Estate surveyors hold talks with AGF, demand reform in asset valuation
A surprise windfall, which could provide valuation jobs for estate surveyors, may be underway in the next few months, if the federal authorities adopt and implement a radical plan proposed under the International Public Sector Accounting Standards (IPSAS) for all Ministry, Departments and Agencies (MDAs).
The proposal presented in a meeting between Nigerian Institution of Estate Surveyors and Valuers president, Dr. Bolarinde Patunola- Ajayi and Accountant General of the Federation (AGF), Mr. Ahmed Idris, became necessary to fulfill the Estate Surveyors and Valuers’ Registration Board of Nigeria Act, Cap E13 LFN 2007, which criminalises any valuation done by non-valuers.
IPSAS are a set of accounting standards issued by the Board for use by public sector entities around the world in the preparation of financial statements. These standards are based on International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).
It aims to improve the quality of general purpose financial reporting by public sector entities, leading to better informed assessments of the resource allocation decisions made by governments, thereby increasing transparency and accountability.
In Nigeria, IPASA was endorsed by the Federal Executive Council (FEC) for public sector accounting while IFRS was adopted for private sector accounting reporting as far back as 2010. Since then, AGF office has been playing a leading and co-ordinating role for effective implementation by all levels of governance in the country.
Specifically, in the meeting the Patunola-Ajayi faulted in the non-inclusion of estate surveyors in the MDAs-IPSAS Implementation Committee. “As important and as critical as the competence of our professional members is, the committee did not factor the valuer’s competence either as an in-house member or as out-sourced input.”
“The terms of reference of the MDA-IPSAS committee included: to identify and document all assets and liabilities of the MDA grouped as follows: investment property; property, plant and equipment; biological assets and agricultural produce; intangible assets among others,” he said.
The six requests made by the institution at the meeting are as follows: inclusion of qualified estate surveyor and valuer in all the MDA’s IPSAS committees at all levels; engagement of registered estate firms in the valuation and preparation of public sector asset register and adoption of the reviewed attached sample of fair valuation template/schedule.
Other demands include issuance of a directive to all MDAs to the effect that asset registration and valuation should be captured in the 2018 Budget for those which have not valued their assets for IPSAS compliance; implementation of immediate establishment of Directorate of Valuation in the Financial Reporting Council of Nigeria (FRCN) as well as establishment of asset management department in each MDA, to be headed by a qualified estate surveyor and valuer.
Patunola-Ajayi also observed that the Minister of Finance, directive for the creation of Central and Unified National Asset Data Base, an asset tracking management project for all federally owned asset, cannot be successfully achieved without the professional input of the estate surveyor and valuer, if best practice is desired.
“This is because no asset register will be complete without the value competence which estate surveyors and valuers are the only authorized Professional Body to determine value of assets.
NIESV president noted that the asset registers templates did not conform to the requirements of the IFRS and IVSC performance standards. “The convergence of IFRS, IVS and IPSAS (all International financial/valuation reporting standards) on annual accounting reporting, which are two models of fair value and depreciated cost model. These two concepts are not new to us.
“While Fair Value is critical to assessing the real performance of the asset and to providing meaningful key performance indicators (KPIs) about important matters such as sustainability and asset management performance; depreciated cost involves depreciation in the improvement from the cost of the new asset as of the effective appraisal date, which may not always be based on the traditional reducing balance or straight line methods.”