Standards and Reporting
What this domain tests
Standards and reporting test whether your valuation is usable, defensible and auditable. A correct number in a defective report loses marks; a clear report with reasoned assumptions earns them.
Core rules
- The ICAI Valuation Standards (IVS) provide the reference structure: IVS 101 Scope of Work, IVS 102 Bases of Value, IVS 103 Valuation Approaches and Methods, IVS 104 Valuation Inputs, IVS 105 Valuation Models and IVS 106 Documentation and Reporting.
- The Companies (Registered Valuers and Valuation) Rules, 2017 and the IBBI regime govern registration, eligibility, independence and conduct. A valuer must not accept an assignment where a conflict of interest exists, and must keep records and client information confidential.
- A compliant report identifies the client, asset and rights, purpose, basis of value, valuation date, scope, method, key inputs, assumptions, limiting conditions, value conclusion and signature. Distinguish facts, assumptions and special assumptions.
- The report date and valuation date are different; the value speaks only as at the valuation date.
Worked example
A bank report states ₹8.0 crore with no basis, date or tenure. On review, the property is leasehold with 12 years remaining, let at a below-market rent. Recalculating the leasehold interest with the contracted rent and discounting over the remaining term indicates ₹6.2 crore. The correction is not a new opinion; the first report failed to describe the rights and assumptions, so its figure was not a market value of the asset actually charged.
Traps
Omitting the valuation date; failing to disclose a special assumption such as vacant possession; signing a report outside your competence; mixing market value and fair value; leaving out limiting conditions; not reconciling the methods used.