National Income Accounting
Basics of Fiscal Policy
Basics of Monetary Policy
Understanding Business cycles

Finance
Basic Concepts of Finance
Decisions in Finance
Financial Statement Analysis
Assets, Liabilities & Equity and Incomes & Expenses
Performance Analysis
Capital Structure Analysis
Credit Analysis
Cash Flow Analysis

• Model Code of Conduct under the Companies (Registered Valuers and Valuation) Rules, 2017: professional competence and due care, independence and disclosure of interest, confidentiality, information management, gifts and hospitality
• Integrity and fairness, remuneration and costs, occupation, employability and restrictions, business ethics
• Ethical considerations under terms of engagements: engagement letter, management representation, guidance on use of work of experts, independence and conflict of interest,quality review process of valuers, rights and responsibilities of valuers
  

• The Companies Act,2013: Chapter IV -Share Capital and Debentures; Chapter XV -Compromises, Arrangements and Amalgamations and the Companies (Compromises, Arrangements and Amalgamations) Rule, 2016; Chapter XVII-Registered Valuers; The Companies (Registered Valuers and Valuation) Rules, 2017; Chapter XX -Winding Up
• The Transfer of Property Act, 1882: definition of immovable property;transfer and sale of property;rights and liabilities of buyer and seller;mortgage of property;rights and liabilities of mortgager and mortgagee;lease;gift of immovable property
• The Indian Stamps Act,1899: basics of theact; instruments on which duty is levied; valuation for duty
• The Income Tax Act, 1961: taxes on individuals;taxes on companies;taxes on partnership firms;heads of income-income from salary;income from house property;income from profits; gains of business or profession;income from capital gains and income from other sources; clubbing and set off provisions; Double Taxation Avoidance Agreement; Valuation under Rule 11UA of Income Tax Act; taxation on transfer of business;transfer pricing issues; employee stock option plan or scheme
• The Insolvency and Bankruptcy Code, 2016 (IBC) and Regulations: Part I of IBC: Preliminary; Part-II of IBC: Insolvency Resolution and Liquidation for Corporate Persons; The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016; The Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016; The Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017; Valuation under IBC
• The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002)
• The Securities and Exchange Board of India(SEBI)Regulations: The SEBI(Issue of Capital and Disclosure Requirements) Regulations, 2009-Chapter VI-A and Chapter VII; The SEBI (Prohibition of Insider Trading) Regulations, 2015; The SEBI (Substantial Acquisition of Shares and Takeovers)Regulations, 2011; The SEBI (Delisting of Equity Shares) Regulations, 2009; The SEBI (Share basedEmployee Benefits) Regulation, 2014: Employee stock option schemes, Employee stock purchase schemes and Stock appreciation rights schemes
• Reserve Bank of Indiaand Regulations under Foreign Exchange Management Act, 1999:FEMA (Transfer or Issue of Security by a Person Resident Outside India), Regulations, 2017; Foreign Direct Investment (Pricing Guidelines); Direct Investment by Residents in Joint Venture/ Wholly Owned Subsidiary abroad; Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks; Guidelines on Sale of Stressed Assets by Banks 
  

Basics of fair value, fair value and adjustments; Highest and best use, Fair value techniques, Disclosure in financial statement; Impairment of Assets (Ind AS 36); Financial Instruments (Ind AS 109); Business Combinations (Ind AS 103); Fair Value Measurement (Ind AS 113)

• Meaning of value:Difference between price and value; definition of Value
• Types of value: fair market value, fair value, intrinsic value, investment value, synergistic value, market value, special value
• Premise of valuation: going concern and liquidation
• Purpose of valuation: mergers andacquisitions, strategy evaluation, identification of under and overvalued assets, legal, financial reporting, scope of work
• Valuation standards
• Valuation process: understanding the business; planning and preparation; forecastingcompany performance; selecting the appropriate valuation model;converting forecast to valuation;applying analytical results in the form of recommendations; conclusions
• Valuation report and documentation: scope of the work performed, approach adopted, method applied, key inputs used, assumptions made, conclusion(s) of value and principal reasons for any conclusions reached, and date of report, date of valuation
• Importance of documentation, nature and purpose of documentation, timely preparation of documentation, documentation of valuation procedures performed, assembly of the final documentation, ownership ofdocumentation
  

• Cost approach: net asset value and book value, adjusted value, sum of the parts, replacement cost
• Market approach: quoted market price, price of recent investment and price of recent transaction, relative valuation, concept of multiples, selection of appropriate comparables; adjustments to multiple calculated in accordance to size, lines of operation and geographical areas of operation
• Income approach:discounted cash flow approach;terminal value;present value;adjusted present value approach; internal rate of return;cash flow analysis-end of year and mid of year conventions; earning capitalization method /yield method;concept of perpetual growth;concept of cost of capitalandcapitalization rate
  

