TaxTMI 
TaxTMI 
TaxTMI 
Valuation is a process in which an analyst uses a company's latest financial statements to determine its current or projected value. Many techniques are used during a valuation. Among other metrics, an analyst placing a value on a company looks at the business's management, the composition of its capital structure, the prospect of future earnings, and the market value of its assets.
Valuation is a quantitative process of determining the fair value of an asset, investment, or firm. A company can generally be valued on its own on an absolute basis or a relative basis compared to other similar companies or assets. Several methods and techniques can be used to arrive at a valuation, each of which may produce a different value.
Valuation is used in many aspects mainly in business transactions. The Insolvency and Bankruptcy Code, 2016 was enacted to reduce the distress of the companies. The Code contains the conduct of the process of corporate and insolvency resolution process and liquidation process. In both the processes the valuation of the assets of the corporate debtor plays a vital role and much useful to the Resolution Professional and Liquidator in their professional work.
Valuation under the Insolvency and Bankruptcy Code, 2016in India is a crucial, regulated process involving Registered Valuers to determine the Fair Value and Liquidation Value of a corporate debtor's assets. The primary goals are to ensure transparency, maximize asset value, achieve a timely resolution, and enable the Committee of Creditors to make informed decisions for a resolution plan or liquidation. The process involves the appointment of two Registered Valuers who conduct physical inspections and use recognized valuation methods to generate a comprehensive report.
Under the Indian Bankruptcy Code the Resolution Professional is mandated to appoint two registered valuers within seven days of their appointment to determine the fair value and liquidation value of the corporate debtor. These valuers must be registered with the Insolvency and Bankruptcy Board of India, and the cost of their appointment is considered a part of the overall insolvency resolution process cost. The appointment must occur within seven days from the Resolution Professional’s appointment, but not later than the 47th day from the insolvency commencement date. The valuers determine both the ‘fair value’ and the ‘liquidation value’ of the corporate debtor. If there is a substantial difference between the valuations provided by the initial two valuers, a third valuer may be appointed to provide another estimate, according to Regulation 35 of the Corporate Insolvency Resolution Process Regulations. The Insolvency and Bankruptcy Code provides three types of valuation – Plant and Machinery, Land and Building and Securities or Financial Assets.
The Registered Valuers are required to submit valuation reports in a sealed cover directly to the Resolution Professional. The report should be submitted via a secure, sealed method and used only for the legally authorized purpose of the Resolution Professional. The report should be submitted via a secure, sealed method and used only for the legally authorized purpose of the Resolution Professional.
Insolvency and Bankruptcy Board of India has been designated as an Authority under the Companies (Registered Valuers and Valuation) Rules, 2017 for registration, monitoring and development of valuers registered under the Rules read with section 247 of the Companies Act, 2013. The Board observed that the valuation reports submitted by the valuers to the Resolution Professionals are without any reference. Therefore, the Insolvency and Bankruptcy Board of India decided to provide a Valuation Report Identification Number for each valuation conducted under the Code.
In this regard, the Board issued acircular on 12.08.2024. Before submission, the Registered Valuer must generate a unique Valuation Report Identification Number for each valuation report using the online module developed by the Insolvency and Bankruptcy Board of India. The said circular provides that the Registered Valuer or the Registered Valuer Entity shall mention the Valuation Report Identification Number on the front page of the valuation report. This is to be complied with by the Valuers on or after 12.08.2024. The Registered Valuer must clearly mention the Valuation Report Identification Number on the front page of the valuation report. Resolution Professionals are directed not to accept any valuation reports that do not have a Valuation Report Identification Number.
Before the submission of valuation report, the respective Registered valuer/Registered Valuers’ Entity’s shall generate a unique Valuation Report Identification Number for each valuation report. The module has been hosted on the IBBI website at https://www.ibbi.gov.in. The Registered Valuer/Registered Valuer Entity shall access the module with the login credentials already provided by the Insolvency and Bankruptcy Board of India.
Valuer Report Identification Number can refer to different concepts, most commonly the Valuer Report Identification Number framework in business strategy, which analyses resources as Valuable, Rare, Inimitable, and Non-substitutable to determine potential for sustained competitive advantage. Valuer Report Identification Number is a unique number assigned to each valuation report. Valuer Report Identification Number is used to ensure the authenticity and trackability of valuation reports submitted under the Insolvency and Bankruptcy Code, 2016.