Valuation Services
A valuation is an opinion on the value of a business, shares or another asset at a stated date and for a stated purpose. Chirde and Associates, Chartered Accountants, prepares valuation workings and reports for transactions, tax, FEMA and financial-reporting purposes, with the method and assumptions set out in writing. Our valuation reports follow the ICAI Valuation Standards where they apply. Some valuations must, by law, be carried out by a Registered Valuer, as explained below.
Valuations required under certain provisions of the Companies Act, 2013, for example for certain allotments of shares and certain mergers and demergers, must be carried out by a Registered Valuer under the Companies (Registered Valuers and Valuation) Rules, 2017, which are administered by the Insolvency and Bankruptcy Board of India (IBBI).
The firm undertakes such work only where it holds the required registration. Otherwise it supports the assignment with data and workings and coordinates with a Registered Valuer of your choice. Please verify the provision that applies to your case.
Valuation for transactions, tax and reporting
- Valuation for transactionsValuation of businesses, shares and securities for sale, purchase, fundraising, mergers and restructuring, with the basis of value stated.
- Income tax valuationFair market value of unquoted shares and other assets for provisions of the Income-tax Act, 1961 (and the corresponding provisions of the Income-tax Act, 2025), as per the rules prescribed. Where the rules require a merchant banker's report, we coordinate with one.
- FEMA and RBI pricingValuation certificates for issue or transfer of shares between residents and non-residents, where the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 prescribe a pricing method and a certificate from a Chartered Accountant or another specified professional.
- ESOP valuationFair value of shares and options for employee stock option plans, for accounting and tax workings, coordinating with a merchant banker where the rules prescribe one.
- Purchase price allocationData and workings to support the allocation of acquisition cost to assets acquired and liabilities taken over, and the related financial reporting.
- Valuation methodsDCF (projected cash flows brought to present value), comparable company and transaction multiples, and net asset value, chosen according to the purpose and the data available.
- Valuation reportsA written report stating the purpose, valuation date, information relied on, methods applied, assumptions and limiting conditions.
- Support to Registered ValuersPreparation of financial data, projections and workings where the law requires the valuation to be signed by a Registered Valuer.
From purpose to written report
Define the purpose and date
We confirm what the valuation is for, the valuation date, the standard of value, and whether the law prescribes a particular valuer, method or format for that purpose.
Collect and review information
We obtain financial statements, projections, share capital details, agreements and tax records, and discuss the business and its outlook with management.
Apply and cross-check methods
Suitable methods are applied and their results compared. The reasons for relying on one method, or for weighting several, are recorded in the working papers.
Report and discuss
A written report is issued with its assumptions and limitations and discussed with you. It is meant for the stated purpose and should not be used for another purpose without consulting us.
When a valuation is needed
- Owners and promoters planning to sell, buy or bring in an investor for a business
- Companies issuing, transferring or buying back shares, including to or from non-residents
- Entities considering a merger, demerger or other restructuring
- Shareholders who need the fair market value of unquoted shares for a tax provision
- Companies introducing or administering an employee stock option plan
- Businesses that need valuation workings for an acquisition or for financial reporting
Frequently asked questions
Why can valuations of the same business differ?
Value depends on the purpose, the valuation date, the standard of value used, the information available and the assumptions made. A value worked out for a negotiated sale may differ from a value computed under a tax rule. For this reason a report states its purpose and should be read only for that purpose.
Which methods are used to value a business or shares?
There are three broad approaches: the income approach (for example the DCF method, which brings projected cash flows to present value), the market approach (comparable companies or transactions) and the asset approach (net asset value). The choice depends on the nature of the business and the data available. For some purposes, the applicable rules themselves prescribe the method.
Is a Registered Valuer always required?
No. It depends on the purpose. Certain provisions of the Companies Act, 2013 require a valuation by a Registered Valuer registered under rules administered by the IBBI. The firm undertakes those assignments only where it holds the required registration, and otherwise coordinates with a Registered Valuer. Please verify the requirement for your case against current law.
How are unquoted shares valued for income tax and FEMA purposes?
The Income-tax Rules and the FEMA regulations prescribe methods, or accepted pricing approaches, and in some cases the type of professional who must certify the value. These provisions are amended from time to time, so please verify against current law. We can explain which one applies to your transaction.
Can the valuation be worked to a figure needed for a transaction?
No. A valuation is an independent conclusion reached from the information, methods and assumptions recorded in the report. We do not work towards a figure fixed in advance, and the conclusion cannot be known before the work is done.
Discuss a valuation requirement
To discuss a valuation requirement, write to us at enquiries@chirdeassociates.in or visit our Nagpur or Yavatmal office.