Valuation of Financial Instruments

As per ICAI Valuation Standards “Financial Instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity” Examples of Financial Instruments are Equity instruments, Debt Instruments, Derivatives etc. The fair valuation of Financial Instruments is required for regulatory and reporting purposes in case of Disputes, Purchase price allocation etc. It helps determine the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.

Key Methods for Valuation of Financial Instruments

At SPA we are specialists in preparing independent, unbiased and professional practice valuations utilizing internationally accepted valuation methodologies. Some of the commonly used methods include:

• Market Approach
• Income Approach
• Cost Approach