The Asset Valuation Standards serve as the behavioral guidelines for valuation agencies and professional valuers when conducting asset valuation services. They represent an important benchmark for regulatory authorities to assess the quality of asset valuation work and provide a crucial basis for users of valuation reports to understand the conclusions reached. The “Asset Valuation Law” 9 The document refers to the Asset Valuation Standards, elevating their status and introducing new requirements for these standards. To implement the "Asset Valuation Law," fulfill the responsibilities entrusted by law, and promote lawful practice within the asset valuation industry, the China Association of Asset Appraisers (hereinafter referred to as CAAA), under the organization and guidance of the Ministry of Finance, has comprehensively revised the existing Asset Valuation Standards based on the newly promulgated "Basic Standards for Asset Valuation." As a result, the Asset Valuation Standards now reflect characteristics that keep pace with the times, and their content and structure have been further refined and improved.

I. Background of the Revision of Asset Valuation Standards

10 Over the years, thanks to the joint efforts of both insiders and outsiders in the industry, China has achieved remarkable progress in developing its asset valuation standards. A relatively comprehensive system of standards has now been established, covering major practice areas in asset valuation, tailored to China’s national conditions, and increasingly aligned with international norms. These standards have played a crucial role in regulating professional conduct, promoting industry development, and enhancing the industry’s credibility. At present, the environment for implementing asset valuation standards is undergoing significant changes in legal, regulatory, and practical aspects. In response, the China Association of Asset Appraisers has launched a revision process for these standards.

(1) Requirements of the “Asset Valuation Law”

The “Asset Valuation Law” stipulates that valuation agencies and their professional valuers shall comply with valuation standards when conducting business activities. The administrative departments under the State Council are responsible for formulating basic valuation standards, while industry associations, based on these basic standards, shall develop practice guidelines and codes of professional ethics for valuation. Valuation agencies and professional valuers who violate valuation standards shall bear corresponding legal responsibilities. At the same time, the “Asset Valuation Law” also lays down specific provisions regarding the contents of valuation methods and valuation procedures. Valuation standards must be aligned with the “Asset Valuation Law.”

(2) Requirements for Assessment Practice

As a professional services industry, the asset valuation sector must win the market—and earn respect—through professionalism. Asset valuation standards serve as an important foundation. As the comprehensive deepening of reform continues to advance, the market-oriented nature of asset valuation services has become even more pronounced, the scope of the asset valuation market has expanded further, and the types of assets covered have increased significantly. This market-driven development places ever-higher demands on the professionalism of asset valuation standards, necessitating timely updates and improvements. Moreover, after years of practical application, certain aspects of the asset valuation standards have gradually revealed their inadequacy in keeping pace with the evolving landscape of asset valuation, thus requiring prompt updates and refinements.

(3) Requirements for Strengthening Regulation

Measures for the Financial Supervision and Administration of the Asset Valuation Industry (Ministry of Finance) 86 The regulations stipulate that the financial authorities, in accordance with laws and administrative regulations and guided by asset valuation standards, shall conduct inspections of professional services involving the valuation of individual assets, asset portfolios, enterprise value, financial interests, asset losses, or other economic interests, and the issuance of asset valuation reports. In an environment characterized by increased regulatory intensity and shifting regulatory approaches, asset valuation standards need to refine their provisions for key regulatory areas—including asset valuation reports, asset valuation procedures, and asset valuation archives—thereby enhancing the practicality and operability of these standards.

(4) Requirements for perfecting the standards system

Since 2001 From the issuance of the first asset valuation standard in the year to the subsequent release of new asset valuation standards one after another, to date... 16 Over the years, the major international valuation standards have undergone numerous revisions; however, China’s asset valuation standards have yet to undergo a comprehensive revision and integration. Since some of these standards were issued relatively early, their provisions are somewhat imperfect due to limitations in the policy and market environment as well as the level of understanding of valuation theories and techniques at the time of their issuance. Moreover, the piecemeal issuance of asset valuation standards year by year has led to overlaps and inconsistencies among different standards, and some standards lack uniformity in formatting, which hinders coordination among them. To strengthen the development of these standards, it is necessary to refine both the content of the standards themselves and the overall standard system.

II. Principles for the Revision of Asset Valuation Standards

The revision of asset valuation standards involves a wide range of areas, entails a substantial workload, requires high professional expertise, and is both complex and systematic. To ensure the quality of the revised standards, the revision process has adhered to the following principles.

(1) Protect the legitimate rights and interests of the parties involved and the public interest.

Asset valuation identifies and reveals the value of assets in socio-economic activities, providing professional advice on asset values to facilitate the realization of economic transactions. Asset valuation institutions and their qualified professionals must not only fulfill the obligations stipulated in the asset valuation engagement contracts but also conscientiously safeguard the public interest. Asset valuation standards should take as their starting point the protection of the legitimate rights and interests of all parties involved in asset valuation as well as the public interest, thereby regulating both the conduct of asset valuation practices and professional ethical behavior.

