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Valuation Standards
By
R. K. Patel
M.E. (Mech.), FCMA, M.Sc. (Real Estate Valuation), Dip. In Business Valuation, MIE, FIV, FIIISLA, Chartered Engineer (I),
Insolvency Professional (IBBI)
Presentation at
at
Bengaluru
November 23-24, 2018
Objectives
• Explain the principles that apply to valuations of
tangible assets prepared for use in financial
statements and related accounts of business
entities;
• Discuss accounting concepts and principles
underlying the relevant International Valuation
Standards (IVSs) viz-a-viz Indian Accounting
Standards (IndASs) for Valuation
• Study fair value measurement concepts and
valuation methods for financial reporting under
relevant IndASs.
December 29, 2017 R. K. Patel 2
Financial Reporting under Companies Act, 2013
• International Valuation Standards (IVSs) facilitate cross-
border transactions and the viability of global markets
through harmonisation and transparency in financial
reporting.
• Indian Accounting Standards (IndASs) notified under
the Companies Act 2013 are converged to the
International Financial Reporting Standards (IFRSs)
• Valuer’s adherence to market-based definitions,
objectivity, and full disclosure of relevant matters are
fundamental to the requirements of valuation for
financial reporting
December 29, 2017 R. K. Patel 3
Financial Reporting under Companies Act, 2013
• Valuers have been recognised as Experts in the
Companies Act, 2013
• Valuations under the Companies Act are required
to be carried out by only Registered Values
under the Companies Act 2013
• Act provides that the valuations are required to
be carried out as per the International Valuation
Standards or the Standards in force in India, till
Indian Valuation Standards are notified
• Valuation standards
– IVSC publishes IVSs
– RICS Red Book
Under IndAS 29
Disrupted Markets: When markets are disrupted or
suspended, Valuers must be vigilant in their analyses as
explained in IVS.
Under IndAS 29, Financial Reporting in Hyperinflationary
Economies, Valuers may be required to assess balance sheet
value.
December 29, 2017 R. K. Patel 26
Other Valuation Requirements
Under IndAS 38
Intangible Assets
Identification of Intangible Asset – Separable
and Contractual
Internally Generated Goodwill and Internally
Generated Intangibles
Cost Model and Revaluation Model
Useful Life and Residual Value of Intangible Asset
Depreciable Amount and Amortisation of
Intangible Assets
Impairment Loss
Subject to Audit
Subject to Penal Clauses under the
Companies Act
Calls for Multidisciplinary Approach
Disclaimer
This theory and practical cases presented here are intended for general
information purposes only and is not intended to provide, and should not
be used in lieu of, professional advice. The author/ presenter assumes no
liability for readers’ use of the information herein and readers are
encouraged to seek professional assistance with regard to specific matters.
Any conclusions drawn or opinions given are based on the individual facts
and circumstances of a particular matter and therefore may not apply in
other matters. All opinions expressed in this article/ presentation are those
of the authors/ presenters and do not necessarily reflect the views of the
author/ presenter.
THANKS
It’s a presentation by
R. K. PATEL
M.E. (Mech.), FCMA, M.Sc. (Real Estate Valuation), Dip. In Business Valuation, MIE, FIV, FIIISLA,
Chartered Engineer (I), Insolvency Professional (IBBI)