Business Valuation Report
CORPORATE AFFAIRS STANDARD (CAS) -1
(Issued by the Institute of Chartered Accountants of India)
Business Valuation
Page 1 of 62
Business Valuation Practise Standard TABLE OF CONTENTS CHAPTER I - PREAMBLE
1.1 Background……………………………………………………………………… …………………4
1.2 Purpose & Objective of the Standard…………………………………………………….5 1.3 Introduction and Scope of the Standard………………………………………………....7 1.4 Exceptions from the Standard…………………………………………………………….9
CHAPTER II – QUALITATIVE AND ETHICAL STANDARDS……………………..11
CHAPTER III – VALUATION SERVICES 3.1. Valuation Engagement……………………………………………………………..…….16 3.2. Calculation Engagement………………………………………………………..………..17
CHAPTER IV - OVERALL ENGAGEMENT CONSIDERATIONS
4.1 Terms of Engagement (TOE)……………………………………………………………...18 4.2 Nature and Risk in Engagement……………………………………….…………………20 4.3 Assumption, Limiting conditions.………………………………………………………..21 4.4 Scope Restriction and limitations………………………………………………………...21 4.5 Hypothetical Conditions…………………………………………………………………..22 4.6 Using work of expert………………………………………………………………...…….22
CHAPTER V – DEVELOPMENT STANDARDS 5.1. Valuation Bases (standard of Value) and Premise………………………………….…25 5.2. Analysis of the subject interest…………………………………………………………..26 5.3. Financial Statement Adjustments……………………………………………………….31 5.4. Applying valuation approaches and methods…………………………………………32 5.5. Valuation adjustments……………………………………………………………..……..41 5.6. Conclusion of value……………………………………………………………………....43 5.7. Subsequent Events………………………………………………………………………..46 5.8. Documentation……………………………………………………………………………47 Page 2 of 62
Business Valuation Practise Standard
CHAPTER VI – REPORTING STANDARDS…………………………………………….49 6.1. Detailed Valuation Report.………………………………………………………………51 6.2. Summary Valuation Report……….….………………………………………………….62 6.3. Calculation Report……….………………………………………………………………..64
EFFECTIVE DATE……….……………………………………………………………………66
Appendix A: Glossary of Business Valuation
(Issued by the Institute of Chartered Accountants of India)
Business Valuation
Page 1 of 62
Business Valuation Practise Standard TABLE OF CONTENTS CHAPTER I - PREAMBLE
1.1 Background……………………………………………………………………… …………………4
1.2 Purpose & Objective of the Standard…………………………………………………….5 1.3 Introduction and Scope of the Standard………………………………………………....7 1.4 Exceptions from the Standard…………………………………………………………….9
CHAPTER II – QUALITATIVE AND ETHICAL STANDARDS……………………..11
CHAPTER III – VALUATION SERVICES 3.1. Valuation Engagement……………………………………………………………..…….16 3.2. Calculation Engagement………………………………………………………..………..17
CHAPTER IV - OVERALL ENGAGEMENT CONSIDERATIONS
4.1 Terms of Engagement (TOE)……………………………………………………………...18 4.2 Nature and Risk in Engagement……………………………………….…………………20 4.3 Assumption, Limiting conditions.………………………………………………………..21 4.4 Scope Restriction and limitations………………………………………………………...21 4.5 Hypothetical Conditions…………………………………………………………………..22 4.6 Using work of expert………………………………………………………………...…….22
CHAPTER V – DEVELOPMENT STANDARDS 5.1. Valuation Bases (standard of Value) and Premise………………………………….…25 5.2. Analysis of the subject interest…………………………………………………………..26 5.3. Financial Statement Adjustments……………………………………………………….31 5.4. Applying valuation approaches and methods…………………………………………32 5.5. Valuation adjustments……………………………………………………………..……..41 5.6. Conclusion of value……………………………………………………………………....43 5.7. Subsequent Events………………………………………………………………………..46 5.8. Documentation……………………………………………………………………………47 Page 2 of 62
Business Valuation Practise Standard
CHAPTER VI – REPORTING STANDARDS…………………………………………….49 6.1. Detailed Valuation Report.………………………………………………………………51 6.2. Summary Valuation Report……….….………………………………………………….62 6.3. Calculation Report……….………………………………………………………………..64
EFFECTIVE DATE……….……………………………………………………………………66
Appendix A: Glossary of Business Valuation