(2) Effectively align laws and regulations

The Asset Valuation Law and the Ministry of Finance 86 All directives require asset valuation agencies and their asset valuation professionals to conduct business in compliance with laws, administrative regulations, and valuation standards. The asset valuation standards should reflect the relevant requirements of both laws and regulations and those of the regulatory authorities overseeing asset valuation. Based on the “Asset Valuation Law,” and in conjunction with... 86 The regulations of the command ensure consistency and coordination in aspects such as the formulation of guiding principles, the use of professional terminology, and the presentation of content.

(3) Incorporating the latest achievements in theory and practice

The revision of asset valuation standards should place great emphasis on incorporating the latest developments in valuation theory and practice, studying and drawing upon the experiences from relevant domestic and international valuation standards and guidelines, paying close attention to current market conditions and business characteristics, exploring solutions to key and challenging issues encountered in practice, and reflecting the professional excellence of the revised asset valuation standards. During the revision process, we should retain those elements from the currently implemented standards that are consistent with industry realities and have proven effective, thereby maintaining the overall stability of the standard system and its content. At the same time, we should add and adjust content that has become necessary due to changes in the market, legal framework, and professional environment, making modifications and improvements with a view toward the holistic development of the industry.

III. The Process of Revising the Asset Valuation Standards

The revision of the guidelines is a key task undertaken by the Ministry of Finance and the China Association of Asset Appraisers to implement the Asset Valuation Law and develop supporting institutional frameworks for it. Comrade Xu Hongcai, member of the Party Leadership Group of the Ministry of Finance and Assistant Minister, attaches great importance to the role of these guidelines in standardizing asset valuation practices and supporting industry supervision. He has issued important instructions on numerous occasions, emphasizing that the revision work must be aligned with the Asset Valuation Law and coordinated with the Ministry of Finance. 86 In terms of aligning directives, it is crucial to attach great importance to the views of key regulatory authorities and industry sectors, and specific guidance has been provided regarding the positioning and content of the guidelines. The China Appraisal Society will also treat the revision of these guidelines as a priority task for the association and has convened a focused meeting on this issue. 20 Multiple on-site expert workshops were held, and discussions were also conducted via teleconferences, correspondence, and other communication methods. 100 Multiple professional seminars have led to nearly... 30 The draft revision proposal incorporates nearly... 2000 Amendment proposal.

(1) Revised technical preparation. 2014-2016 In the current year, in coordination with the Standing Committee of the National People's Congress as it reviews the Asset Valuation Law, the reform of the asset valuation professional qualification system, and the reform of the management approach for asset valuation agencies, the China Association of Asset Appraisers has collected demands for guideline revisions through various means, including issuing notices to local associations to solicit opinions, conducting field surveys, and holding symposiums. By organizing seminars involving university scholars and industry experts, the association has sorted and categorized these revision demands, thereby laying the necessary technical groundwork for the guideline revision work.

(2) Revision of Guideline Provisions. Following the promulgation of the “Asset Valuation Law,” the Ministry of Finance and the China Association of Asset Appraisers established... 7 The revision project team, building on the preliminary technical preparations, has aligned with the “Asset Valuation Law” and with... 86 Following alignment of directives, specific revision work was carried out, resulting in a draft of the guidelines that is now open for public comment.

(3) Publicly solicit comments. 2016 Year 10 The Ministry of Finance is soliciting comments on the draft revision of the Basic Standards, and the China Association of Asset Appraisers is... 26 The draft amendments to the Practice Standards and Professional Ethics Guidelines are now open for public comment from all sectors of society. The China Appraisal Society has also sent targeted letters to other competent authorities in related fields, soliciting their input. 49 various ministries and commissions, 18 Local Finance Department (Bureau), 34 The local associations responded to nearly 3,000 pieces of feedback via reply letters, emails, phone calls, and other means. The China Appraisal Society then organized a panel of experts to examine each piece of feedback individually and, based on the draft for public comments, revised and refined it to produce the draft for deliberation.

(4) Review by the Standards Committee. The draft under review has been reviewed by the Ministry of Finance’s Asset Valuation Standards Committee, the Technical Committee on Asset Valuation Standards of the China Association of Asset Appraisers, and the Advisory Committee. Based on the feedback provided by experts, the draft has been revised and refined to produce the proposed version for issuance.

