Content Structure
What do we mean by legal theoretical framework?
The term legal theoretical framework refers to the conceptual and normative structure that provides the legal foundation for a specific topic. This framework includes the theories, principles, laws, jurisprudence and other relevant regulations that inform and guide the analysis and understanding of a particular area of law. Essentially, it constitutes the set of legal and theoretical knowledge that supports and contextualizes the discussion and application of the law in a given field.
Legal theoretical framework in valuation
The legal theoretical framework in valuation is a fundamental element in the process of determining the value of assets, properties or companies, This framework establishes the legal and regulatory bases that govern the valuation process, ensuring that it is carried out in a fair, objective and transparent manner, in this sense, the theoretical legal framework covers a series of laws, regulations and professional standards that appraisers must take into account when carrying out a valuation, these regulations may vary depending on the country. or jurisdiction, but generally include accounting principles, internationally recognized valuation standards, as well as specific laws related to the type of asset or property to be valued.
In addition, the legal framework in valuation also considers ethical and professional responsibility aspects, ensuring that appraisers act with integrity and in compliance with established regulations. Ultimately, a solid theoretical legal framework in valuation provides the necessary basis to guarantee the validity and reliability of the valuation results, which is crucial for both asset owners and users of financial information.
Importance of a legal theoretical framework in valuation
A legal theoretical framework in valuation is of utmost importance for several reasons:
Ensures compliance with the law: It provides a set of rules and regulations that appraisers must follow to ensure that their work is in line with local and international laws and regulations. Depending on the purpose of the appraisal, there will be organizations that regulate valuation procedures, to mention some examples, there is the Institute of Administration and Appraisals of National Assets (INDAABIN), the Bank of Mexico, the National Banking and Securities Commission, the National Securities Commission. Insurance and Bonds, the Federal Mortgage Society, the National Credit Society, and the Ministry of Economy.
Ensures consistency and objectivity: By establishing clear standards and procedures, the legal framework in valuation helps ensure that valuation processes are consistent and objective, minimizing the risk of bias or subjective interpretations. A starting point to establish standards are INDAABIN's technical valuation methodologies.
Protects the parties involved: By complying with a sound legal framework, parties involved in a transaction or valuation process are protected by reducing the risk of litigation and legal disputes related to asset valuation.
Promotes trust and transparency: A solid theoretical legal framework fosters the confidence of investors, asset owners and other interested parties by ensuring that the valuation process is transparent and supported by recognized regulations and standards, this point is of great relevance for operations carried out between related parties or also the well-known transfer pricing, since management by the transparent and neutral appraiser will guarantee that the two parties involved are satisfied and have a fair and real study.
Facilitates comparability and knowledge transfer: It is one of the objectives of the NIF, IFRS AND ASA, since by adopting a common legal framework, the comparison of valuations between different assets or companies is facilitated, as well as the transfer of knowledge and best practices between valuation professionals.
In summary, a legal theoretical framework in valuation is essential to guarantee the integrity, reliability and validity of the valuation processes, as well as to protect the interests of the parties involved and promote confidence in the market.
Relationship between the Official Journal of the Federation and an Appraiser
The Official Gazette of the Federation (DOF) It is the official means of publication of laws, decrees, regulations, agreements, circulars and other general provisions issued by the powers of the Union in Mexico, it is a fundamental instrument for transparency and access to information in the country.
In relation to appraiser experts, their work is related to the valuation of movable and immovable property, as well as the issuance of opinions on their condition, economic valuation or any other related technical aspect, the performance of appraiser experts may be required in various areas, such as judicial processes, commercial transactions, administrative procedures, among others.
The relationship between the Official Journal of the Federation and appraisers may occur in the context of the publication of regulations, laws, rules or provisions that affect their professional practice, for example, changes in the regulations related to the valuation of real estate or in the requirements for the practice of the profession of appraiser may be published in the DOF. This is important so that appraisers are aware of regulatory updates that impact their professional work and can adjust their practice in accordance with the new legal requirements.
In it, you can also find some conditions for the formats that can be used for some common goods in their use and demand, legal provisions that regulate the activity as well as conditions for the exercise that determines an assessment of an asset for the matter of movable and immovable property.
Who are the authority figures for a valuation according to the DOF?
- Professional with studies. (Professional license) Specialist. (the degree of appraiser is not yet held)
- Expert (You need to register with some agency.) (Searched in the DOF)
Guys
- Experts Judicial.
