ICAI Valuation Standards 2018
Eight standards, one effective date, and the points in them that exam questions quote.
The ICAI Valuation Standards 2018 are eight standards plus a framework, issued by ICAI's Valuation Standards Board together with the ICAI Registered Valuers Organisation. Each standard applies to valuation reports issued on or after 1 July 2018.
Their authority for a registered valuer comes from rule 8(1) of the Registered Valuers Rules. The Central Government has power under rule 18 to notify valuation standards; until it does, a valuer may follow internationally accepted standards or the standards adopted by any RVO. ICAI's own publication says these standards apply until standards are notified under rule 18.
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The Eight Standards
VS 101
Title
Definitions
What it settles
Common terms used across the set
VS 102
Title
Valuation Bases
What it settles
Fair value, participant specific value, liquidation value; five premises of value
VS 103
Title
Valuation Approaches and Methods
What it settles
Market, income and cost approaches; DCF, CCM, CTM, relief from royalty, MEEM, replacement and reproduction cost
VS 201
Title
Scope of Work, Analyses and Evaluation
What it settles
Engagement terms and the work done before concluding
VS 202
Title
Valuation Report and Documentation
What it settles
Minimum report content, management representations, record keeping
VS 301
Title
Business Valuation
What it settles
Valuing a business or business ownership interest
VS 302
Title
Intangible Assets
What it settles
Brands, technology, customer relationships and similar assets
VS 303
Title
Financial Instruments
What it settles
Debt, equity and derivative instruments
| Standard | Title | What it settles |
|---|---|---|
| VS 101 | Definitions | Common terms used across the set |
| VS 102 | Valuation Bases | Fair value, participant specific value, liquidation value; five premises of value |
| VS 103 | Valuation Approaches and Methods | Market, income and cost approaches; DCF, CCM, CTM, relief from royalty, MEEM, replacement and reproduction cost |
| VS 201 | Scope of Work, Analyses and Evaluation | Engagement terms and the work done before concluding |
| VS 202 | Valuation Report and Documentation | Minimum report content, management representations, record keeping |
| VS 301 | Business Valuation | Valuing a business or business ownership interest |
| VS 302 | Intangible Assets | Brands, technology, customer relationships and similar assets |
| VS 303 | Financial Instruments | Debt, equity and derivative instruments |
Points the Standards State Precisely
- Three bases, not more
- VS 102 defines fair value, participant specific value and liquidation value. Market value, investment value and equitable value are IVS terms; fair value 'is usually synonymous to market value' under VS 102.
- Statute overrides the standard
- VS 102 does not apply where a statute, regulation or agreement prescribes the basis, giving the Income-tax Act, SEBI regulations and the IBC as examples. The prescribed basis applies, with enough disclosure for users to understand it. The Preface adds that where a standard and the law differ, the law prevails.
- Fair value and costs
- Fair value is not adjusted for transaction costs (VS 102). Liquidation value is a net amount, after the estimated cost of disposal.
- Combining approaches
- VS 103 allows one or several approaches, but if their results differ significantly, the final value should not be reached merely by weighting them. The valuer has to work out why they differ.
- Management representations
- VS 202 lets a valuer obtain written representations from management and requires the report to say so, but a representation letter does not excuse the valuer from applying skill and care to that information.
- Bold and plain type
- Bold paragraphs state the main principles, but plain and bold paragraphs have equal authority.
ICAI Standards Next to the Rules and IVS
Which standard applies depends on the purpose of the valuation.
| Situation | Standards that apply |
|---|---|
| Valuation under the Companies Act by a member of an RVO that has adopted ICAI standards | ICAI Valuation Standards, under the proviso to rule 8(1) |
| Valuation under the IBC and its regulations (CIRP, liquidation, pre-pack and others) | International Valuation Standards, notified by IBBI's circular of 1 April 2026 |
| Valuation where a statute prescribes the method (for example a tax rule) | The prescribed method; the standard yields to it |
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Records: Eight Years Here, Three Years in the Rules
VS 202 says valuation documentation is ordinarily kept for not less than eight years from the date of the report. The Model Code of Conduct and rule 7(f) set three years. Both can be right for one valuer at the same time: the longer period governs a report that claims compliance with the ICAI standards.
How the Valuation Examination Tests This
- check_circleMatching numbers to titles: VS 102 is bases, VS 103 approaches, VS 202 reporting, VS 301-303 asset-specific. The trap is VS 201 versus VS 202.
- check_circleEffective date: reports issued on or after 1 July 2018, not 2017 (the year the Rules came in).
- check_circleLists of bases: candidates who mix IVS and ICAI terms pick 'investment value' or 'market value' as an ICAI basis.
- check_circleSince 1 April 2026, IBC valuations follow IVS, not ICAI standards. This sits inside the 30 June 2026 law cut-off.
FAQs
Are ICAI Valuation Standards mandatory for registered valuers?expand_more
Not by direct notification. Rule 8(1) lets a registered valuer follow internationally accepted standards or the standards adopted by any RVO until the Central Government notifies standards under rule 18. A report that says it complies with the ICAI standards must meet every relevant requirement in them.
How many ICAI Valuation Standards are there?expand_more
Eight in the 2018 set: VS 101, 102 and 103; VS 201 and 202; and VS 301, 302 and 303, plus a Preface and a Framework for the preparation of valuation reports.
What is the difference between fair value and participant specific value?expand_more
Fair value is the exit price between market participants in general. Participant specific value reflects advantages or disadvantages that only the owner or an identified buyer has, such as synergies available to that buyer alone.
Do ICAI Valuation Standards apply to IBC valuations?expand_more
No longer. IBBI's circular of 1 April 2026 notified the International Valuation Standards for all valuations under the IBC and its regulations.
Next steps
- IVS 2025arrow_forward
- Bases of Valuearrow_forward
- Valuation Approachesarrow_forward
- Report Writingarrow_forward
Timed and scored, with negative marking.