Valuation Standards in India: IVS, ICAI and IBBI Explained

Valuers in India are often asked which standards they follow. The answer involves three names that appear again and again: IVS, ICAI and IBBI. They are not rivals. One is an international framework, one is a professional body's own standards, and one is the regulator that sets the rules for Registered Valuers. Understanding how they fit together helps you read a valuation report, and judge whether it was done properly.

Why Standards Matter

Valuation involves judgment, and two valuers can reach different numbers. Standards narrow that gap. They define terms such as fair value and market value, set out the accepted approaches, and say what a report must contain. A valuation that follows recognised standards is easier to explain to an auditor, a tax officer, a Tribunal or an investor.

IVS: The International Framework

IVS stands for International Valuation Standards. They are published by the International Valuation Standards Council (IVSC), an independent body based in London. IVS covers general principles, such as the basis of value, scope of work, valuation approaches and reporting, and also asset-specific standards for areas such as businesses, intangible assets, real property and financial instruments. The standards are updated periodically, so check that you are using the current edition.

IVS is not Indian law. It carries weight in India because the Registered Valuer rules allow valuers to follow internationally accepted valuation standards.

ICAI Valuation Standards

ICAI stands for the Institute of Chartered Accountants of India. ICAI issued its own set of Valuation Standards in 2018, drawing on international practice. They are organised in a series, broadly covering:

• Definitions and valuation bases: the terms and the bases of value used
• Valuation approaches and methods: the market, income and cost approaches
• Scope of work, analyses and evaluation: how the engagement is defined and the work carried out
• Reporting and documentation: what the report must state and what records must be kept
• Asset-specific standards: for business valuation, intangible assets and financial instruments

These standards are written for Indian practice and are mainly relevant to ICAI members. They are also adopted by the ICAI Registered Valuers Organisation for its valuer members.

IBBI: The Regulator

IBBI is the Insolvency and Bankruptcy Board of India. It does not primarily write technical valuation methodology. Its role is regulatory:

• It registers valuers under the Companies (Registered Valuers and Valuation) Rules, 2017
• It recognises and oversees Registered Valuers Organisations (RVOs)
• It sets the code of conduct and conditions that Registered Valuers must follow
• It can take disciplinary action for misconduct
• It issues circulars and guidelines on valuation practice

The Rules require a Registered Valuer to follow valuation standards. Until the Central Government notifies a set of valuation standards, the Rules provide that valuers follow internationally accepted standards, or the standards adopted by an RVO. Check the current position, because this is an area that can change.

How They Fit Together

A simple way to see it:

• IBBI is the rule-maker and regulator. It decides who may value and what conduct is required.
• RVOs adopt standards and monitor their members.
• IVS and ICAI standards are the technical reference points a valuer uses to do the work and write the report.
• Accounting standards such as Ind AS 113 define fair value for financial reporting and operate alongside them.

What This Means for a Valuation Report

A good report should state:

• Which standards it follows, such as IVS or the standards adopted by the valuer's RVO
• The basis or standard of value used, for example fair value or market value
• The valuation date and the purpose
• The approaches and methods applied, and why
• The key assumptions and limitations

Where a particular law requires a standard of value, such as the fair value and liquidation value under insolvency rules, the report should follow that law first.

Conclusion

When you receive a valuation report, check who signed it, whether they are a Registered Valuer where the law requires one, and which standards they say they followed. Look for clear statements of the basis of value, the method and the assumptions. Standards and rules are updated from time to time, so confirm the current position on the IBBI, ICAI and IVSC websites, or with a professional.