The IFRS Foundation and the International Valuation Standards Council have signed a joint statement of protocols for cooperating on International Financial Reporting Standards and International Valuation Standards in the area of fair value measurement.

The IVSC and the IFRS Foundation said Thursday they have a shared interest in the consistent measurement of fair value for financial reporting, noting that certain standards issued by the International Accounting Standards Board, which is overseen by the IFRS Foundation, use fair value as a measurement basis.

The IASB has also published IFRS 13, “Fair Value Measurement,” which sets out the principles for measuring fair value when it is required to be used in other financial reporting Standards. The IVSC has standards and guidance on fair value and other valuation measurement and facilitates collaboration and co-operation among its member organisations to help ensure consistent application.

The goal of the agreement is to ensure that both organizations are able to cooperate effectively in the fair value area, with each organization continuing to assume sole responsibility for their own standards.

“Fair value for the purposes of financial reporting is a challenging area with wide reaching implications,” IFRS Foundation chairman Michel Prada said in a statement. “We have already undertaken important work in this area, but in order to ensure that fair value is measured consistently we recognise the need to interact and exchange information with independent bodies, such as the IVSC, which share with us an interest in this area. The statement of protocols announced today represents a positive step towards achieving this enhanced level of co-operation within the financial reporting community.”

The statement of protocols signed by the two groups recognizes the nature of the present and continuing cooperation between the IVSC and the IFRS Foundation in developing standards and guidance on fair value measurement that will support financial statements prepared in accordance with IFRS. The agreement also identifies areas of mutually supportive work that each organization will undertake; and provides for continued future cooperation between the IVSC, the IFRS Foundation and the IASB.

“Strengthening the financial system requires the elimination of any significant differences in the way that fair value is understood, and consequently reported, between different sectors and markets,” said IVSC chairman Sir David Tweedie, who formerly chaired the IASB. “Close collaboration with bodies such as the IFRS Foundation will help to continue to improve standards and increase transparency, consistency and confidence in financial reporting. We look forward to working together.”

While chairing the IASB, Tweedie worked with the Financial Accounting Standards Board on converging fair value measurement standards in IFRS with U.S. GAAP in the wake of the financial crisis.

The full statement of protocols can be viewed here.