International Valuation Standards explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The IBBI adopted the International Valuation Standards for IBC assignments by circular of 1 April 2026. Four of them do most of the work in an insolvency valuation, and each converts something that was once discretionary into a requirement.
IVS 101 — Scope of Work
IVS 101 governs the documented agreement that defines:
- the basis of value;
- the purpose of the valuation;
- the assets being valued;
- the valuation date;
- the assumptions adopted; and
- the extent of investigations.
The standard establishes that these elements are not optional — they must be agreed and documented before the valuation begins.
Almost every serious challenge to a valuation report is really a challenge to its scope. Was the right asset valued? On what basis? As at what date? On what assumptions? With how much investigation?
Settling those afterwards — or leaving them to be inferred from the report — is what makes a report indefensible, because the valuer is then explaining choices rather than pointing to a record of them. IVS 101 makes the scope a front-end document, which is also why the book devotes a full chapter to engagement architecture.
IVS 103 — the three approaches
IVS 103 requires the valuer to consider all three valuation approaches — income, market and asset — and to justify:
- the selection of the approach adopted; and
- the rejection of approaches not adopted.
The standard is explicit that mechanical reliance on a single approach without reasoning violates it.
The second limb is the one most often missed in practice. A report that explains why a discounted cash flow was used, and says nothing about why the market and asset approaches were not, has satisfied half the requirement.
IVS 201 and 202 — reporting and documentation
| Required element | What it answers |
|---|---|
| Basis of value | What kind of value is being reported |
| Purpose | Why the valuation was undertaken |
| Assumptions and limiting conditions | What was assumed and what was not examined |
| Methodology rationale | Why this approach and not the others |
| Key inputs | What drives the number |
| Adequate justification | Why the conclusion follows |
| Sensitivity analysis | How the conclusion moves if the inputs are wrong |
Sensitivity analysis is an expected element of a compliant report under these standards — not an enhancement offered in complex cases.
What the standards changed
The practical consequence, now embedded in Indian law through Rule 8 and the April 2026 circular, is that valuation reporting has shifted:
- from a narrative that explains what was done;
- to one that must also explain why it was done, why alternative approaches were not used, and what uncertainty attaches to the conclusions.
The emphasis across IVS 101, 102 and 103 falls on scope clarity, investigations, documentation, assumptions, methodology selection, reporting transparency and justification of conclusions — with adequate explanation of key inputs, limiting conditions and the analytical reasoning underlying the outcome.
Where Indian standards sit alongside the international valuation standards
Indian valuation practice has evolved through several standard-setting frameworks:
- valuation standards issued by the Institute of Chartered Accountants of India;
- internationally accepted valuation standards; and
- standards adopted by Registered Valuer Organisations.
Within the insolvency framework, the April 2026 circular settles the question for assignments under the Code: the International Valuation Standards apply, adapted to insolvency conditions.
Applying them in a distressed context
The adaptation required is not cosmetic. In a CIRP:
- the market approach struggles for comparables where the asset is distressed and the sale is forced;
- the income approach depends on projections for a business that may not be operating normally;
- the asset approach may understate an enterprise whose value now expressly includes synergies; and
- the valuation date is fixed at the insolvency commencement date regardless of when the work is done.
IVS 103 does not excuse the valuer from considering all three because they are difficult. It requires the difficulty to be reasoned and disclosed.
Common mistakes
- Documenting the scope of work after fieldwork has begun.
- Justifying the approach adopted without addressing those rejected.
- Omitting sensitivity analysis on the footing that it was not asked for.
- Applying the international valuation standards unmodified to a distressed asset.