In a move to establish a standardized framework for valuation practices in Nigeria, the Financial Reporting Council (FRC) has assembled a team of top professionals to develop comprehensive valuation regulations, according to Ugochukwu Nwora, Head of the Directorate of Valuation Standards.
He disclosed this during the Nigerian Institution of Estate Surveyors and Valuers, Valuation Day themed “Importance of Assets Valuation in Financial Stability”, held recently in Lagos.
He said, “This is following the directive of the Executive Secretary, Dr Rabiu Olowo, that the documents should be out latest July 31, 2024.
“This regulation will be the first of its kind in Nigeria and the council will showcase the exposure draft to the public before launching it in July and the valuation regulations will guide all professional valuers and firms in Nigeria. We encourage professional valuers and firms to commence registration with FRC, especially for those that have not registered.”
Nwora noted that the FRC would standardise and regulate submissions, ensuring consistency and adherence to asset valuation standards.
He added, “We observe that everybody is just turning in reports and there is no standardisation. Hence, ours is to ensure that there is a reporting council that regulates every work being done and meets the asset valuation standard.
“We intend to get every valuation professional registered, and once this is done, we will not bring down the entire firm if there is any breach. We would identify the person who contravened and take away the FRC number of such a profession, meaning that such a person cannot practice anywhere in Nigeria.
“The FRC valuation regulation should be out before the end of July, and we should be inaugurating it next week. In addition, we are also informing various stakeholders in this regard, so that once the regulation is out, we would roll out the draft so that people can critically look at it.”
The Chairman of the Nigerian Institution of Estate Surveyors and Valuers, Lagos Chapter, Gbenga Ismail, said the occasion was an advocacy and awareness campaign on the importance of valuation, asset management and utilisation.
He added that the institution intended to get the government to recognise the importance of the process and make it a regular occurrence yearly.
Ismail said valuation was the critical reason the institute was advocating to the public and private sector, adding that the accuracy of projections needed endorsement, and validation, and a proper valuation report was the only process that certifies all assumptions.
He remarked, “Valuation refers to the process of determining the worth of a company, asset, investment, or any financial instrument. It is crucial because it helps investors, businesses, and analysts understand the fair value of an asset, which in turn aids in decision-making regarding investments, mergers, acquisitions, and financial strategies. Effective valuation ensures that investments are made at the right price and helps stakeholders assess risk and potential returns accurately.
“Valuation is an everyday term and it is so easy to misplace its intention, recently at our conference. it was referred to as a nice to have.”
Meanwhile, the Honorary Publicity Secretary of NSEIV, Lagos Branch, Abidemi Ojo, said there had been a disparity in the valuation reported over time.
