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The Revised 2026 CBV Practice Standards: What Lawyers and Clients Need to Know
- Melanie Russell
- May 20
- 5 min read
Article Written May 18, 2026 | Posted 2026-05-20 | Business Valuation
Effective January 1, 2026, the Canadian Institute of Chartered Business Valuators (“CICBV”) introduced significant revisions to its Valuation Practice Standards, particularly in relation to calculation valuation reports. The changes represent a meaningful shift in the extent of work and the documentation required for calculation level reports. For a number of years, the CICBV has been concerned about the reliability and consistency of practice relating to these reports. The revisions reflect lessons from the CBV practice inspection program, increasing expectations from the Courts and other adjudicative bodies, regulators and users, alignment with global standards such as International Valuation Standards (“IVS”) and users’ needs for greater consistency, transparency, and credibility.
For lawyers and clients who rely on valuation reports, the implications are important. In many respects, the new standards will lead to more transparent, better supported and more defensible valuation conclusions–but also more scrutiny on how those conclusions are reached.
This article highlights what matters most for users of valuation reports.
1. A Fundamental Shift: From “Reports” to “Valuation Conclusions”
At the centre of the updated framework is Practice Standard 100 (PS 100), which introduces a principles-based structure governing all valuations. (PS 100 defines the different valuation reports available – calculation, estimate and comprehensive.) The emphasis is no longer just on the form of the report, but on the quality of the work performed, the reasonableness of the conclusion and whether the valuation is fit for its intended purpose and users.
Of note, the focus will increasingly be on how the valuator got to the answer–not just the answer itself (i.e., less of a “black box”). In my experience, while the CICBV Practice Standards previously had the overarching requirement that there should be disclosure of whatever would be useful for users in a particular situation, the interpretation of this requirement varied among professional valuators.
2. “Fit-for-Purpose” is Now the Governing Principle
Across the standards–particularly PS 100 and PS 110–there is a clear directive:valuation work must be tailored to the engagement, purpose, and intended users. This affects the scope of work performed, the level of detail in the report and the depth of analysis supporting key assumptions.
There is no longer a safe reliance on calling a report a “Calculation” or “Estimate” level to justify limited work. Even lower-scope engagements must be appropriate for the circumstances.
3. Enhanced Disclosure: More Transparency, Less “Black Box” Valuation
PS 110 significantly expands disclosure requirements. Valuation reports must now clearly explain scope of work performed; information relied upon; significant inputs and assumptions (and their sources); professional judgments made; and how the conclusion was reached. There are also requirements to identify the valuator and not just the firm, disclose industry and economic factors and explicitly describe any scope limitations and their impact.
For users of valuation reports, this should result in a better understanding of the valuators’ process in preparing the report. In addition, weak assumptions or unsupported inputs will be easier to identify, and boilerplate disclosure will no longer meet the Professional Standards.
4. Scope of Work: Higher Expectations at All Levels
Practice Standard 120 (PS 120) brings one of the most substantive changes. Key developments include:
Scope of work requirements now apply to all levels of valuation conclusions;
Valuators must support and assess all significant inputs and assumptions;
A “step-back” (reasonability) test is required–does the conclusion make sense in the broader market context?
Prior transactions, valuations or market indicators must be considered. This can also be referenced as “triangulation” requirements;
Written engagement agreements are now mandatory;
A quality review process must be applied to every engagement.
Importantly, PS 120 specifically states that if key assumptions cannot be supported, they must be disclosed as scope limitations, and if limitations are severe, no valuation conclusion should be issued.
Kalex Partners Inc. welcomes the opportunity to answer your questions and provide support on business valuation matters, including those related to topics covered in this article.
5. Documentation: If It’s Not Documented, It Didn’t Happen
Practice Standard 130 (PS 130) significantly tightens file documentation requirements. Valuators must now maintain documentation supporting independence and conflict checks, scope of work decisions, assumptions and inputs, valuation calculations, reasonableness testing and quality review procedures for all valuation reports, regardless of the level of valuation conclusion.
6. Draft Reports: Increased Restrictions and Risk
The new standards tighten and reinforce the previous standards relating to the use of draft reports. Drafts must meet specific conditions and disclosures, they must clearly state that they are not to be relied upon and improper reliance on drafts is explicitly discouraged. This aligns with concerns identified in practice inspections, where draft reports were sometimes used improperly in disputes.
7. Treatment of Missing Information (Adverse Inference Context)
One area of particular relevance in litigation is how valuators deal with incomplete information.
Guidance from the CICBV emphasizes that valuators should identify missing information, document efforts to obtain it, explain its significance and assess how conclusions may change under different assumptions. The role of the valuator is not to “penalize” a party, but to make the impact of missing information clear so the Courts or other adjudicative bodies can draw appropriate inferences.
8. Clarifying What Is (and Is Not) a Valuation Report
Practice Bulletin 5 (PB 5) provides guidance on when reporting standards do not apply. In general, if a communication contains a conclusion of value, the Practice Standards in terms of reporting, scope of work and file documentation will apply.
Examples of exceptions to this general rule include pricing analyses for contemplated transactions, advisory work without a value conclusion and strictly internal communications.
PB5 emphasizes that this is not a way to opt out due to time, cost or limited information.
9. What Do the Changes Mean for Lawyers and Clients
Overall, users of valuation reports under the revised Practice Standards can expect greater disclosure and transparency in reports, easier identification of weak assumptions or scope limitations and easier understanding of the scope of work and the valuation process used.
In preparing valuation reports going forward, particularly for calculation level engagements, valuators will likely require more upfront information including corroborating documentation, clearer engagement terms and more time and cost, particularly for lower-level engagements. And importantly, users of valuation reports need to carefully consider the appropriate level of valuation report for a particular situation. In many cases, calculation level engagements will not suffice, while in others, they may.
But, in return, valuation conclusions should be more defensible and reliable.
Final Thoughts
The revised 2026 CBV Practice Standards do not change the fundamentals of valuation–but they raise the bar on execution. For users of valuation reports, the key shift is that valuation conclusions must now be clearly supported, transparent, and defensible—not just technically sound. This is a positive development for the profession, users and for the Courts and other adjudicative bodies, as it should lead to better quality evidence and more informed decision-making.
