Last month, I was reviewing a valuation report submitted in an NCLT matter - a mid-sized manufacturing company going through CIRP. The report was technically compliant as of December 2025. But as of April 1, 2026, it would have been sent back. No explicit basis of value stated. No documented methodology rationale. Assumptions buried in a one-line footnote.
This is the new reality after IBBI Circular No. IBBI/RV/93/2026.
If you're a CA advising clients in insolvency proceedings or sitting on a committee of creditors, you need to understand what changed and why it matters to you directly.
What IBBI/RV/93/2026 Actually Says
On April 1, 2026, the IBBI notified the International Valuation Standards (IVS), as issued by the International Valuation Standards Council (IVSC), as the binding valuation standards for every valuation conducted under the Insolvency and Bankruptcy Code, 2016. This applies across CIRP, liquidation, voluntary liquidation, pre-packaged insolvency, and personal guarantor bankruptcy proceedings. No exceptions.
Before this circular, the standard phrase in IBC regulations was "internationally accepted valuation standards" - which, honestly, gave registered valuers enormous discretion. I've seen reports citing DCF, NAV, and market comparables in the same document without any explanation of why each method was weighted the way it was. Courts accepted them. Resolution professionals signed off. The system moved on.
That era is over.
IVS requires something more disciplined. Every report submitted in any IBC proceeding from April 1, 2026 must now explicitly state:
- Basis of Value - Fair Value or Liquidation Value, clearly defined per IVS 104
- Scope of Work - defined per IVS 101, including the purpose and intended use of the valuation
- Methodology Rationale - documented reasons for approach selection, including why alternative approaches were rejected
- Assumptions and Limiting Conditions - explicitly listed, not assumed to be "standard"
This is a meaningful shift. Under IVS, the valuer is not just calculating a number - they're constructing an argument. And that argument has to hold up to scrutiny.
Why This Matters to CAs (Not Just Registered Valuers)
Here's the question I get most often from CA colleagues: "Prateek, this is a registered valuer's problem, not mine."
It isn't. Let me explain why.
If you're advising a financial creditor sitting on a CoC, you will now receive IVS-compliant valuation reports. You need to know what to look for - and what to push back on. The difference between a Rs 45 crore fair value and a Rs 38 crore liquidation value is not just a footnote. It drives your bid expectations, your haircut calculations, and your recommendation to the client.
If you're advising the corporate debtor, the quality of the valuation report directly affects the resolution plan's credibility at NCLT. A poorly structured report - even if the number is defensible - can be challenged.
And if you're a practising CA with an IBBI registration as a valuer (Section 247 of the Companies Act, 2013 read with IBBI Registered Valuers (Appointment and Qualifications) Regulations, 2017), this circular directly governs your work.
A Quick Numerical Example: Fair Value vs Liquidation Value Under IVS
Let me walk through how this plays out in practice.
Say we have a company - let's call it Rajdhani Textiles Pvt. Ltd. - undergoing CIRP. It has:
- Plant and machinery (net book value): Rs 12 crore
- Inventory: Rs 3.5 crore
- Debtors: Rs 6 crore
- Land (owned, industrial zone, Faridabad): Rs 8 crore
Under IVS 104 - Fair Value (price in an orderly transaction between market participants):
The registered valuer would assess the plant's fair market value considering comparable industrial sales - say Rs 9 crore after functional obsolescence adjustment. Land at Rs 8 crore (market comparable, verified). Inventory at net realisable value: Rs 3 crore. Debtors after provision: Rs 4.8 crore.
Fair Value Total: ~Rs 24.8 crore
Under IVS 104 - Liquidation Value (amount from forced disposal under constrained timeline):
Same assets, but liquidation discount applied. Plant: Rs 5.5 crore (forced sale, limited buyer pool). Land: Rs 6 crore (timeline pressure). Inventory: Rs 2 crore. Debtors: Rs 3.5 crore (recovery uncertainty).
Liquidation Value Total: ~Rs 17 crore
The difference - Rs 7.8 crore - is not a rounding error. This gap is what determines whether a resolution plan is feasible versus liquidation being the better outcome for creditors. Under the new IVS mandate, the valuer must state which basis was applied and why. If the report says "Fair Value" but the methodology reflects forced-sale assumptions, that's now a compliance gap - not just a technical oversight.
The May 2026 Addition: One Valuer for MSMEs in Liquidation
Just weeks after the IVS circular, on May 20, 2026, IBBI notified the Liquidation Process (Third Amendment) Regulations, 2026. One change that hasn't got enough attention: MSME corporate debtors undergoing liquidation may now appoint a single registered valuer per asset class, rather than two (as required under the general Regulation 35 framework).
This matters for two reasons. First, it reduces costs for smaller insolvency estates where dual-valuer fees were disproportionate to the asset size. Second - and this is a practical point - when there is only one valuer, the responsibility for IVS compliance falls squarely on that individual. No averaging, no secondary check. The report stands alone.
For CAs advising MSME promoters or lenders in liquidation proceedings, this is worth flagging to clients early.
The Grey Areas Nobody Is Talking About
I'll be direct here: the IVS adoption creates some genuine ambiguity that the IBBI has not yet resolved.
IVS is a framework, not a prescriptive rulebook. It gives the valuer principles - not formulas. This is by design. But in the Indian insolvency context, where resolution professionals and NCLT benches are accustomed to receiving standardised formats, the shift to a principles-based standard creates interpretation risk.
For instance: IVS 200 (Businesses and Business Interests) allows for income approach, market approach, and asset approach - and permits the valuer to weight them based on "relevance and reliability." But the IBBI's older circulars on CIRP referred to both going concern and liquidation values as distinct mandated computations. There is now some tension between how IVS frames these methodologies and how IBBI's own CIRP regulations have historically operationalised them. The IBBI has not issued a reconciliation guidance note as of June 2026. I expect this will be clarified, but until then, the conservative approach is to document every methodological choice thoroughly.
In my experience working on CIRP valuations, the NCLT benches in Delhi and Mumbai have been increasingly attentive to methodology - not just the final number. This trend predates IVS adoption. The new standards give that scrutiny a formal framework.
What to Do Right Now If You're Involved in IBC Matters
A few practical steps worth taking immediately:
If you're a registered valuer, pull out your current report template and map each section against IVS 101 (Scope of Work), IVS 102 (Investigations and Compliance), and IVS 103 (Reporting). The gaps will be obvious. Most legacy templates in India don't have an explicit "basis of value" declaration at the top - add it now.
If you're advising a resolution professional, ask them whether their empanelled valuers have updated their report formats post-April 1. This is not a theoretical question. If an IVS-non-compliant report is challenged at NCLT, the RP is exposed.
If you're a CA member of a CoC, when you receive valuation reports going forward, check for: (a) explicit IVS compliance declaration, (b) stated basis of value, and (c) documented methodology rationale. These are your three minimum checkpoints.
The IVS mandate is a step in the right direction. Indian insolvency valuations have needed a more disciplined framework for years - anyone who has sat through CoC meetings where two reports diverge by 40% on the same asset knows this. But the transition period is real, and the ambiguities are real. Don't wait for NCLT to point them out.
The author is a Director at FinVal Research & Consultancy, an IBBI Registered Valuer firm based in New Delhi. FinVal specialises in business valuation, ESOP advisory, and transaction advisory. finvalresearch.in
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