The Royal Institution of Chartered Surveyors has launched the RICS Valuation Standards (the ‘Red Book’) – India edition with valuation standards of global application along with India-specific guidance.
RICS claims that through this novel initiative, the RICS ‘Red Book’, considered the ‘Gold Standard’ in valuation worldwide has been localised for the Indian market. A single set of globally consistent and locally relevant asset valuation standards are now available to RICS members and industry valuers.
The absence of a developed valuations profession, which remains ungoverned by any specific laws, authority or regulation, has hurt the Indian market.
The lack of transparency and established standards for valuation and accounting of land and property have all contributed to the challenges pertaining to valuation of real estate companies, market value of land banks and property assets where over/under reporting of value, inflated valuations, unprecedented price escalations, inaccurate compensation to land owners have been common occurrences.
The Red Book global standards align and comply with standards set by International Valuation Standards Council (IVSC). While the IVS provide broad principle-based standards, RICS Red Book provides a practice framework for implementing IVS, by way of localised standards and guidance across different countries for different applications including valuations for bank lending, taxation purposes and financial reporting, among others.
The purpose of Red Book standards is to provide an effective ethical and practice framework, so that users of valuation services can have confidence that a valuation provided by an RICS member (for whom these standards are mandatory) is objective and delivered in a manner that is consistent with internationally recognised standards.
Sachin Sandhir, Managing Director & Country Head, RICS India, said “RICS India has focussed on contributing towards development of the real estate sector and valuation is one such important area. Along with qualified chartered and non-chartered professionals who operate to the highest levels of professional competence, we also focussed on building capacity and upskilling professionals in different areas of real estate including valuations.”
India’s transition to International Financial Reporting System (IFRS) which is based on current value accounting is driving the need for institutionalising international valuation standards (IVS) which is what the RICS Red Book follows.
