I agree Danny. Several yafs ago I was asked to value a real estate office, it's assets which included current listings, pending contracts, as well as business owned furniture & other equi[ment. As a former District Director for a Real Esaate Franchise, and management consultant fpr that franchise, I felt well qualified. It was refreshing when it sold for about what I had appraised it for but in stages.
Yes, I deal with MLS information - and that is definitely an asset - in this case we are dealing with the valuation of information, which as part of the valuation of the business itself, is tied to financial accounting as a (business) intangible asset. This has always been covered by USPAP (although you need to get into the practice of business valuation to determine the accepted methods). However verification and valuation of information that is not directly tied to business valuation is not covered by USPAP, at least with respect to enforcing honesty, ethics and so on. By expanding USPAP a bit, you now have more work for appraisers- and are fulfilling an economic and/or social need.
So for example, can you trust the news? If FoxNews or CNN were able to state that certain statements had been certified by some appraiser to be "not likely true", "possible true", "likely true" or say 70% probably true, then the public should be able to have some trust that the news they are given (and which the most likely are not in a position to verify) has or doesn't have a certain degree of truth. Our democracy simply cannot function very efficiently on false news. ...
Likewise, if a company has to make a decision about how much money to invest in adding more security to it's information databases (possibly MLS data), then it would help if it could have an appraiser assess the value of damages should it be compromised. We now have cases of certain companies swiping data from MLS databases and essentially reselling it on the market. If they are to be taken to court, then what evidence of economic damage can be supported? Now you would think that this latter case could be handled by USPAP as business valuation - but what if the loss of information affected not only the business, but the identity and financial security of the public? Certainly public damage affects the reputation of the company responsible for its security and that could be reflect in a lower valuation of the companies future income stream, but one has to consider whether that properly reflects the impact on the public of having to deal with the multitude of problems that can come from loss of identity related information. So, an attorney takes on a class action lawsuit and needs to present a damage estimate on behalf of his public clients. He needs an appraisal. --- Oh --- you see --- USPAP/Business Valuation doesn't quite make the grade - because it is too focused on issues related solely to business valuation.
Another related issue is licensing. Licensing is not required for valuation of businesses or personal assets - probably because if a client wants a license, he just gets a CPA with a designation in business valuation.
I think licensing is absolutely needed for news verification and valuation (as degree of truthfulness). However, as soon as you support licensing, then you have to support enforcement. That would be an added burden to state enforcement. This is a case where USPAP would have to bend a bit. - Yet, the issue is not just for news, but anything clients would want to certify as fact. I can imagine many cases. For example, sales brochures, where tech companies might want to certify certain statements supporting the value of their product or predictions. They might get an accounting firm to certify a report - but I wonder what that is really mean, if anything at all. GAAP has to struggle with financials, dealing with complex new transaction structures, revenue streams and such. I don't believe that CPA's and GAAP have much to do with anything except financial accounting. Correct me if I am wrong.
Generally speaking, valuation of information as an intangible asset, is probably not much different with respect to enforcement than business valuation. I suspect the reason that licensing is not required for business or personal valuation, it that enforcement would be too difficult to make it economically worthwhile - or was so at one time in the past. But there are too many designations; and, people question whether they mean that much, as a CPA license is really required. So, if you want someone to sign their life to a business valuation, you get a CPA with a designation in Business Valuation. Enforcement is handled then by the state CPA organization (whatever that is). Standards 9 and 10 overlap with CPA licensing and GAAP.
Perhaps licensing should be reconsidered for business (and possibly personal valuation) for at least two reasons (1) The methods for business and personal valuation have been worked out pretty well over the past couple of decades and (2) The multitude of designations for business valuation have questionable meaningfulness (what are they really worth without a CPA license??). But, it seems it would likely be a duplication of effort, i.e. for the CPA the end result is the financial statement, for business valuation, financial statements are not an end in themselves, rather only a means to getting an opinion of value for some particular business.
In the end, then, I would suggest avoiding the messy problems associated with Business Valuation (also involving GAAP and CPA licensing), and consider separate licensing for Information Valuation - for all information valuation issues that lie outside of business valuation.
. STANDARDS 9 and 10 are often referred to as the business valuation standards, but they are actually the standards for appraisal of any type of intangible asset. What more is it that you are seeking?
