A real estate company owned land recorded at ₹80 crore. Three valuers assessed it. ₹105 crore. ₹128 crore. ₹150 crore. Same land. Same valuation date. Three very different answers.
That isn’t necessarily a valuation failure.
Land is one of the hardest assets to value because the answer depends on assumptions that can move the number dramatically – development potential, permitted use, location, comparable transactions, market conditions and the time required to monetise the asset.
And this is where the accounting question becomes more interesting than the valuation itself. Which number should the financial statements carry?
The highest valuation may look attractive to shareholders but could rely on aggressive assumptions. The lowest may appear conservative but could ignore genuine development potential.
The auditor’s job isn’t simply to choose the number that looks most reasonable. It is to understand why the numbers differ, whether the assumptions are supportable, and whether the selected valuation reflects the relevant accounting requirements.
That’s particularly important when the valuation affects borrowing capacity, net worth, impairment testing, a transaction or a company’s reported financial position.
A ₹20–30 crore difference isn’t just a valuation difference. It can change leverage ratios, covenant calculations, investor perception and even the outcome of a transaction.
Land may be physically immovable. Its value on the balance sheet certainly isn’t.
