The Financial Reporting Council of Nigeria (FRC) is set to introduce new valuation regulations to improve transparency, accountability, and accuracy in financial reporting. These proposed regulations mark a significant step forward in ensuring greater integrity in the country’s financial system.
The CEO and Executive Secretary, Dr. Rabiu Olowu highlighted the crucial role of regulating valuation processes to foster trust in Nigeria’s market. Speaking on the matter, Dr. Olowu emphasized that accurate financial reporting is the foundation of trust in the country’s economy. He further explained that the proposed regulations are designed to ensure valuations accurately reflect the financial health of entities, impacting critical decisions like resource allocation, investment strategies, and regulatory compliance.
As indicated by him, “They provide a structured approach to valuation that will help standardise practices, mitigate risks associated with subjective judgment, and enhance the comparability of financial statements across entities and jurisdictions.
“By providing clear and concise guidelines on how valuations should be conducted, the regulations ensure consistency in the approach used by different professionals and institutions. This will reduce the room for ambiguity and subjective interpretation. “The proposed regulations require that the methods and assumptions used in valuations be clearly disclosed. This level of transparency is essential to ensure that stakeholders have a clear understanding of how values were derived and the underlying assumptions.”
The FRC chief stated that the valuation regulation, set to take effect next year, will offer clear guidelines to minimize ambiguity and ensure consistency across valuations. He further explained that by defining the roles and responsibilities of valuers, auditors, and other key stakeholders, the regulations aim to enhance accountability in the valuation process.
Dr. Olowu stressed that strong valuation standards are vital in today’s global economy, where consistency drives investment decisions. This session marks a key step in improving financial reporting, with a commitment to upholding integrity and trust for a stronger financial system.
