IBBI’s New Valuation Guidelines (2026): What They Mean for Valuers and IBC Processes

The Insolvency and Bankruptcy Board of India (IBBI) has issued comprehensive guidelines for Registered Valuers conducting valuations under the Insolvency and Bankruptcy Code, 2016 (IBC), effective June 15, 2026. These guidelines aim to enhance consistency, transparency, and reliability in the valuation process by mandating specific documentation, minimum content for valuation reports, detailed parameters for valuing receivables, and clear duties towards a designated Coordinating Valuer. This move is set to significantly impact how valuations are performed and reported in India’s insolvency ecosystem.

Why These New IBBI Valuation Guidelines Matter for You

Valuation reports are the bedrock of insolvency processes under the IBC. They are crucial for ensuring consistency, professionalism, transparency, and trust, ultimately leading to a reliable determination of value and maximizing returns for all stakeholders. The new guidelines, issued under Section 196 of the Code, demand that these reports be comprehensive, well-documented, and based on structured, reasoned assessments of a corporate debtor’s assets.

This circular applies to all Registered Valuers, Registered Valuer Entities, Registered Valuer Organisations, Registered Insolvency Professionals, and their respective entities and agencies. So, if you’re involved in any capacity, understanding these changes is non-negotiable.

Part I: General Content – The Core Requirements

This section lays down the foundational requirements for all valuations under IBC:

Documentation Requirements

Comprehensive Records: Your documentation must be a complete written record of the valuation. This includes all communications, working papers, and supporting materials. It needs to clearly describe the valuation process, scope, work performed, and the basis of your conclusions. Essentially, it must be robust enough to substantiate every conclusion you reach.

️ Key Inclusions: This means recording communications with clients, alternative methodologies considered, additional data and inputs evaluated, identified risks and biases, professional judgments exercised, and valuation quality control procedures. Crucially, you must also document how valuation risk was identified, assessed, and managed.

Minimum Content of the Valuation Report

Every valuation report now has a prescribed minimum content list. This ensures uniformity and completeness across the board. Some key elements include:

• Purpose and Scope of Work: Clearly define what you’re valuing and why.
• Valuer Details: Your registration number and details of any other experts involved.
• Disclosure: Any valuer interest or conflict must be explicitly stated.
• Client & Users: Identify the client, appointing authority, and other intended users.
• Asset Details: Comprehensive information about the assets and/or liabilities being valued.
• VRIN: A unique Valuation Report Identification Number.
• Methodology: Sources of information, basis and premise of value, valuation standards followed, approaches, methods, or models applied, and relevant discounts/premiums.
• Assumptions & Limitations: Significant assumptions, limiting conditions, and specific reasons for any asset being left out or assigned zero value.
• Value & Rationale: The final value and the detailed rationale behind it.
• Caveats: All caveats, limitations, and disclaimers as per IBBI guidelines.

Key Parameters for Valuing Receivables

Valuing receivables just got more granular. You must now consider:

• Nature: Is it a trade receivable, loan, advance, or tax-related receivable?
• Credit Risk & Related Party Status: Assess the financial health, solvency status (e.g., defaulter, under litigation), external credit ratings, and if it’s a related party transaction.
• Ageing: Categorize receivables by how long they’ve been outstanding (e.g., <3 months, <6 months, 6–12 months, <1 year).
• Legal Enforceability: Is it secured or unsecured? Disputed or undisputed? Do you have enforceable documentation like contracts, invoices, or KYC details?
• Past Recovery Record: Look at historical recovery experience from similar receivables or sectors, including legal/administrative costs and recovery time.
• Macro & Industry Factors: Consider sector-specific default trends and broader economic conditions.

Duties Towards the Designated Coordinating Valuer

If you’re working with a Coordinating Valuer, your responsibilities are clear:

• Cooperation: Provide full assistance, timely inputs, data, and clarifications.
• Compliance: Adhere to the Code, regulations, and valuation standards.
• Accuracy: Ensure all shared information, data, and assumptions are true, correct, complete, and free from material misstatement or omission.
• Documentation: Maintain working papers to substantiate your inputs.
• Responsiveness: Provide additional information or clarifications without delay.

️ Part II: Asset-Specific Formats – Tailored Reporting

This section provides detailed formats for specific asset classes: Land & Building, Plant & Machinery, and Securities or Financial Assets. Each format includes an Executive Summary and detailed sections mirroring Part I, but tailored to the asset type. This means specific details for each asset class, asset-specific sources of information, and explicit adherence to IBBI Valuation Standards.

Key elements here include a standardized Executive Summary table, specific details for assets (e.g., size and location for land, make and capacity for machinery, classification and marketability for securities), and a discussion of meetings with the Committee of Creditors to explain methodologies.

Part III: Guidelines for Coordinating Valuer – Holistic Value Capture

These guidelines apply to the Coordinating Valuer designated for determining the Fair Value of the Corporate Debtor under CIRP and PPIRP Regulations. The objective is to ensure a holistic capture of the Corporate Debtor’s Fair Value, reflecting its true commercial worth, operational/business synergies, and overall economic value.

Independence: The Coordinating Valuer must comply with all eligibility, independence, and disclosure requirements, maintaining objectivity and professional integrity. Any conflict of interest must be disclosed immediately.

Designation: The Insolvency Professional, in consultation with the Committee of Creditors, designates the Coordinating Valuer from among the Registered Valuers appointed for the asset classes.

Frequently Asked Questions

Q1: When do these new IBBI Valuation Guidelines come into effect?
A1: The guidelines came into force on June 15, 2026, and apply to all valuations conducted under the IBC thereafter.

Q2: What is the primary goal of these new guidelines?
A2: The main goal is to enhance consistency, transparency, and reliability in the valuation process under IBC, ensuring a more credible determination of value and maximizing value for stakeholders.

Q3: Who is responsible for designating a Coordinating Valuer?
A3: The Insolvency Professional, in consultation with the Committee of Creditors, designates the Coordinating Valuer from among the Registered Valuers appointed for the various asset classes.

Key Takeaways

• Mandatory Documentation: Comprehensive records are now a strict requirement, detailing every step of the valuation process.
• Standardized Reporting: Valuation reports must adhere to a minimum content list, ensuring uniformity and completeness.
• Granular Receivable Valuation: Specific parameters must be considered when valuing receivables, including credit risk, ageing, and legal enforceability.
• Coordinating Valuer’s Role: Clear duties and responsibilities are outlined for Registered Valuers assisting a designated Coordinating Valuer.
• Holistic Value Capture: The guidelines emphasize capturing the true commercial and economic worth of the Corporate Debtor.

What are your thoughts on how these new guidelines will streamline the valuation process under IBC? Share your perspective!