'Uniform norms needed to value bankrupt cos' assets'

Uniform standards are needed to value assets of companies facing bankruptcy proceedings to ensure credibility and usefulness of the valuation reports given by professionals for debt resolution under the Insolvency and Bankruptcy Code (IBC), Insolvency and Bankruptcy Board of India (IBBI) chairperson Ravi Mital said in the bankruptcy regulator’s latest quarterly review.

- Gireesh Chandra

The IBC currently doesn’t prescribe an uniform valuation standard but valuation can be done only by registered valuers who follow internationally accepted valuation standards after physically verifying the assets.

There are two globally followed valuation standards from two independent agencies—International Valuation Standards Council (IVSC), a not-for-profit entity, and the Royal Institution of Chartered Surveyors (RICS), a professional body.

The rules notified under the Companies Act state that valuation standards are to be notified by the government and pending its notification, internationally accepted valuation standards adopted by any registered valuers organisations (RVO) need to be followed, Mital explained in the quarterly update. RVOs are entities recognized by IBBI.