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Informist, Thursday, Feb. 26, 2026

 

NEW DELHI – The fair value of a debt-ridden company will include both tangible and intangible assets, along with their underlying synergies, stated the amendments passed in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. This will ensure that the value of the corporate debtor was captured in a holistic manner, thereby reflecting its true commercial worth and economic value, said the Insolvency and Bankruptcy Board of India in a press release.

 

The amendments were in line with a discussion paper issued by the board in November suggesting explicitly including intangible assets such as brands, intellectual property, customer relationships, knowhow, and goodwill in the fair value of a company going through the corporate insolvency resolution process. Increasingly, these assets are central to enterprise value across many sectors and will better reflect the value of a corporate debtor, the board had said in a discussion paper.

 

Currently, fair value means the estimated realisable value of assets of a corporate debtor if they were to be exchanged on the insolvency commencement date between a buyer and a seller in an arm's length transaction after proper marketing and where the parties acted knowledgeably, prudently, and without compulsion.

 

Further, the board passed amendments on registered valuer preparing a valuation report and maintaining such documentation for a company as per the format notified by through circular. This is intended to promote uniform disclosures, improved auditability, reduced disputes, and enhanced comparability across valuation reports, said the board. 

 

A framework for designating a coordinating valuer among the appointed registered valuers is passed for estimation of the fair value of the corporate debtor to ensure that enterprise-level consideration, including synergies and going-concern attributes, are appropriately reflected in the value of the company. This would enhance the robustness and credibility of valuation outcomes and strengthen the valuation ecosystem under the Insolvency and Bankruptcy Code, 2016 with the objective of enhancing the credibility, comparability, and reliability of valuations, said the board.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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