Registered Valuer
- November 24, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
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Registered Valuer
Subject: Economy
Context:
Centre issued the Companies (registered valuers and valuation) Amendment Rules 2022 for the valuation entity.
Details:
- It seeks to clarify the standards used by the valuers to conduct valuations.
- No partnership entity or company shall be eligible to be a registered valuer if it is not a member of a registered valuer organization
- Entities cannot be registered with more than one valuer organization at a given time.
- A partnership or company registered as a valuer will get six months to comply with the new rules
- Valuers may follow either the internationally accepted valuation standards or valuation standards adopted by a registered valuer organization.
- A registered valuer will not be allowed to take up employment but can hold the designation of whole-time directors.
- Registered valuers have to intimate IBBI about any change in their internal structure and changes in the partners and directors, its charter or partnership agreement.
Concept:
What is a registered valuer?
- The concept of registered valuer was introduced in the Companies Act in 2017 and before it, valuation was done in an arbitrary manner, often leading to question marks over the authenticity of the valuation.
- Presently, a registered valuer is an individual or entity which is registered with the Insolvency and Bankruptcy Board of India (IBIBI) as a valuer in accordance with the Companies (Registered Valuers and Valuation) Rules, 2017.
- Under Section 458 of the Companies Act, IBBI has been specified as the authority by the central government.
- It regulates the valuation of assets and liabilities linked to a company and to standardize the valuation procedure in line with global valuation standards.
- It plays an important role in corporate restructuring, mergers and acquisitions, and bankruptcy resolutions. Such transactions are dependent on the assessment of these assets and liabilities and are key to due diligence.
- Who can become a registered valuer?
- An individual needs to clear the Valuation Examination conducted by IBBI.
- For what assets can a registered valuer undertake valuation?
- Registered valuer can get themselves registered for valuation of assets such as land and building; plant and machinery; and securities and financial assets.
- They can undertake valuation of only the assets for which they have got the registration.
Registered valuer organizations:
The organisation conducts following functions:
- conducts educational courses in valuation.
- grants membership or certificate of practice to individuals, who possess the qualifications and experience in respect of valuation of asset class.
- conducts training for the individual members before a certificate of practice is issued to them.
- lays down and enforces a code of conduct for valuers who are its members.
- provides for continuing education of individuals who are its members.
- monitors and reviews the functioning, including quality of service, of valuers who are its members.
- address grievances and conduct disciplinary proceedings against valuers who are its members.