The Insolvency and Bankruptcy Board of India, through a circular dated April 1, 2026, mandated the International Valuation Standards (IVS) as the applicable framework for all valuations conducted under the Insolvency and Bankruptcy Code, 2016. The standards, issued and updated by the International Valuation Standards Council (IVSC), replace the previously fragmented domestic valuation approach and take immediate effect.
Background
Valuation is a critical input in insolvency resolution, directly influencing the evaluation of resolution plans, the assessment of fair value and liquidation value, and stakeholder decision-making. The IBC and its regulations require registered valuers to determine these values at multiple stages of the Corporate Insolvency Resolution Process and liquidation.
Until this circular, India's insolvency valuation framework lacked a unified standard. Registered valuers applied varying methodologies — some following the erstwhile Institute of Valuers guidelines, others adopting international approaches — resulting in inconsistent valuations that frequently became the subject of litigation before the NCLT and NCLAT.
The IVSC, a global standard-setting body, publishes the International Valuation Standards, which are adopted in over 100 jurisdictions and provide a comprehensive framework covering general standards, asset-specific standards, and valuation applications.
Key Provisions
The circular establishes the following framework:
Universal application: All valuations under the IBC and its regulations, including CIRP, liquidation, voluntary liquidation, and personal insolvency proceedings, must be conducted in accordance with IVS.
Dynamic updating: The standards apply "as issued and updated from time to time by the IVSC," meaning that future revisions to IVS will automatically apply to IBC valuations without requiring a fresh IBBI notification.
Immediate effect: Compliance is required from April 1, 2026, for all new valuations. Pending valuations initiated before this date may continue under the existing methodology but must note any deviations from IVS.
Comprehensive coverage: IVS covers general valuation concepts, valuation approaches (market, income, and cost), asset-specific standards for intangible assets, plant and equipment, real property, and financial instruments, and application standards for financial reporting and insolvency purposes.
Implications for Practitioners
Registered valuers must familiarise themselves with IVS methodology and reporting standards. The transition requires updating valuation report templates, adopting IVS-prescribed scope of work documentation, and ensuring that all assumptions, approaches, and conclusions comply with the international framework.
For resolution professionals and Committee of Creditors members, the adoption of IVS introduces greater consistency and comparability in valuation reports. This may reduce disputes over valuation methodology at the NCLT and NCLAT, as the standard provides a globally recognised benchmark against which valuation reports can be assessed.
Corporate lawyers advising resolution applicants should factor in the IVS-compliant valuation methodology when structuring resolution plans. The standardised approach may alter how fair value and liquidation value are computed, potentially affecting the minimum threshold for resolution plan offers.
Frequently Asked Questions
Can NCLT or NCLAT reject a valuation report that does not comply with IVS?
Yes. Since the IBBI circular mandates IVS compliance for all IBC valuations from April 1, 2026, a valuation report that does not follow IVS methodology could be challenged before the Adjudicating Authority as non-compliant with the applicable regulatory framework. The tribunal may direct a fresh valuation or give the registered valuer an opportunity to cure deficiencies.
Does IVS mandate specific valuation methods or approaches?
IVS does not prescribe a single method. It provides a framework covering three approaches — market, income, and cost — and requires the valuer to select the most appropriate approach based on the nature of the asset, the purpose of valuation, and the availability of data. The valuer must justify the approach chosen and disclose any limitations in the report.