ANEVAR, the national valuation and appraisal society in Romania, held its annual valuation conference in Bucharest, which is Romania's capital and largest city, as well as the most important industrial and commercial center of the country. With 2 million inhabitants in the city proper and more than 2.4 million in the urban area, Bucharest is one of the largest cities in Southeastern Europe. Bucharest is the 6th largest city in the European Union by population within city limits, after London, Berlin, Madrid, Rome, and Paris. 

This conference saw more than 250 attendees, representing more than 20 countries.  

ANEVAR is Europe’s oldest valuation society, founded in 1992.  They have held this conference annually for many years. The conference opened with greetings from President Dana Ababei, followed by Nick Talbot from IVSC.

IACVS was given time to present the Honorary Member award to Gheorghe Badescu, founder of ANEVAR.  Only the fourth recipient of this award, Gheorge had been a life-long contributor to both the institution of business valuation and the on-going conversation to develop and adopt common valuation theories and models to be used by all valuators around the world.

Technical topics that were presented included:

* Valuers of All Asset Categories by Anton Lezhja.  Anton discussed the need to evaluate the resources require to do a complete job of valuation, including property, machinery and equipment and intangibles.  Doing this analysis early in the engagement will lead to better management of completion dates and estimation of engagement fees.

* Early Stage Company Valuation by Diana Nikolaeva.  Diana described the challenges valuators face when engaged for early stage/start up valuations.  The difficulties arise from the different needs of stakeholders for M&A, financial reporting, the search for public information including comparables, and regulatory scrutiny.

* The Use of Multiples by Mauro Bini.  The market approach has always presented challenges for valuation.  How do you search for relevant data?  How should market multiples be adjusted or modified for specific engagements?  The task of the professional valuer is to remain topical and relevant.

* Using Black Scholes for Valuing Shares by Andrew Strickland.  Valuing company shares can be complicated by the needs and motivation of the enterprise and its shareholders.  Higher values can mean the promise of future rewards.  Lower values could be a disincentive to current and future employees.  Andrew discussed the options facing the valuator when using Black Scholes.

* Market Multiples and Incremental Risks by Jeff Tarbell.  This presentation described the similarities between the market and income approach.  In using market multiples, Mr. Tarbell describes how we can reduce the subjectivity in selecting market multiples.

* Evaluating Risk in Retail Property by Don Gilbert.  Mr. Gilbert presented his model for analyzing commercial retail rents in a relevant way as to be able to predict trends in future rental rates that would be sustainable for the near and long-term tenant.  Mr. Gilbert has created a clever computer template that adjusts suggested rental rates depending on historical rates, expected future economic trends, space availability and more.

* Transactional Asset Pricing Approach (TAPA) by Andrey Artemenkov.  Dr. Artemenkov presented a newer approach for valuing an enterprise using a combination of historical ratios and future economic measurements and predictions.  Current models usually assume that markets are efficient and will continue to be efficient into the future.  Dr. Artemenkov says a newer model is needed to allow for market imperfects that can reduce the tendency to overstate values.

The conference was followed by a gala banquet filled with awards, tributes performances and wonderful cuisine.  I am looking forward to attending future conferences in Bucharest!