A business valuation can influence an investment, a merger, a restructuring or even a dispute. How confidently can its assumptions be defended?
ICAI has released the Exposure Drafts of the ICAI Valuation Standards, 2026, proposing a comprehensive revision of the 2018 standards.
Seven draft documents have been released, covering areas such as valuation bases, valuation approaches and methods, business valuation, intangible assets, financial instruments, and reporting and documentation.
For businesses and investors, three areas deserve attention:
1. How value is determined
The proposed revisions to valuation bases and methods make it important to examine how the purpose of a valuation influences the approach adopted.
2. How business value is assessed
The revised business valuation standard is particularly relevant when companies are raising capital, considering acquisitions or evaluating restructuring options.
3. How conclusions are supported
Reporting and documentation matter because a valuation may need to be examined long after the exercise is completed. The assumptions, information and reasoning behind the conclusion need to be traceable.
These are exposure drafts, not finalised changes. The standards are open for stakeholder comments until 22 November 2026.
For businesses that rely on valuation reports, this is a good time to understand the proposed framework and assess what it could mean for future valuation engagements.
A valuation report should do more than arrive at a number. It should explain why that number is reasonable.
