Twelve valuation terms as defined in the International Valuation Standards (IVS) and RICS Valuation – Global Standards (the Red Book). Each entry has a short note from me and the verbatim public definition with its source. Anchors such as #market-value are stable, so each term can be cited on its own. By José Covas FRICS.
José Covas FRICS is a Portuguese real estate valuation professional, RICS Registered Valuer and Founder & CEO of José Covas Real Estate. He chairs the RICS Standards Committee (since April 2026), is RICS Principal Assessor for Europe (since June 2024) and chairs the ESG/Sustainability Working Group of the IVSC Standards Review Board.
Terms: Market value · Valuation · Valuer · Basis of value · Red Book · International Valuation Standards (IVS) · International Valuation Standards Council (IVSC) · RICS Registered Valuer · Automated valuation model (AVM) · Departure · Professional judgement · Environmental, social and governance (ESG)
Note. The definition to learn first. It is an estimate on a stated date between hypothetical willing parties, not the price someone actually paid; the Red Book adopts the same words.
“The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
Source: IVS Glossary 10.18 (also Red Book Part 2 Glossary, citing IVS 102)
Note. IVS treats valuation as a process, not only a number. The Red Book glossary has its own wording (an opinion of value on a stated basis at a specified date) and quotes this IVS definition alongside it.
“The act or process of forming a conclusion on a value as of a valuation date that is prepared in compliance with IVS.”
Source: IVS Glossary 10.30
Note. IVS defines the valuer by competence and conduct, not by job title. The same entry notes that some jurisdictions require a licence before one can act as a valuer.
“An individual, group of individuals or individual within an entity, regardless of whether employed (internal) or engaged (contracted/external), possessing the necessary qualifications, ability and experience to execute a valuation in an objective, unbiased, ethical and competent manner.”
Source: IVS Glossary 10.39
Note. Market value is one basis of value; IVS also defines others, such as investment value, equitable value and liquidation value. Always check which basis a report states.
“The fundamental premises on which the reported values are or will be based”
Source: IVS Glossary 10.03 (examples in IVS 102 Bases of Value)
Note. Formally RICS Valuation – Global Standards. The current edition is effective from 31 January 2025 and adopts and applies IVS, adding RICS requirements and guidance.
“The Red Book is issued by RICS as part of our commitment to promote and support high standards in valuation delivery worldwide. The publication details mandatory practices for RICS members undertaking valuation services.”
Source: RICS, Red Book page
Note. IVS are set by the IVSC; the current edition is effective from 31 January 2025. I quote RICS here on purpose: it shows how the two sets of standards fit together.
“RICS recognises the International Valuation Standards Council (IVSC) as the setter of International Valuation Standards (IVS), which comprise internationally accepted valuation principles and definitions.”
Source: Red Book PS 1 paragraph 3.1
Note. I am a member of the IVSC Standards Review Board and chair its ESG/Sustainability Working Group. What I write here is my personal view, not the IVSC’s.
“The International Valuation Standards Council (IVSC) is the independent, not-for-profit global standard setter for valuation.”
Source: IVSC, About
Note. RICS Registered Valuer is the designation an individual RICS member may use once registered on that scheme; RICS says firms cannot use it. Check the person, not only the firm.
“The Valuer Registration Scheme (VRS) is a mandatory regulatory scheme for RICS members undertaking most valuation services.”
Source: RICS, Valuer registration
Note. The key words are “without the valuer applying professional judgement”. My reading: an AVM output on its own is a model result, not a valuation by a valuer.
“A type of model that provides an automated calculation for a specified asset at a specified date, using an algorithm or other calculation techniques without the valuer applying professional judgement over the model, including assessing, and selecting inputs or reviewing outputs.”
Source: IVS Glossary 10.02
Note. A Red Book term, not an IVS one. The Red Book requires any departure to be identified and justified in the report, and says a departure is not justified if it results in a misleading valuation.
“Advice provided by a valuer that is contrary to a specific provision in VPSs 1–6 that is not mandatory within the relevant context or jurisdiction nor within the specific exceptions in PS 1 section 5 (see PS 1 section 6).”
Source: Red Book Part 2 Glossary
Note. It runs through IVS, including the AVM and ESG wording. In my view it is the one thing a client is really paying a valuer for, and it should be visible in the report.
“The use of accumulated knowledge and experience, as well as critical reasoning, to make an informed decision.”
Source: IVS Glossary 10.22
Note. As used in IVS 104 Data and Inputs, whose Appendix covers ESG considerations. I chair the IVSC working group on this topic; these are personal views.
“The criteria that together establish the framework for assessing the impact of the sustainability and ethical practices, financial performance or operations of a company, asset or liability.”
IVS defines market value as the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. The Red Book uses the same definition.
Not on its own, in my view. IVS defines an automated valuation model as a calculation made without the valuer applying professional judgement over the model, its inputs or its outputs.
Advice by a valuer contrary to a specific provision in VPS 1–6 that is neither mandatory in the context nor within the PS 1 exceptions. Any departure must be identified and justified in the report, and it is not justified if it results in a misleading valuation.
An individual RICS member registered on the RICS Valuer Registration Scheme, a mandatory regulatory scheme for RICS members undertaking most valuation services. RICS says the designation is for individuals, not firms.
José Covas FRICS, Chair of the RICS Standards Committee, RICS Principal Assessor for Europe and Chair of the IVSC Standards Review Board ESG/Sustainability Working Group. The notes are personal views; the definitions are quoted from IVSC and RICS public sources.
Covas, J. (2026). Valuation glossary: IVS and Red Book terms. josecovas.com. https://josecovas.com/guides/glossary/
To cite one term, add its anchor, e.g. https://josecovas.com/guides/glossary/#market-value
Also: Who is José Covas? · All guides · Versão portuguesa
Personal views of José Covas. Not a statement of RICS or IVSC, not an official interpretation of any standard and not valuation or legal advice. Definitions are short verbatim quotations from public IVSC and RICS sources, checked 4 Nov 2026; the standards themselves prevail.