Helping Frontier & Emerging Countries Develop Valuation Professionals

VRG’s U.S.-based partner, VRC’s Chris Mellen taught part of a 10-day business valuation seminar in Kuala Lumpur, Malaysia. The class focused on a number of topics including intangible asset valuation and other advanced business valuation topics.

The training was done by the International Association of Consultants Valuators and Analysts (IACVA). As a member of the education committee and director of continuing education for the organization, Mellen was one of four professionals invited to teach.

The training explained the fundamentals of business valuation and intangible asset valuation and helped business leaders earn the International Certified Valuation Specialist (ICVS) designation. The class included four segments – best practices for business valuation, best practices for intangible asset valuation, case analysis and report writing.

Malaysia’s Ministry of Finance has encouraged the development of these skills. The Ministry established the Institut Penilaian Negara (National Institute of Valuation or INSPEN) as part of the Valuation and Property Services Department within the Ministry of Finance. INSPEN was established in 1985 to enhance knowledge and expertise and is now the leading provider of real estate training and research in Southeast Asia.

There were 40 participants, most of whom were well established real estate appraisers from throughout Malaysia. With the growth in demand for business valuation services in Malaysia and a very limited number of appraisers outside the large accounting firms, INSPEN and IACVA collaborated to train real estate appraisers who have begun to expand into business valuation.

VRC’s Mellen also led a training webcast for professionals in China on forecasting cash flows. Broadcast in Mandarin, Mellen helped participants understand forecast assumptions, time horizons, and processes. He examined the importance of forecasts in constructing a business valuation model. The time during the webcast was also spent focusing on financial statements and terminal value, and presenting a three-stage discounted cash flow (DCF) model.

As frontier economies like Malaysia emerge and significantly large yet still developing economies like China continue to mature, their governments are in some ways seeking to accelerate the establishment of business best practices and the evolution of business services providers to move these economies more quickly along the development curve.