What is the CVFI credential?

The Certified in the Valuation of Financial Instruments (CVFI®) credential is designed to enhance consistency and transparency of fair value estimates for financial instruments such as mortgage-backed securities, credit default swaps, complex bonds and other derivatives.

Key components of this new credentialing program include compliance with the Financial Instruments Performance Framework that will help define “how much” work is necessary to provide supportable and auditable fair value measurements which will be reviewed through an ongoing Quality Monitoring process.

Valuation professionals who perform fair value measurements of financial instruments, such as mortgage-backed securities, credit default swaps, complex bonds and other derivatives for financial reporting purposes, whether already credentialed or not, can obtain the CVFI credential as long as they are:

• Members of the AICPA

• Possess the requisite education and experience

• Pass the CVFI credential exam.
  

Please visit the CVFI credential overview for more information.

The Financial Instruments Performance Framework (“FIPF” or “Framework”) is a practical non-authoritative framework that establishes documentation requirements and defines “how much” work is necessary to provide supportable and auditable fair value estimates for financial instruments. The Framework is designed to enhance consistency and transparency in the performance of fair value measurements to the benefit of the public interest.

It is mandatory for valuation professionals who have earned the CVFI credential to adhere to the framework when engaged (or assigned if an employee) by (a) an entity required to submit registration statements or filings to a national regulatory authority such as the U.S. SEC, UK Prudential Regulation Authority, or European Banking Authority, or (b) a privately held entity that prepares and issues financial statements in accordance with an accounting or regulatory standard to perform a valuation of a financial instrument or component thereof used to support management’s assertions made in financial statements issued for financial reporting purposes.

The CVFI credential is designed to guide valuation professionals as they estimate the fair value of financial instruments for financial reporting purposes. This includes estimating the fair value of derivatives, structured products, securitized debt and more.
Financial statements issued for financial reporting purposes include, but are not limited to, financial reports issued by:

• Entities required to submit registration statements or filings in compliance with reporting standards set by the U.S. SEC, UK Financial Reporting Council, or similar authorities

• Privately held entities that prepare and issue financial statements in accordance with United States generally accepted accounting principles (U.S. GAAP) or the International Financial Reporting Standards (IFRS)

• Any other engagement in which the individual is performing services as a valuation professional

Important: if a CVFI credential holder is engaged by a privately held entity that does not issue financial statements or other reports in accordance with U.S. GAAP, IFRS, or other standards (e.g., financial statements issued for regulatory reporting) and the engagement falls within the subject matter scope of the FIPF, the CVFI credential holder should follow the FIPF for the engagement or assignment.

If the CVFI credential holder elects not to follow the FIPF for this type of engagement or assignment, the CVFI credential holder must prominently display this fact and rationale in the final valuation report.

Conventional Pathway — Candidates must have a minimum of 3,000 hours of experience related to fair value estimates for financial instruments in the five years preceding the application for the CVFI credential.

Experienced Pathway — Candidates must have at least ten (10) years and 6,000 hours of experience related to fair value estimates for financial instruments.

Experience must be attested to by a partner or supervisor (or past partner or supervisor, if you changed employers). If a partner or supervisor is not available, peer attestation is acceptable.

For the purpose of the CVFI credential, experience related to:

• Fair value estimates for financial instruments may include performing, supervising, or managing valuation engagements or assignments as a valuation professional

• Review of valuations prepared by the firm’s valuation team

• Reviews of valuations prepared by a third party, by management, by auditors, and/or auditor firm’s valuation team

• Signing valuation reports

• Consulting on, instructing, researching, developing thought leadership, and staff development on valuation matters related to financial instruments

The CVFI Body of Knowledge can be found in the CVFI Credential Handbook.

Conventional Pathway — You must have a bachelor’s degree, or equivalent, and undertake the CVFI education that covers the body of knowledge for the credential.

Experienced Pathway — You must have a bachelor’s degree, or equivalent, and undertake the required CVFI education that covers the FIPF.

The CVFI education is available in a self-paced virtual format and includes end-of-course exams that are required to obtain credit for completing the courses.

The six (6) courses the CVFI body of knowledge covers are:

• Accounting Standards Related to Financial Statements and Fair Value

• Current Expected Credit Losses (CECL)

• Financial Reporting Standards, Market Organization, & Economics of Regulation

• Audit Considerations

• Valuation and Risk

• Financial Instruments Performance Framework

Candidates pursuing the CVFI credential through the Conventional Pathway must complete all six courses.

Candidates pursuing the CVFI credential through the Experienced Pathway must complete the Financial Instruments Performance Framework course.

Yes. All candidates must successfully pass the CVFI credential exam to obtain the CVFI credential.

Conventional Pathway — This is an online timed exam with 120 multiple-choice questions. The exam is designed to test the candidate’s understanding of the guidance covered by the body of knowledge for the credential.

Experienced Pathway — This is an online timed exam with 60 multiple-choice questions that examines the candidate’s knowledge of the FIPF.

• The CVFI credential exams are timed, computer-based and non-disclosed exams that can be taken remotely
  

• The questions and answers are not published nor are you permitted to share any of the information included on the exams

• The grading process for the CVFI credential exams is immediate

• You receive a “Pass” or “Fail” grade upon electronic submission of the exam

Yes. Required training on the AICPA Code of Professional Conduct and Valuation Standards1 must be completed within 30 days after applying for the CVFI credential. This training is included in the CVFI Credential Pathway bundles available in the AICPA Store.

1Not required for CPAs due to existing CPA license requirements related to the completion of ethics training.

The required CVFI education, CVFI exams and required standards education courses are packaged together and can be purchased in the AICPA Store.

• The Conventional Pathway bundle

• The Experienced Pathway bundle

All CVFI credential holders must meet the following requirements to maintain the CVFI credential:

• Maintain membership in good standing with the AICPA

• 1,500 hours of experience related to fair value estimates for financial instruments every five years

• Complete eight hours of training on topics related to financial instruments annually

• Comply with the Financial Instrument Performance Framework

• Participate in an ongoing Quality Monitoring process

CVFI credential holders must periodically file information via an annual compliance questionnaire. Here they list their process and procedures related to their organization and its financial instruments valuation practice.