Valuation of Securities & Financial Assets by Registered Valuer

As per Section 247 of the Companies Act, 2013 Valuation of Property, Stocks, Shares, Debentures, securities & goodwill, or the net worth of a company by a Registered Valuer by an appointed committee which makes a true, impartial & fair value of Assets by considering the factors.

When considering Assets, under Financial Assets consist of bank deposits, bonds, and stocks, mutual funds. These are usually more liquid than other tangible assets like land/buildings & are traded on Financial Markets. 

The Valuations of Assets means determining the fair value of the said financial asset. Intrinsic Value is the fundamental method in determining the fair value of the financial asset by determining future cash flows. Valuation may be of various instruments such as stocks, debentures, shares, and mutual funds.

There are various steps to a Valuation by a Registered Valuer:

1) Gathering of Information: Obtaining Information from audited historical data & company overviews.

2) Information Analysis: Analysing of information from the data obtained & submitted before choosing the appropriate method of valuation 

3) Methods of Valuation: There are various methods of Valuation namely:

  • Income Approach: In this method, the discounted cash flows are taken into consideration
  • Market Approach: In this method, the price of goods & services that are purchased & sold in financial markets is used to determine the value of financial assets.
  • Asset Approach: In this method, the net realizable value of an asset on the sale of the asset, after removing the cost for sale is used, another method is where the net value of an asset is identified by removing total liabilities from total assets.

4) Reporting & Recommendations: After the methods are used to determine a range which gives us a rough idea of how much range is the value in there are recommendations & suggestions to improve & increase the overall value even further.

Factors affecting the Value or the Valuation of Securities & Financial Assets:

Various factors may influence the value of a security or a financial asset. These include Volatility of the market, past performance, corpus value, the performance of the asset, growth percentage, risk factor, management of the asset, and many more. So, it is always important to keep an eye on the financial asset a person or a company may invest in.

Conclusion:

It is always recommended that a corporation/company or a person shall get a valuation done by a Registered Valuer on Securities and Assets with specialization in this field with years of experience. That’s where ASC Consulting comes in, to provide a correct valuation with a proven track record & a huge range of clients that recommend our name in the industry.

Location: India

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