- Banking experts.
- Mortgage company.
- Prosecutor (RCFF Art. 3).
- Treasury.
- INDAABIN
INDAABIN, regulator of appraisers for the valuation of public and federal assets
INDAABIN is the Institute of Administration and Appraisals of National Assets, it is an institution of the Mexican government in charge of managing and valuing real estate property that is property of the Mexican State. Among its functions are the valuation of real estate, the administration of these assets, as well as the development and application of regulations related to the administration and valuation of real estate property owned by the federal government in MexicoIn addition, INDAABIN also plays an important role in the regulation and supervision of valuation experts who work in the country.
Its institutional objectives are:
Objective 1: Guarantee the legal security of federal and parastatal real estate.
Objective 2: Promote the efficient management and use of real estate assets.
Objective 3: Update the regulatory framework that regulates real estate policy.
Objective 4: Issue valuation evaluations in a timely and transparent manner.
Objective 5: Strengthen institutional capacities in accordance with the principles of republican austerity.
What laws regulate appraisals of intangible assets in Mexico?
In Mexico, valuations of intangibles are regulated mainly by the Securities Market Law and the Financial Information Standard. (NIF) C-15 “Recognition and valuation”, issued by the Mexican Council for Research and Development of Financial Reporting Standards (CINIF)This standard establishes the guidelines for the recognition and valuation of intangible assets in the financial statements, including the valuation methods to be followed.
In addition, the National Banking and Securities Commission (CNBV) and the Mexican Institute of Public Accountants (IMCP) They issue additional guidelines and recommendations for the valuation of intangibles in the financial and accounting fields.
It is important to note that intangible asset appraisals can cover a wide range of assets, such as trademarks, patents, copyrights, software, among others, so the regulation may vary depending on the type of intangible being valued and the specific context of the situation.
Parameters to consider for a legal theoretical framework in valuation
A manual that details the parameters for a legal theoretical framework in valuation could include the following aspects:
- Relevant regulations and standards
Identify and describe the relevant laws, regulations and professional standards governing valuation in the specific jurisdiction. This may include laws related to accounting, taxes, intellectual property, financial markets, and industry-specific regulations.
- International accounting principles
Highlight recognized international accounting principles, such as International Financial Reporting Standards (IFRS), that establish the bases for the presentation of financial statements and can influence the valuation process.
- Recognized valuation standards
Examine internationally recognized valuation standards, such as International Valuation Code (IVS) or Guidelines from the American Association of Evaluators (ASA), which provide guidelines and best practices for asset valuation.
- Specific legal aspects by type of asset
Detail the specific legal aspects that can affect the valuation of different types of assets, such as real estate, companies, intangible assets or financial assets.
- Ethics and professional responsibility
Address the ethical principles and professional responsibilities that appraisers must follow, including impartiality, confidentiality, professional competence, and full disclosure of conflicts of interest.
- Disclosure and Documentation Requirements
Establish the disclosure and documentation requirements necessary to support the valuation process, including documentation of the assumptions, methodologies and data used in calculating the value.
- Compliance and audit procedures
Describe the compliance and audit procedures that can be applied to verify compliance with the theoretical legal framework in the valuation and ensure the quality and integrity of the valuation results.
- Legislative updates and changes
Highlight the importance of staying abreast of legislative and regulatory changes that may affect the valuation process, and provide guidelines for adapting and complying with these new regulations.
By providing detailed guidance on these parameters, a legal theoretical framework in valuation manual can help valuation professionals conduct sound, transparent and legally compliant valuations, as well as protect the interests of the parties involved in the process.
How can I ensure that the appraisal they give me will work for me?
It is very important to be clear from the beginning about the purpose of the appraisal in order to inform the professional in charge what parameters and information you want to include, that the person who carries it out is an expert on the subject, that is, a professional in valuation that is certified and with a certificate issued by the SEP, this as a first step.
It is also necessary that the structure of the appraisal in question complies with the guidelines of the entity that requests it, that is, when the purpose is fiscal, as in the case of a sale, we must resort to what the Art. Article 3 of the Tax Code RegulationsIf it is for the purpose of acquiring insurance, it is necessary to adhere to the Insurance and Bond Law and in various cases, being a prosecutor, it is correct to adhere to what the State treasury dictates.
Therefore, you must always go to agents specialized in the matter that guarantee quality, honesty, confidentiality and, above all, efficiency.
