Method of valuation for the purposes of computing fair market value of assets and liabilities under section 352(2) for accreted income

Total assets (sub-rule 1). The aggregate fair market value of all the assets in the balance sheet, reduced by tax paid and by any amount shown as an asset (including unamortised deferred expenditure) that does not represent the value of an asset.

How each asset is valued (sub-rule 2).

• Quoted shares and securities: the average of the lowest and highest price on a recognised stock exchange on the specified date or, if there was no trading, on the immediately preceding date on which they traded.
• Unquoted equity shares: (A + B − L) × PV / PE, where A is the book value of all assets in the balance sheet other than bullion, jewellery, precious stone, artistic work, shares, securities and immovable property (less tax paid and non-asset amounts); B is the fair market value of those excluded assets as this rule determines it; L is the book value of liabilities, excluding contingent liabilities (other than arrears of dividend), amounts set apart for dividends, reserves and surplus (other than those set apart for depreciation), provision for taxation in excess of tax payable, and provisions other than for ascertained liabilities; PV is the paid-up value of the equity shares; and PE is the total paid-up equity share capital shown in the balance sheet.
• Other shares and securities: the price they would fetch in the open market on the specified date, on a merchant banker's or an accountant's valuation report.
• Immovable property: the higher of the open-market price on the specified date, on a registered valuer's report, and the stamp duty value on that date.
• Business undertaking: its net assets, A + B − L, determined as for unquoted equity shares.
• Any other asset: the open-market price on the specified date on a report from a registered valuer or, where none is registered for that asset, a valuer who is a member of one of the listed professional valuer bodies (including the Institution of Valuers, the Practicing Valuers Association of India and the Indian Institution of Valuers) or one appointed by a public sector bank or undertaking.

Total liability (sub-rule 3). The book value of liabilities in the balance sheet on the specified date, excluding capital fund, accumulated funds or corpus; reserves, surplus or excess of income over expenditure; contingent liabilities; provisions other than for ascertained liabilities; and provision for taxation in excess of tax payable.

Definitions (sub-rule 4) cover accountant, balance sheet (audited by an accountant), merchant banker, quoted and unquoted shares, recognised stock exchange, registered valuer (section 514), securities, specified date (section 352(4)), specified person (section 355(l)), stamp duty value, and tax paid.