• Equity / Business Valuation: analysis of entity’s business environment/ business model, industry analysis, regulatory framework (EIC)
• Analysis of Business environment, Entity’s Business Strategy Analysis: Michael Porter’s five forces;SWOT;PEST;GE/McKinsey Matrix;ADL Matrix;core competencies
• Business Combinations:amalgamation, merger,demerger, arrangement & restructuring;concept of due diligence, business risk assessment, historical financial analysis, sources of information;top to bottom and bottom to top approachesto analysis
• Forecasting approaches and techniques; cash flow analysis -end of year and mid of year conventions
• Appropriate Cost of Capital / rate of return; built-in Discount Rate; capital Asset Pricing Model (CAPM); modified CAPM; weighted Average Cost of Capital; weighted Average Rate of return on asset;internal rate of return;arbitrage pricing theory; risk adjustments
• Valuation adjustments in relation to discount and premium

Fixed Income Securities

• Types of fixed income securities: categories of fixed income securities i.e. debt  and  preferred  stocks  along  withdifferent  rights  attached  to  both categories
• Types of debt instruments: sovereign securities;state and local government bonds;semi-government/agency bonds;corporate debt securities;corporate bonds;money market securities in relation to investments (CP, CD, T-Bills);tax free securities;asset backed securities
• Terms used in fixed income securities: fixed income securities;bond indenture;issuerandholder;covenants;maturity;par value, coupon rate, clean price, dirty price;repurchase agreement;yield to maturity, yield to put, yield to call;forward rate and spot rate
• Bond duration-Macaulay duration, Modified duration, Effective duration, Key duration 
• Credit rating of bonds: risk assessment and factors considered in assigning credit rating
• Embedded optionsfor issuer and holder;call/put for repayment; cap andfloor on coupon;conversion options;pre-payment options 
• Derivative products: types of derivative products;calculation of swap rates;valuation of swaps; accruals on swaps 
• RelatedFixed Income Money Market and Derivatives Association of India circularsfor Non-SLR bonds,  Traded bonds,  Non-traded bonds-rated,Non-traded bonds-not  rated,  Floating rate bonds,  Staggered redemption bonds, Perpetual bonds, Deep discount bonds, Bonds with call/put options, Tax free bonds, Security receipts/Pass through certificates
• Option valuation: General principles
• Option valuation models: Black and Scholes;Black and Scholes Merton option pricing method;Binomial tree method;Monte Carlo simulation 
• Valuation of other financial assets and liabilities: concept of financial and non-financial assets and liabilities;valuation of other instruments like financial guarantees and warranties

Intangible Assets  

• Nature and classification of intangibles 
• Identification of nature of intangible assets: lifeof asset;based on function;acquired or internally generated;generating cash flow independentlyornot generating cash flow independently;intangible assets under development and research assets
• Purpose of intangibles valuation: financial reporting under Ind AS, legal and tax reporting, estate and gift tax, amortization allowance, transfer of standalone intangible assets, transfer of intangible asset as part of transaction, collateral lending,franchises and brand license agreement, insolvency/ bankruptcy 
• Valuation Approaches:excess earnings method;relief-from-royalty method;premium profit method; greenfield method; distributor method; other valuation approaches as applicable;rate of return and discount rate for intangibles

Situation Specific Valuation  

• Distressed asset valuation 
• Start-up entities valuation
• Valuation of small and medium enterprises 
• Valuation of cyclical firms 
• Valuation of investment entities 
• Valuation for insurance coverage

• Miheer H. Mafatlal Vs. Mafatlal Industries Ltd. (1997) 1 SCC 579 
• Hindustan Lever Employees' Union Vs. Hindustan Lever Limited and Ors 
• Brooke Bond Lipton India Ltd. (1999)98 Comp Cas 496 (Cal)
• Dinesh  VrajlalLakhani  Vs.  Parke  Davis  (India  Ltd.)  (2005)  124  Comp Case 728 (Bom HC)
• Dr. Mrs. Renuka Datla Vs. Solvay Pharmaceutical B.V. andOrs.
• G.L. Sultania and Another Vs. The Securities and Exchange Board of India

This  section  will  have  three  case  studies  for  application  of  valuation techniques. 

• One case study with four 2-mark questions, for 8 marks
• Two case studies with three 2-markquestions each, for 12 marks

(This section will have case studies for application of valuation techniques. For each case there will be a comprehension narrating the transaction based on which questions will be asked from the case.)