Valuation is a critical aspect of financial and corporate affairs, ensuring that assets and liabilities are accurately assessed. In India, this process has become more structured and reliable with the introduction of Registered Valuers under the Insolvency and Bankruptcy Board of India (IBBI). The establishment of Registered Valuers aims to enhance the transparency and standardization of valuations, aligning them with international practices. This move has been pivotal in addressing the arbitrary valuation methods that previously cast doubts on the credibility of asset and liability assessments.
Understanding Registered Valuers
Registered Valuers are professionals who have been authorized by the Insolvency and Bankruptcy Board of India to conduct valuations of company assets and liabilities. They play a significant role in various corporate activities, including mergers and acquisitions, insolvency proceedings, and capital restructuring. To become a Registered Valuer, an individual or entity must meet certain qualifications and experience requirements, pass an examination, and be registered with the IBBI. This ensures that only competent professionals are entrusted with the responsibility of valuing complex assets.
The Importance of Standardizing Valuation
The standardization of the valuation process is crucial for maintaining the integrity of financial systems. Before the implementation of the Companies (Registered Valuers and Valuation) Rules, 2017, there was no uniformity in how valuations were conducted. This often led to inconsistent and unreliable valuations, affecting the decision-making process of investors, creditors, and other stakeholders. With standardized procedures, stakeholders can have greater confidence in the reported values of assets and liabilities, leading to more informed and fair financial transactions.
Current Statistics of Registered Valuers in India
As of the end of March, India has seen a significant rise in the number of professionals and entities becoming Registered Valuers. The total count stands at 3,967 Registered Valuers, out of which only 40 are registered entities, with the remainder being individuals. This number reflects the growing recognition of the importance of accurate valuations and the increasing demand for qualified valuers in the country’s burgeoning economy.
Role of Registered Valuers in Corporate Affairs
The role of Registered Valuers extends beyond mere assessment of assets and liabilities. They are integral to ensuring fairness and accuracy in financial reporting, taxation, and legal compliance. Their expertise is often sought in situations requiring impartial and objective valuation opinions, such as during disputes or when determining the value of collateral for secured lending. Registered Valuers also contribute to enhancing corporate governance by providing independent assessments that help protect the interests of shareholders and other stakeholders.
Challenges and Opportunities
Despite the progress made, the field of valuation in India faces challenges such as a limited pool of qualified valuers and the need for continuous professional development to keep pace with evolving global standards. However, these challenges also present opportunities for professionals seeking a career in valuation. As the economy grows and the market for valuation services expands, there is a significant potential for new entrants to gain expertise and contribute to the field.
In conclusion, the establishment of Registered Valuers under the supervision of the IBBI has marked a transformative step in the valuation landscape of India. It has brought about much-needed standardization and reliability, thereby fortifying the trust in financial assessments and supporting the overall growth and stability of the corporate sector.
