Posted in Finance, Accounting and Economics Terms, Total Reads: 513
Definition: Valuation Procedure
Valuation is the process of estimating the value of anything which incurs some value. Valuation is generally carried on financial assets and liabilities. Financial assets are securities such as stocks, business enterprises, trademarks, etc. and liabilities such as bonds issued by the company.
Valuations are required or done for financial reporting, investment analysis, capital budgeting, mergers and acquisitions transactions, tax events such as to know tax liability and in litigation.
Steps of valuation procedure are:
Valuation by independent valuer: This process is carried on the assets and liabilities for the respective SOEs that are prepared by enlisted valuer firm.
Review of the Valuation Committee: In this the valuation report submitted by the valuer enlisted firm is examined by the Valuation Committee that includes the Ministry of Finance and the Concerned Board of the company.
Re valuation: After reviewing the report by the Committee, it is again send for revaluation, in case of discrepancy. Otherwise it is treated as a final report.
Valuation Report and Enterprise Profile: After finalization, tenders are invited. Valuation report and Enterprise Profile can give the entire information about the enterprise.