Through a process involving technical preparation, revision of provisions, public solicitation of comments, and deliberation, the China Appraisal Society has engaged all relevant parties—including business regulators, industry experts, academic scholars from universities and research institutions, report users, and professional asset appraisers—in the revision of the guidelines. This process fully reflects the requirements of laws and regulations, business supervision, appraisal theory, and practical application, and has successfully concluded the guideline revision work. The newly released guidelines embody the wisdom and dedication of numerous experts and scholars, and demonstrate the attention and care that government departments, industry associations, report users, and the broader community of asset appraisal professionals have for the asset appraisal industry.

IV. Main Revisions to the Asset Valuation Standards

In accordance with the requirements of the Assessment Law and relevant laws and regulations, this revision of the guidelines has focused primarily on three aspects: the guidelines themselves, coordination among the guidelines, and the overall structure of the guideline system. Amendments have been made in areas such as guideline development principles, the use of professional terminology, and content presentation, essentially achieving comprehensive optimization—from the system and content down to the wording and formatting.

(1) Adjust the standards system

Before the revision, the guideline system consisted of 28 The set of guidelines consists of two main parts: business guidelines and professional ethics guidelines. The business guidelines are further divided into four levels: basic guidelines, specific guidelines, assessment guidelines, and guidance documents. The professional ethics guidelines are divided into two levels: basic guidelines and specific guidelines. Among these, the business guidelines total... 26 Item: Code of Professional Ethics 2 Item.

After revision, the guideline system consists of: 27 The set of guidelines consists of three parts: basic guidelines, practice guidelines, and professional ethics guidelines. Among these, the practice guidelines encompass a series of specific guidelines, assessment guidelines, and guidance documents. The Ministry of Finance formulates the basic guidelines, while the China Appraisal Society develops the practice guidelines and professional ethics guidelines based on the basic guidelines. Currently, the practice guidelines comprise... 25 Item.

(2) Adjust the standards to regulate the main body.

Before the revision, the guideline’s subject of regulation was “registered asset appraisers.” 2014 In recent years, the professional qualification system for asset appraisers has undergone reform, with the administrative licensing requirement for registered asset appraisers being abolished. The “Asset Appraisal Law” has incorporated the outcomes of this reform. In this revision, the entities subject to regulatory standards have been redefined as “asset appraisal institutions” and “asset appraisal professionals,” and their respective definitions have been clarified, comprehensively covering the requirements for both institutions and individuals. Specifically, “asset appraisal institutions” refer exclusively to appraisal institutions that have been filed with the financial authorities; for statutory appraisal services, the designated regulatory body is the “asset appraiser.”

(3) Focus on business requirements

In the course of developing the asset valuation industry, due to imperfections in the institutional framework, certain provisions of the asset valuation standards have inadvertently incorporated elements related to administrative management and other self-regulatory systems. This revision removes content such as the qualification management of asset valuation firms, membership management of asset valuers, and the requirement for signatures by the legal representative (partner) of an asset valuation firm or their authorized representatives. The revised standards will now focus primarily on regulating the professional conduct of asset valuation practitioners, with the aim of establishing operational standards for the provision of valuation services—without involving either the initial management of entities or the subsequent enforcement of penalties for violations.

(4) Clearly define the scope of application of the guidelines.

After revision, it is explicitly stipulated that asset valuation agencies and their asset valuation professionals, upon receiving a commission, shall conduct appraisals and estimates of individual assets, asset portfolios, enterprise value, financial interests, asset losses, or other economic rights. They shall be subject to the supervision of the Ministry of Finance and issue written professional reports under the name of “Asset Valuation Report.” Such reports must comply with the Asset Valuation Standards. For matters involving laws, administrative regulations, and provisions of the State Council that are managed by other administrative departments for assessment, implementation shall follow the relevant provisions of those other authorities.

(5) Improve the requirements for the assessment procedure.

The Asset Valuation Standards have refined the requirements for valuation procedures, mandating that all relevant documents, certificates, and other materials used in asset valuation activities be duly verified and validated in accordance with the law. The standards also provide a list of specific methods for verification and validation, as well as provisions addressing how to handle situations where verification and validation cannot be carried out due to legal and regulatory requirements or objective constraints. For significant or special projects, the filing deadline for valuation archives shall not be later than the expiration date of the asset valuation conclusion. 30 Day. It is required that asset valuation archives be retained for no less than fifteen years from the date of the asset valuation report; for asset valuation services mandated by law, the retention period shall be no less than thirty years, and so forth.

(6) Clearly define the scope of assessment method selection.

The “Asset Valuation Law” stipulates that, except where the assessment practice standards mandate the selection of only one valuation method, two or more valuation methods shall be chosen. The asset valuation standards, in compliance with the requirements of the “Asset Valuation Law,” specify the selection of asset valuation methods and clearly define the scope of asset valuation methods required by the “Asset Valuation Law” as comprising three basic valuation methods and their derivative approaches.

(7) Adjust the requirements for issuing assessment reports.

