First Notes - 1 August 2018

First Notes - 1 August 2018

Indian Valuation Standards issued by the ICAI


On 18 October 2017, the Ministry of Corporate Affairs (MCA) notified Section 247 of the Companies Act, 2013 (2013 Act). The section lays down provisions relating to valuation by registered valuers. On the same day, the Companies (Registered Valuers and Valuation) Rules, 2017 (Rules), were also issued by MCA. These Rules, inter alia, provide that the valuation standards would be notified by the Central Government (CG) on the recommendation of the committee set up for this purpose.

On 10 June 2018, the Institute of Chartered Accountants of India (ICAI) issued the preface to the Indian Valuation Standards (Ind VS), the Framework for the preparation of valuation report in accordance with the Ind VS and also the following eight Ind VS applicable for all valuation engagements under the 2013 Act:

  • Ind VS 101, Definitions
  • Ind VS 102, Valuation Bases
  • Ind VS 103, Valuation Approaches and Methods
  • Ind VS 201, Scope of Work, Analyses and Evaluation
  • Ind VS 202, Reporting and Documentation
  • Ind VS 301, Business Valuation
  • Ind VS 302, Intangible Assets
  • Ind VS 303, Financial Instruments.

Effective date of Ind VS

Ind VS are effective from 1 July 2018 till the time valuation standards are notified by the CG.

Ind VS would be applied for the valuation engagements carried out in accordance with the provisions of the 2013 Act.

In respect of valuation engagements under other statutes like the Income-tax Act, 1961 (IT Act), Securities and Exchange Board of India (SEBI), Foreign Exchange and Management (FEMA), Reserve Bank of India (RBI) etc., these Ind VS are recommendatory in nature.

This edition of First Notes focusses to provide an overview on significant aspects of Ind VS and also highlights where Ind VS differs from Ind AS.

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