PURPOSES OF VALUATION
3 MARKS FOR THE IBBI VALUATION EXAMINATION
RELEASED FOR IBBI ASPIRANTS
Valuation plays a critical role in various financial, legal, and regulatory frameworks. In the context of the Insolvency and Bankruptcy Board of India (IBBI) valuation examination, the purpose of valuation is multifaceted. Here are three key purposes of valuation:
- Regulatory Compliance: Valuation is essential for ensuring compliance with the Insolvency and Bankruptcy Code (IBC), which mandates fair and accurate valuations during insolvency proceedings. It helps determine the fair market value of assets to ensure equitable distribution among creditors.
- Investment Decisions: Valuation assists investors, stakeholders, and financial institutions in making informed decisions. Accurate valuation helps assess the worth of a company, its assets, or liabilities, guiding investment, mergers, acquisitions, or asset restructuring.
- Dispute Resolution: In cases of financial disputes, be it between shareholders, partners, or creditors, valuation serves as an objective tool to resolve differences over asset worth. This is particularly useful in cases involving business divorces, exit strategies, or legal proceedings.
IBBI Valuation Examination: Key to Ensuring Fair and Transparent Insolvency Proceedings
In the dynamic and complex world of corporate finance, accurate valuation is crucial for safeguarding the interests of all parties involved, especially during insolvency proceedings. As per the Insolvency and Bankruptcy Code (IBC) introduced by the Government of India, insolvency professionals must conduct valuations to assess the fair value of assets during a corporate restructuring or liquidation process.
The Insolvency and Bankruptcy Board of India (IBBI) has set forth guidelines and procedures to ensure valuations are conducted impartially, accurately, and transparently. For aspirants to the IBBI valuation examination, understanding the nuances of regulatory frameworks and the critical role of a certified valuer in the resolution process is paramount.
Through its recently released video, CEV aims to educate aspirants about the key skills and knowledge required to perform valuations accurately, reinforcing the importance of upholding legal and regulatory compliance in insolvency proceedings. This educational initiative is expected to raise awareness about the necessity of skilled professionals who can provide reliable, unbiased valuations to benefit creditors, stakeholders, and the overall economy.