After the revision, the title page and disclaimer of the asset valuation report will emphasize that the report is prepared in accordance with the relevant standards. The disclaimer will also include additional information such as the intended users, user responsibilities, and guidance on correctly interpreting the valuation conclusions, with the aim of standardizing and guiding the proper use of the report and preventing any misleading interpretations. Furthermore, differentiated provisions will be made regarding the signature requirements for statutory versus non-statutory engagements: professionals specializing in asset valuation who handle non-statutory engagements may sign such reports, whereas statutory engagements must be signed by certified asset appraisers who are legally qualified to undertake such assignments. 86 The regulations stipulate that branch offices shall issue asset valuation reports in the name of the asset valuation agency; the guidelines have removed the provision allowing reports to be issued in the name of the branch office, among other changes.

(8) Coordination of format and content among the guidelines

This revision standardizes the wording related to the definition of valuation in the substantive guidelines, removes redundant content between specific guidelines and certain substantive guidelines that arose due to differences in the timing of guideline issuance, and adjusts overlapping content across different guidelines. Additionally, the basic guidelines set forth the fundamental requirements for business practices and professional ethics, while the practice guidelines and professional ethics guidelines provide specific provisions accordingly. This approach not only covers both business and professional ethical requirements but also ensures coordination between these two sets of requirements throughout the guidelines.

(9) Optimization in terms of text

During the public consultation process on the guidelines, the China Association of Asset Appraisers received nearly a thousand suggestions for textual improvements. After carefully studying the collected feedback in light of applicable laws and regulations, the Association incorporated most of the reasonable suggestions and made adjustments and optimizations to the terminology and phrasing used in asset valuation, ensuring that the wording is more precise and meets both professional and linguistic standards. This revision involves textual improvements exceeding... 800 Place.

V. Adopt multiple measures to promote the implementation of asset valuation standards.

Recently, the Ministry of Finance released the "Basic Standards for Asset Valuation," and the China Association of Asset Appraisers also issued... 25 Regarding the Practice Standards and Professional Ethics Guidelines, the “Guiding Opinions on the Valuation of Intangible Assets of Cultural Enterprises” were issued relatively recently and will not be revised for the time being. The China Association of Asset Appraisers will adopt a variety of measures to promote the implementation of asset valuation standards.

(1) Strengthen the promotion of guidelines.

Through modern publicity channels such as newspapers, magazines, the internet, and WeChat, we will vigorously promote the revised content, its background, and its significance, as well as the new standards system. This will ensure that users of reports and the asset valuation industry gain a comprehensive understanding of the revision process, the relationship between the revised standards and the “Asset Valuation Law,” and the connection between the revisions and regulatory oversight, thereby fostering a favorable environment for the effective implementation of the standards.

(2) Conduct guideline training

The China Association of Asset Appraisers, local associations, and asset appraisal agencies should, based on their own specific circumstances, carry out training sessions in various formats on the revised asset appraisal standards. These training sessions should cover specific provisions of the standards, key revisions made to them, and the overall structure of the standards, thereby fostering a strong atmosphere of learning, becoming familiar with, understanding, complying with, and effectively applying the standards.

(3) Conduct guideline interpretations.

Correctly understanding the standards is key to ensuring their effective implementation following the revision. As the entity responsible for drafting and issuing these standards, the China Association of Asset Appraisers will organize experts and scholars who participated in the revision process to provide explanations on the background of the revision, the revision procedure, the main modifications and innovative aspects, as well as specific adjustments made to particular provisions. It will also carry out interpretations of the standard’s clauses, offering detailed explanations of important standard items, clauses that are prone to ambiguity, and specific concepts, thereby promoting a correct understanding of the standards across the entire industry.

(4) Establish a dynamic update mechanism for guidelines.

After the implementation of the guidelines, the China Appraisal Society should conduct follow-up monitoring of their implementation, closely track the implementation status, promptly collect new situations and emerging issues that arise during the implementation process, and develop appropriate response measures and solutions. Furthermore, based on feedback from guideline implementation, the latest developments in appraisal practices and theories both domestically and internationally, changes in relevant regulatory concepts, and the most recent needs of users of appraisal reports, the Society should establish a dynamic update mechanism for the guidelines to ensure their quality and enhance the targeted nature of guideline development.

(5) Accelerate the development of supporting guidelines.

Currently, the China Association of Asset Appraisers is accelerating the development of supporting guidelines to complement the implementation of the existing guidelines. It has already organized experts to conduct research on terminology used in asset valuation guidelines, selecting and defining concepts that are unique to these guidelines or have specific meanings within the valuation standards. Additionally, the association is conducting research on practical procedures for verification and validation processes, providing technical support for guideline development and offering guidance for practitioners. At the same time, it has initiated the drafting of guidelines on valuation methodologies and guidelines on investment value.