Ip Valuation Services

Ip Valuation Services is a key regulatory filing administered by No specific regulator — the IP valuation is a commercial advisory practice regulated by: (i) the **ICAI** (for ICAI members in practice — under the ICAI Valuation Standards 2018 [ICVS 1–4] and the ICAI Code of Ethics for Valuers); (ii) the **IBBI** (Insolvency and Bankruptcy Board of India — for Registered Valuers under the Companies (Registered Valuers and Valuation) Rules 2017 — for valuations under the Companies Act 2013, the IBC 2016, and the SARFAESI Act 2002); (iii) the **SEBI** (for IP valuations in the context of IPOs, takeovers, preferential allotments — under the SEBI ICDR Regulations 2018, SEBI SAST Regulations 2011, SEBI LODR Regulations 2015); (iv) the **RBI** (for cross-border IP transfers — under the FEMA 1999 and the RBI Master Direction on External Commercial Borrowings, Trade Credits, and Structured Obligations); (v) the **CBDT** (Central Board of Direct Taxes — for IP valuations in the context of transfer pricing under s.92C of the Income-tax Act 1961 and the Arm's Length Price determination — for cross-border IP transactions between associated enterprises); (vi) the **CCI** (Competition Commission of India — for IP valuations in the context of combinations / mergers under the Competition Act 2002 s.20).. Filing is executed via No statutory forms — the IP valuation report is produced in the format prescribed by the engagement letter and the relevant standards (ICVS 2018, IVS 2022, ISO 10668:2010). Standard valuation reports typically include: (i) **Executive Summary** — the valuation conclusion (the fair value of the IP), the valuation date, the purpose of the valuation, and the limitations; (ii) **Engagement Letter** — the scope of the engagement, the deliverables, the timeline, the fees, and the limitations; (iii) **Description of the IP** — the type of IP (patent / trade mark / copyright / design / GI / trade secret / know-how / software / brand), the registration status, the legal ownership, the encumbrances (licences, security interests); (iv) **Valuation Approaches Considered** — the three approaches (cost, market, income) — and the approach selected (with justification); (v) **Valuation Methodology** — the detailed methodology (DCF, royalty relief, MPEE, with-and-without — for the income approach; comparable transactions, multiples — for the market approach; historical cost, replacement cost, reproduction cost — for the cost approach); (vi) **Assumptions and Limitations** — the key assumptions (revenue projections, royalty rates, discount rates, useful life of the IP, terminal value); (vii) **Valuation Conclusion** — the fair value of the IP (typically a range, with a point estimate); (viii) **Reconciliation of Values** — where multiple approaches are used, a reconciliation of the values from each approach; (ix) **Sensitivity Analysis** — the impact of changes in key assumptions (revenue growth, royalty rate, discount rate) on the valuation conclusion; (x) **Valuer's Certificate** — signed by the valuer (an ICAI Chartered Accountant or an IBBI Registered Valuer), with the valuer's registration number and date. under This is a **commercial practice** — no statutory filing or government form is required. The engagement is governed by (i) the **Indian Contract Act 1872** — the engagement letter between the client and I-Pro constitutes a contract for services; (ii) the **Indian Evidence Act 1872 s.65B** — for the admissibility of the valuation report as an electronic record in any litigation; (iii) the **ICAI Accounting Standard 26 (Intangible Assets)** — issued by the Institute of Chartered Accountants of India (ICAI) in 2002, in force 1 April 2003 — for non-Ind-AS companies; key paragraphs: para 18 (recognition — probable future economic benefits and reliable measurement of cost), para 25–32 (measurement at recognition — at cost), para 44–53 (amortisation — finite useful life, amortised on a systematic basis; indefinite useful life, not amortised but tested for impairment annually), para 56–65 (impairment — reference to AS 28 Impairment of Assets), para 82–87 (disclosures); (iv) **Ind AS 38 (Intangible Assets)** — substituted for AS 26 for Ind-AS-compliant companies (listed and unlisted companies with net worth ≥ ₹250 crore or annual turnover ≥ ₹250 crore or borrowings ≥ ₹50 crore — under the Companies (Indian Accounting Standards) Rules 2015, as amended) — in force from financial year 2017–18; (v) **AS 28 (Impairment of Assets)** — for impairment testing of intangible assets (including IP) — when the carrying amount exceeds the recoverable amount (the higher of fair value less costs to sell and value in use), an impairment loss is recognised; (vi) **AS 26 / Ind AS 38 vs IFRS for SMEs Section 18** — for SMEs applying IFRS for SMEs (the IFRS for SMEs Section 18 is a simplified version of IAS 38 — applies to SMEs in jurisdictions that have adopted IFRS for SMEs; India has not adopted IFRS for SMEs — Indian SMEs follow AS 26 or Ind AS 38 — **NOT CONFIRMED — PROFESSIONAL VERIFICATION REQUIRED** for whether Indian SMEs may apply IFRS for SMEs); (vii) **IAS 38 (Intangible Assets)** — international standard (the global counterpart of Ind AS 38); (viii) **ISO 10668:2010 (Brand Valuation — Requirements for Monetary Brand Valuation)** — international standard for brand valuation; three-stage approach (scope of work, valuation, reporting basis) — three approaches (cost, market, income); (ix) **International Valuation Standards (IVS) 2022** — issued by the International Valuation Standards Council (IVSC); effective 31 January 2022 — General Standards (IVS 101 Scope of Work, IVS 102 Investigations and Compliance, IVS 103 Reporting) and Asset Standards (IVS 200 Business and Business Interests, IVS 210 Intangible Assets — defines the cost, market, income approaches and the royalty relief, multi-period excess earnings methods); (x) **ICAI Valuation Standards (ICVS) 2018** — issued by the ICAI on 7 February 2018, in force 1 April 2019 for valuation reports issued by ICAI members in practice — ICVS 1 (Introduction), ICVS 2 (Valuation Bases and Approaches), ICVS 3 (Valuation Approaches and Methods), ICVS 4 (Valuation of Intangible Assets); (xi) **Companies Act 2013** — s.246 (Valuation by Registered Valuer — for the purpose of the Companies Act, including IP valuation for mergers, amalgamations, restructuring, buyback, issue of shares on a preferential basis) — the valuer must be registered with the IBBI (Insolvency and Bankruptcy Board of India) under the Companies (Registered Valuers and Valuation) Rules 2017; (xii) **Income-tax Act 1961** — s.56(2)(viib) (angel tax — issue of shares at a premium above the fair market value determined under Rule 11UA of the Income Tax Rules 1962 — the connection to IP valuation is that the brand / IP value underpins the share premium justification; the user brief's reference to "s.56(vi)(b)" appears to be a typo for s.56(2)(viib) — flagged as **NOT CONFIRMED — PROFESSIONAL VERIFICATION REQUIRED**); s.9(1)(vi) (royalty income deemed to accrue or arise in India); s.194J (TDS on royalty — 10% for residents, 20% for non-residents; reduced to 5% for use of patent for residents); s.35(2)(ii)/(iia)/(iv) (weighted deduction for R&D — 200% for in-house R&D reduced to 100% from FY 2020–21; 100% for R&D to approved institutions); s.80-OO / s.80-O (abolished — historically allowed deduction for royalty income); s.44BB / s.44BBB (for non-resident royalties); (xiii) **FEMA 1999** — for cross-border IP transfers (FC-GPR for IP brought in as foreign investment; FC-TRS for transfer of IP between residents and non-residents; Form 10FC for any other cross-border IP transaction); (xiv) **SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018** — Reg 26(1) for IP risk disclosure in IPO filings; Reg 32 for the valuation report in preferential allotments; (xv) **SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 2011** — for IP-related disclosures in open offers; (xvi) **SARFAESI Act 2002** — s.31(1)(t) excludes intangibles from "security interest" — but in practice Indian banks lend against IP on a security interest basis — **NOT CONFIRMED — PROFESSIONAL VERIFICATION REQUIRED** for the current practice of IP-backed lending in India; (xvii) **Insolvency and Bankruptcy Code 2016** — for the valuation of IP assets in the insolvency resolution process under s.18 (powers and functions of the interim resolution professional) read with the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 Reg 27–34.. Our specialist-led team ensures full compliance with statutory documentation, eligibility verification, and expedited government approval.