Valuation Services by A Chartered Accountant

Valuation services are among the most demanding services for Chartered Accountants and other professionals such as Company Secretaries, Cost Accountants, and Advocates. The importance of valuation services is often unknown to newly qualified Chartered Accountants.

 Let’s understand its scope:

A valuation report from an expert is required for various purposes, including asset transactions, security valuation for bank funding, tax purposes such as Transfer Pricing, and impairment testing for drawing up true and fair accounts.

A Chartered Accountant Valuation Certificate holds significant importance in numerous financial and commercial endeavors. This valuation certificate, crafted by competent chartered accountants possessing requisite expertise and authorization, serves the primary purpose of ascertaining the fair market value of diverse financial elements, encompassing assets, liabilities, businesses, and investments.

Companies are mandatorily required to audit their accounts as per Company law. In statutory audit, the overall accounts are checked and verified for any errors, and an auditor provides their opinion on their truth and correctness. The statutory audit report is a very crucial document as it represents a company’s worthiness.

On the other hand, valuation reports play a significant role in major decisions for companies, such as mergers and acquisitions, revival of insolvent companies, and liquidation. When a company seeks to extend its business and requires a loan from a bank or financial institution, it undergoes various valuations by a Chartered Accountant to assess its net worth and director’s net worth, among other factors.

If an investor intends to invest a substantial amount in a company’s shares, they may not fully rely on the company’s audited financial statements to assess earnings or earnings per share. While financials are audited properly, investors seek assurance regarding earnings per share, future profits, and share prices through a Share Price Valuation Report.

A Chartered Accountant Valuation Certificate is important for financial reporting, tax compliance, legal proceedings, insurance claims, business planning, and other purposes. This meticulous valuation process depends on established methods to guarantee a precise and unbiased portrayal of worth, offering essential direction for decision-making while adhering to regulatory and accounting norms.

ICAI provides certification on Valuation. The objective of the course is to Starting with the basic understanding about the term Value, the course runs through the key approaches of valuation discovering the underlying assumptions of various models, as well as best practices, and their applications in live cases. Once the operation knowledge is gained, the same would be applied to case studies. This is an intensive and comprehensive package of face-to-face sessions facilitated by experienced and renowned faculties. It covers the (1) Overview of Valuation which includes Introduction of Valuation and Valuation Analyses,  (2) Valuation Techniques, (3) Corporate Laws & Income Tax Implications & (4) Application of Valuation Techniques & Project Presentations.

This course has the vision to empower Chartered Accountants as leaders in the global service market.

Conclusion: Valuation reports are demanded by investors, lenders, stakeholders, transferors, transferees, and others involved in the transfer of tangible and intangible assets for various purposes which are major for making prominent decisions in any company and a Chartered Accountant has all the powers to execute it. Any Chartered Accountant, having three years of Post-Qualification experience as a Chartered Accountant can become a Registered Valuer. Now, a Chartered Accountant is not required to be a Graduate to become a Registered Valuer. It will empower the capabilities of a CA as a Valuer.