José Covas FRICS
When a lender, an auditor or a regulator writes “IVS” or “Red Book” into a terms of engagement, the question I hear most is which of the two they should ask for. It is the right question, but it rests on a misconception: that these are two rulebooks to choose between. They are not. The RICS Red Book is built on the International Valuation Standards. Understanding that alignment is the most useful thing a user of valuation reports can take from the current editions.
One framework, applied
The International Valuation Standards (IVS) are the global valuation standards set by the International Valuation Standards Council (IVSC). They contain mandatory requirements that must be followed in order to state that a valuation was performed in compliance with IVS: the General Standards, the Appendices and any applicable Asset Standards.
The RICS Red Book (RICS Valuation – Global Standards) adopts and applies IVS. It reproduces IVS in full and supplements them with additional requirements and best-practice guidance for RICS members and regulated firms. The two are deliberately synchronised: the current Red Book Global edition (December 2024) adopts the IVS published on 31 January 2024, and both apply from 31 January 2025.
The 2025 Red Book went further in that direction. Its valuation technical and performance standards (VPS 1–6) were restructured to map to IVS — terms of engagement, bases of value and assumptions, approaches and methods, inspections and records, valuation models (a new VPS 5), and reporting. A reader moving between the two documents now finds the same architecture.
The cycle continues. IVSC ran a public consultation on an Exposure Draft of the next IVS (30 January to 30 April 2026). Subject to that process, the next edition of IVS is due to be published on 31 January 2027 and to become effective on 31 January 2028. RICS has said that Red Book 2028 will be developed following the final publication of those updated IVS — so the same alignment logic will apply again: IVS first, then the Red Book that adopts and applies them.
What the Red Book adds to the IVS baseline
Alignment does not mean duplication. The Red Book applies IVS within a professional and regulatory framework:
- Who signs. The Red Book applies to RICS members and RICS-regulated firms providing written valuations, and most valuation work also requires RICS Valuer Registration — a mandatory scheme with risk monitoring and quality assurance that checks compliance with the Red Book.
- Professional conduct. Professional Standards PS 1 and PS 2 sit alongside the VPSs.
- Oversight. IVS is given force by those who adopt it — regulators, professional bodies and clients. In the Red Book, RICS regulation is part of the framework itself.
Dual assurance
This is why a Red Book statement carries particular weight. In RICS’s own words, confirming that a valuation complies with the Red Book provides “the dual assurance of compliance with IVS and with RICS professional standards overall”.
For a bank, that means one statement answers two questions: was the valuation performed to the international standard, and was it performed by a registered, regulated professional subject to quality assurance? For an auditor, it means the evidence trail — terms of engagement, records, reporting — follows a structure recognisable under both frameworks.
The same alignment holds on technology. Both frameworks are clear that a model output without the valuer’s professional judgement does not produce a compliant valuation. The use of AI is not prohibited; it does not replace the valuer.
How alignment works in practice
Two nuances show how the system is designed to hold together rather than pull apart.
First, national law. Under IVS, where legal or regulatory requirements conflict with IVS, they should be prioritised, explained, documented and reported in order to remain compliant. The Red Book takes a compatible position: a valuation that must also follow mandatory national standards can still be declared as performed in accordance with the Red Book, and RICS publishes national supplements for that purpose.
Second, scope. The Red Book identifies a small set of activities — agency or brokerage, negotiations or litigation, expert witness work, statutory functions and some internal valuations — where VPS 1–6 are not mandatory. PS 1 and PS 2 still apply, and in those cases the member must not state that the valuation was performed in accordance with IVS. That is consistency, not a gap: the IVS label is used only where IVS has been applied.
Three questions for the user of the report
- Do the terms of engagement name the standard? VPS 1 requires them to confirm whether the valuation will follow IVS and/or the Red Book.
- Does the report state compliance, and explain any departure? Departures are permitted only where explained.
- Is there a local legal or regulatory requirement on top, and has it been documented and reported?
If the answers are clear, a Red Book report gives the bank and the auditor what they need: the international standard, applied by a regulated professional, with the evidence to show it.
Further reading
- IVS vs Red Book
- What is a Red Book valuation?
- What are the International Valuation Standards?
- About José Covas
Related reading
This note is general information and not advice on any specific valuation.