Notice Of The China Appraisal Society On Distributing The Interim Guidelines On The Appraisal Of Financial Reports, issued by China Appraisal Society on November 9, 2007 and will take effect on December 31, 2007.
The China Appraisal Society issued the “Interim Guidelines on the Appraisal of Financial Reports” (“Guidelines”) to regulate and guide asset appraisers in their appraisal of financial reports (“appraisal service”).
1.What requirements and rights are provided in the Interim Guidelines in regard to the appraisal institution?
As stated in the Guidelines, the appraisal institution providing the appraisal report for a financial report shall be qualified and hold the qualification certificate for asset appraisal issued by the Ministry of Finance. Registered asset appraisers shall operate their business independently, with no interest relating to the involved parties. The appraisal service is immune to any intervention from any department, social group, enterprise or individual. The appraisal report shall be given by the appraisal institution after the registered asset appraiser finishes the appraisal.
2. What is the scope of the appraised asset?
Based on the details of the project, the accounting rules and the requirements of the custodian, the appraised asset could be a single investment, debt and group assets. When operating the business, the appraiser shall clarify and define the value of the specific assets according to the accounting rules, the relevant requirements on accounting and information disclosure and the appraisal asset.
3. How to determine the time for the appraisal service?
The time for the appraisal service shall be determined by the appraised asset, value type, state of information collection and data sources. One or more methods may be adopted for the appraisal. However, the new adopted methods shall be consistent with the methods used before.
When the registered asset appraiser adopts the market-based approach for the appraisal, he/she shall refer to the asset trading activity in the market and compare the value of similar assets; if the cost approach is adopted, the appraiser may take the appraisal method according to the characters and the application conditions of the appraised assets.