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‘RICS’ Red Book Update – 2017

The RICS has recently launched a public consultation for the new global edition of the RICS “Red Book” which will reflect a number of changes, bringing it in line with the International Valuation Standards (IVS).

The update for the Red Book will also reflect recent progress in the development of international standards for ethics and for measurement and will be known as ‘RICS Valuation – Global Standards 2017’.

In aligning the new Red Book to IVS 2017, it offers the opportunity to improve the format and update the technical content, such as to ensure it includes the latest guidance on conflicts of interest.

The main changes reflected in the new global edition of the Red Book are as follows:

In terms of technical content, much of the existing text within the 2014 edition of the Red Book is thought to be contained in the new edition. However, there are a few amendments that RICS valuation professionals will want to note:

  • Reference to “oral” valuations has been added in PS 1 1.4 – as these feature in a number of national standards, it is helpful to acknowledge both their use and their limitations
  • PS 1 incorporates the additional descriptive material on exceptions first published outside the Red Book in Question and Answer form on the RICS website in 2016
  • A new, very short PS 3 clarifies how the valuation practice guidance – applications (VPGAs) should be viewed
  • VPS 1 and VPS 3 have an additional heading regarding limitations on liability that may be agreed
  • VPS 2 has been modified to highlight the key principles and it also now includes material on “valuation records”, to reflect the new requirements of IVS 2017
  • VPS 3 now recognises that the “natural” order of headings when reporting may differ from that implied by Red Book B 2014, though it is deliberately not prescriptive
  • A new, short VPS 5 on valuation approaches/methods is included, to link with the new IVS 105
  • The text from the existing VPGA 8 (portfolios and collections) has been moved into VPS 1 and 3
  • The text of the existing VPGA 9 (valuation certainty/uncertainty) has been moved into to VPS 3
  • A new VPGA 8 has been created from the real estate inspection checklist material previously included in VPS 2, the latter now more obviously of general application across all forms of asset

What changes in its format:

  • To improve readability and better reflect alignment to IVS 2017, the following changes have been made the to 2014 edition format. Notable formatting changes include:
  • The latest RICS conventions for standards and guidance material have been adopted throughout such as the term ‘RICS Professional Statement’ replaces ‘RICS Professional Standard’
  • The use of summary “text boxes” at the start of each Red Book section make explicit how the IVS are reflected in and implemented through the RICS material
  • Throughout the VPSs, the key principles are highlighted by the use of bold type, with supporting material on implementation in ordinary type
  • The running order of the material in PS 2 has been changed to make the flow more logical

As valuation professional’s, our insight, expertise and practical knowledge is crucial in shaping the new RICS Valuation – Global Standards 2017, with the key aim of striving to continue to deliver credible, transparent and high-quality valuations.

[team-member name=”David Cooper”]

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