Analytical Study on Various Heterogeneous Valuation Techniques followed in Balance Sheet
Meena Kumari, Asmita Agrawal · Zenodo (CERN European Organization for Nuclear Research) · 2023
Balance Sheet show the current financial position of a company at a particular date while Profit & Loss shows the performance. Historically, assets and liabilities were shown in the Balance sheet on cost basis. However, after the adoption of IND AS, various new valuation techniques measuring the current value like fair value, recoverable value are gaining acceptance, especially for assets. As the concept is being recommended on asset-to asset basis and not for the entire Balance Sheet together, it has led to various techniques being applied across asset categories, including cost. This research paper studies the various techniques recommended by IND AS for different asset categories and practical application of such recommendation by five listed companies to whom IND AS applies. It further examines the impact of such heterogeneous valuationon the financial statements.Based on the results, the research paper goes on to advise the investors to be careful while understanding the valuations in Balance Sheet and read it only in conjunction with Notes to Accounts.