ICAEW's CPD Regulations outline the amount of professional development ICAEW members should be undertaking and mandate an hour of ethics training each year. At the heart of the regulations are are six core CPD categories: 1-3 for those working within an accountancy practice and 1-3 for those working in industry.

ICAEW members must identify which CPD category they fall into to understand the minimum number of CPD hours they should complete each year, and the proportion of which need to be verifiable.

The regulations detail a list of roles that move an individual from the default category 3 (requiring 20 hours of CPD) into the higher categories (1 or 2) which require additional CPD hours.

Valuation services and CPD categories

Those valuing organisations and assets could fall into different CPD categories depending on the work they do or the organisation they work for. For example, while the majority of those providing valuation services work in practice, some will work in industry and, therefore, will have different CPD obligations.

As with many other accountancy activities, the work of many valuation practitioners falls into the default of CPD category 3. However, this might not always be the case.

While valuation is not specified as belonging within categories 1 or 2 in the CPD Regulations, the context in which valuation takes place may mean that you should consider whether you fall into one of those higher categories.

“Valuation is a complex area,” explains David Franklin, ICAEW’s Chief Financial Officer. “If you are spending a significant proportion of your time on audit engagements for entities of high public interest, or in forensic accounting then there are enhanced requirements in terms of your CPD.”

Supporting audit engagements

If you are a valuation practitioner spending 30%, or more, of your time supporting audit engagements you could fall into one of the higher CPD categories. Examples of the type of work you could be undertaking include the assessment of the value of goodwill and other assets.

In this circumstance, the CPD category that will apply to you depends upon the type of organisation being audited. If you’re working on engagements for public interest entities (PIEs), such as financial services institutions and listed entities, the relevant CPD category is practice category 1. This requires the completion of 40 hours of CPD each year, with 30 of those hours being verifiable.

Meanwhile, if you’re supporting audit engagements for large companies – those who meet 2 out of 3 of the following criteria:  turnover greater than £36m, a balance sheet value greater than £18m and more than 250 employees – then you would fall into practice CPD category 2. This requires 30 hours of CPD a year, with 20 of those verifiable.

If the audit engagements you are involved with do not involve PIEs or large companies, then the default practice CPD category 3 will apply.

Forensic accounting

If your valuation work is in support of forensic accounting services, you may also have higher CPD obligations. Forensic accounting services are those undertaken in support of a court process, or work which may move onto a court process if mediation fails. Valuation provided for quasi-judicial processes, such as a determination, would also count as supporting forensic accounting services. Examples of this kind of work, include:

• valuation in the context of divorce as a single joint expert or an expert appointed by one side; 
• valuation relating to shareholder disputes – section 994 Companies Act 2006;
• valuation related work in contractual disputes – such as lost profit claims;
• valuation for tax purposes that may go to the Tax Tribunal; and
• claims by liquidators for putting assets beyond reach.

The CPD Regulations specify that those in practice who spend 30% or more of their professional time undertaking forensic accounting work as within practice CPD category 2. This requires 30 hours of CPD a year, with 20 of those verifiable.

Create your CPD plan 

Once you have identified the CPD category that’s most relevant, you need to include this and the reasons why it is the correct category for you in your CPD plan. Then you can begin considering what CPD activities will meet your development needs.

Read more about how to record your CPD here.