Recognising the need to have the consistent, uniform and transparent valuation policies and harmonise the diverse practices in use in India, Institute of Chartered Accountants of India at its 375th meeting has issued the Valuation Standards which are 1st of its kind in India. With a vision to promote best practices in this niche area of practice, the Standards lay down a framework for the chartered accountants to ensure uniformity in approach and quality of valuation output.
Among many other aspects, the standards includes, Framework for the Preparation of Valuation Report ; Valuation Bases, approaches and methods; Scope of Work, Analyses and Evaluations; Documentation and Reporting; Business Valuation ; Intangible Assets; Financial Instruments and more
The Valuation Standards have been issued by the Institute of Chartered Accountants of India to set up concepts, principles and procedures which are generally accepted internationally having regard to legal framework and practices prevalent in India.
Applicability of Valuation Standards:
• For Chartered Accountants providing Valuation Reports under various provisions of the Companies Act, 2013, compliance of these Valuation Standards is mandatory.
• For valuation under other Statutes, it is recommendatory to comply with these valuation standards. Chartered accountants are requested to comply with the same as a good practice.
In formulating the Valuation Standards, ICAI considered best valuation practices followed globally as well as in India, uniqueness of Indian conditions, current practices in India along with their advantages and disadvantages and various purposes for which valuations might be required over and above the requirements of Companies Act. These standards come as ICAI’s consistent drive to guide its members for ensuring high quality work and standards.