Valuation under IBBI Code

Regulation:27. Appointment of registered valuers
The interim resolution professional shall within seven days of his appointment, appoint two registered valuers to determine the liquidation value of the corporate debtor in accordance with Regulation 35:
Provided that the following persons shall not be appointed as registered valuers:

a relative of the interim resolution professional;
a related party of the corporate debtor;
an auditor of the corporate debtor in the five years preceding the insolvency commencement date; or
a partner or director of the insolvency professional entity.

Regulation 35. Liquidation value
Liquidation value is the estimated realizable value of the assets of the corporate debtor if the corporate debtor were to be liquidated on the insolvency commencement date. Liquidation value shall be determined in the following manner:

the two registered valuers appointed under Regulation 27 shall submit to the interim resolution professional or the resolution professional, as the case may be, an estimate of the liquidation value computed in accordance with internationally accepted valuation standards, after physical verification of the inventory and fixed assets of the corporate debtor;
if in the opinion of the interim resolution professional or the resolution professional, as the case may be, the two estimates are significantly different, he may appoint another registered valuer who shall submit an estimate computed in the same manner; and
the average of the two closest estimates shall be considered the liquidation value.

Regulatory Reporting Support

Valuation for transactions between resident shareholder and non-resident shareholder and vice versa where the report is filed with RBI under FEMA regulations
Valuation for submission to tax authorities in connection with withholding tax/capital gain tax
Valuation for Transfer Pricing

Under Companies Act

Allotment of Securities for other than Cash

Section 39 (4) of Companies Act 2013 and Rule 12 (5) of Companies (Prospectus and allotment of Securities) Rules, 2014. A report of a registered valuer in respect of valuation of the consideration shall also be attached along with the contract as mentioned in sub-rule (3) and sub-rule (4).

Issue of Sweat Equity Share

Section 54 (1) of Companies Act 2013 and Rule 8- Issue of Sweat Equity of Companies (Share Capital and Debentures) Rules, 2014
Rule 8 (6) The sweat equity shares to be issued shall be valued at a price determined by a registered valuer as the fair price giving justification for such valuation.
Rule 8 (7) The valuation of intellectual property rights or of know how or value additions for which sweat equity shares are to be issued, shall be carried out by a registered valuer, who shall provide a proper report addressed to the Board of directors with justification for such valuation.

Audit Support

Valuation services may be required by private equity and venture capital entities for reporting to their investors or for accounting purposes
Depreciable amount estimated useful life and estimated scrap value.

Financial Reporting Purpose under IND AS

Purchase price allocation per requirement of Ind AS 103/ IFRS 3
Impairment analyses for goodwill, other intangibles and long-lived assets per Ind AS 36/ IFRS 36
Valuation of employee stock options and restricted stock awards per Ind AS 102/ IFRS 2
Valuation of financial instruments encompassing derivatives, structured products, foreign currency convertible bonds and preferred stock
Valuation of guarantees and indemnifications
Valuation and structuring of contingent consideration

Chartered Accountants
IBA Forensic Auditors

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Services under IBBI

Under IBBI Code

As per rule 27 of the insolvency regulations “INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016”