why are Financial Reporting Valuations Important?

Professional valuations support:

• Compliance with IFRS requirements

• Accurate financial reporting

• Reliable asset values

• Transparent financial statements

• Better corporate governance

• Improved investor confidence

• Informed management decisions

Independent valuations also provide assurance to auditors, lenders, shareholders and regulators that asset values have been determined using recognised valuation methodologies.

When is a Financial Reporting Valuation Required?

An organisation may require a valuation when:

Preparing Annual Financial Statements

Assets measured at fair value should reflect current market conditions at the reporting date.

Property Revaluation

Businesses may revalue land and buildings to reflect their current fair value.

Acquisition of a Business

When one business acquires another, certain assets and liabilities may require valuation for accounting purposes.

Impairment Testing

Where there is evidence that an asset may have declined in value, an independent valuation may assist in determining its recoverable amount.

Disposal of Assets

Valuations may be required before disposal to support accounting treatment and financial reporting.

Common IFRS Valuation Assignments

IKON Valuation Services supports organisations undertaking valuations for:

• Land and Buildings

• Investment Property

• Owner-Occupied Property

• Plant & Machinery

• Infrastructure Assets

• Motor Vehicles

• Specialised Properties

• Property Portfolios

Typical Organisations That Require Financial Reporting Valuations

Our financial reporting valuation services are suitable for:

• Private Companies

• Public Companies

• Financial Institutions

• Insurance Companies

• Manufacturing Companies

• Real Estate Developers

• Educational Institutions

• Hospitals

• Hotels

• Religious Organisations

• Government Agencies

• Non-Governmental Organisations (NGOs)

Our Valuation Process

To ensure accuracy and compliance, every assignment follows a structured process.

1. Understand the Reporting Requirement

We discuss the purpose of the valuation, reporting framework and assets to be valued.

2. Property Inspection

Our professionals inspect the assets to understand their physical characteristics and condition.

3. Market Research

Relevant market evidence, cost information and industry data are analysed.

4. Valuation Analysis

Appropriate valuation approaches and methodologies are applied based on the asset type and reporting requirements.

5. Quality Assurance

Every report undergoes technical review before issue.

6. Report Delivery

A comprehensive valuation report is prepared for use in financial reporting.

Why Engage an Independent Valuer?

Independent valuation provides:

✓ Objective and unbiased opinions

✓ Evidence-based valuation conclusions

✓ Professional credibility

✓ Compliance with recognised valuation standards

✓ Reliable support for auditors and management

✓ Confidence for investors and other stakeholders

Professional Standards

IKON Valuation Services prepares financial reporting valuations in accordance with internationally recognised professional standards, including:

• International Valuation Standards (IVS 2025)

• International Financial Reporting Standards (IFRS)

• RICS Global Standards

• Applicable professional and regulatory requirements

Frequently Asked Questions

Does every business require a financial reporting valuation?

Not necessarily. The requirement depends on the nature of the organisation, the accounting policies adopted and the applicable IFRS requirements.

Who relies on financial reporting valuations?

Financial reporting valuations are commonly relied upon by:

• Management

• Auditors

• Shareholders

• Investors

• Financial Institutions

• Regulators

How often should financial reporting valuations be updated?

Many organisations obtain updated valuations periodically, particularly where assets are measured at fair value or where significant market changes have occurred.

Can a valuation prepared for lending also be used for financial reporting?

Generally, no. The basis of value, assumptions and reporting requirements differ depending on the purpose of the valuation. A valuation prepared for financial reporting should specifically address the applicable accounting requirements.

Key Takeaways

✓ Independent valuations support reliable financial reporting.

✓ Professional valuations promote compliance with IFRS requirements.

✓ Objective asset values improve transparency and stakeholder confidence.

✓ Financial reporting valuations should be undertaken by qualified valuation professionals.

✓ Early engagement with a valuer helps streamline the financial reporting process.

Need a Financial Reporting Valuation?

Whether your organisation is preparing annual financial statements, revaluing assets or meeting audit requirements, IKON Valuation Services provides professional, independent and standards-compliant valuation services.

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