The Financial Reporting Council has decided to adopt the International Valuation Standards to bring business and assets valuation services under a well-structured framework.
On May 6, the FRC published the standards on its web site and sought public opinions within 60 days from the date of the notice.
The FRC will adopt and issue the IVS as valuation standards to be applied in Bangladesh jurisdiction, FRC officials said.
Companies value their business ‘whimsically’ as there are no valuation standards, they said.
FRC executive director Sayeed Ahmed told New Age that the FRC would adopt the standards after getting public opinions.
Once the standards are adopted, companies cannot value its business ‘irrationally’ as they have to follow the valuation standards, he said.
Currently, there are no valuation-standards in the country and finance professional practices are used for the business valuation, he said.
Once the standards are adopted, companies must follow the framework for their business or asset valuation, Sayeed said.
He also said that the companies intended to raise funds through initial public offering would have to make valuation in accordance with the IVS.
Companies will also follow the standards when they go for revaluation of their assets, he added.
The FRC has already signed a copyright agreement with the global standard setting body, International Valuation Standards Council (IVSC), FRC officials said.
The standards include business valuation as well as tangible, intangible, financial assets valuation and real property valuation.
The valuation-services are used in banking, insurance, leasing, investment, merger, acquisition and transactions.
Under sections 23 and 40 of the Financial Reporting Act, 2015, the FRC has the responsibility to issue the valuation standards as applicable in Bangladesh jurisdiction, the officials said.
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