INSOLVENCY & BANKRUPTCY BOARD OF INDIA

DISTRIBUTION
SR. NO. COVERAGE
WEIGHT MARKS
1 Principles of Economics - Microeconomics
-Consumption: Indifference curve, consumer surplus, elasticity
-Price mechanism: Determinants of price mechanism; individual
and market demand schedules; conditions, exceptions &
limitations of law of demand; individual & market supply
schedules; conditions & limitations of law of supply; highest,
lowest & equilibrium price; importance of time element
-Pricing of products under different market conditions: perfect
& imperfect competition, monopoly etc.
-Factors of production & their pricing: land, labour,capital,
entrepreneur & other factors
-Theory of rent
-Capital & interest: types of capital, gross interest, net interest 3%
-Organisation & profit: functions of entrepreneur; meaning of
profit & theories of profit

Macroeconomics
- Functions and role of money
- Inflation: types of inflation; causes and effects of inflation;
Inflationary gap
- Control of inflation: monetary, fiscal and direct measures
- Deflation: causes and effects of deflation; deflationary gap;
measures to control deflation; deficit financing
- Savings and investment: savings and types of savings;
determinants of savings; investment and types of investment;
determinants of investment; relationship between savings and
investment
- Components of economy: primary sector, secondary sector, 3%
tertiary sector; informal sector in urban economy; parasitic
components in urban economy
- Concepts of gross domestic product and gross national
product; capital formation etc.

Parallel Economy
- Definition of parallel economy; causes of parallel economy
and effects on use of land and its valuation
- Impact on real estate market and construction industry 1%
2 Book-keeping and Accountancy
- Meaning and objects of book-keeping; double entry book-
keeping
- Books of prime entry and subsidiary books: cash book, bank
book, journal, ledger, purchase and sale books, debit and credit
notes register; writing of books; posting and closing of accounts
- Trading account; profit and loss account; income and
expenditure account
- Preliminary analysis of financial statements
- Cost and costing; elements of cost - fixed expenses, variable 3%
expenses, break-even point

3 Law - General
- Indian legal system: salient features of the Indian Constitution,
fundamental rights, directive principles of state policy
- Government: executive, legislature and judiciary
- Laws of contract: formation of a contract, parties, void,
voidable and unenforceable contract, contingent contract,
misrepresentation, fraud and effect thereof, termination of
contract, remedies for breach, performance of contract,
indemnity and guarantee, law of agency
- Tort: general principles of tort, tort affecting valuation
- Law of arbitration and conciliation: salient features
- Auction: authority of auctioneer, duties of vendor, purchaser
and public, mis-description and misrepresentation,
advertisements, particulars and catalogues, statements on the
rostrum, conduct of sale, reservation of price, right to bid, 7%
bidding agreements, memorandum of the sale, deposit, rights
of auctioneer against vendor and purchaser
- Laws of evidence: burden of proof, presumptions, conclusive
proof

Salient features of the Insolvency and Bankruptcy Code, 2016

concerning valuation
- The Companies Act, 2013: Section 192(2), 230 (1), 230 (2), 230
(3),
231, 232, 247 and 281(1)
- Salient features of the Companies (Registered Valuers and
Valuation)
Rules, 2017
- Salient features of the Securitization and Reconstruction of
the
Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI Act, 2002) concerning valuation
- Section 5(n) of the Banking Regulation Act, 1949 on “secured 3%
loan or
advance”
 Financial Assets and Enforcement of Security Interest Act, 2002
(SARFAESI Act, 2002) concerning valuation
- Section 5(n) of the Banking Regulation Act, 1949 on “secured 3%
loan or
advance”

4 Introduction to Statistics
- Data classifications and processing, graphical representation
of data,
frequency distributions
- Measures of central tendency, dispersion and skewness
- Elementary theory of probability and probability distributions,
sampling and sampling distributions
- Simple test of significance, regression and correlation, multiple
correlation coefficient 2%
- Time series
- Index numbers

5 Environmental Issues in Valuation

- Environment and valuation - differences between the market
price and
the negative value consequent on environmental impact
- Environmental issues of air pollution, water pollution,
environmental
factors and their effects, measures to restore the damage, cost
to cure
- Outlines of environmental legislations: the Indian Forest Act,
1927,
the Water (Prevention and Control of Pollution) Act, 1974, the
Air
(Prevention and Control of Pollution) Act, 1981, the 3%
Environment
(Protection) Act, 1986
- Laws related to industrial health and safety

6 Professional/Business Ethics and Standards

- 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 4%
experts,
independence and conflict of interest, quality review process of
valuers, rights and responsibilities of valuers
 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 4%
experts,
independence and conflict of interest, quality review process of
valuers, rights and responsibilities of valuers

7 Laws related to Real Estate

- Land acquisition - the right to fair compensation and
transparency in
the land acquisition, the Rehabilitation and Resettlement Act,
2013
- General building rules and regulations
- Rent control laws: sections pertaining to occupancy rights of
tenants,
freezing of rent, protection against eviction of tenant and its
effect on
value of property
- Right of way and Section 52 - licenses under the Indian
Easements
Act, 1882
- Salient features of the Real Estate (Regulation and
Development) Act,
2016 and regulating authorities established under the Act
- The Transfer of Property Act, 1882: transfer of immovable
property,
sale, mortgage, gift, exchange, assignment, charge, lien,
tenancies/sub tenancies; lease of immovable property; lease
granted by private and
statutory bodies - impact of each on valuation; Sections: 3, 5, 6,
7, 25, 8%
53 and 53A of the Transfer of Property Act, 1882
- Laws relating to inheritance/succession: Mohammedan:
Muslim
Personal Law; the Hindu Succession Act, 1956, the Hindu
Succession
(Amendment) Act, 2005; the Indian Succession Act, 1925: law
of
succession for person other than Hindu and Mohammedan; will
&
testament, succession certificate

8 Valuation of Real Estate

- Cost, price and value
- Types of value
- Basic elements of value - marketability, utility, scarcity, and
transferability
- Factors affecting value - physical, economic, legal and social
- Highest and best use, value in use, value in exchange
8 Valuation of Real Estate
- Cost, price and value
- Types of value
- Basic elements of value - marketability, utility, scarcity, and
transferability
- Factors affecting value - physical, economic, legal and social
- Highest and best use, value in use, value in exchange
- Real property: rights and interests in real estate; types of
ownerships and types of occupancy in real estate
- Annuities; capitalization and rate of capitalization; years
purchase; sinking fund; redemption of capital; reversionary
value
- Construction and use of valuation tables
- Urban infrastructure and its influence on value of real estate
- Real estate market and its characteristics; investment in real
estate; factors influencing demand and supply schedule in real
estate
- Concepts of green buildingValuation of Real Estate
- Cost, price and value
- Types of value
- Basic elements of value - marketability, utility, scarcity, and
transferability
- Factors affecting value - physical, economic, legal and social
- Highest and best use, value in use, value in exchange
- Real property: rights and interests in real estate; types of 10%
ownerships and types of occupancy in real estate
- Annuities; capitalization and rate of capitalization; years
purchase; sinking fund; redemption of capital; reversionary
value
- Construction and use of valuation tables
- Urban infrastructure and its influence on value of real estate
- Real estate market and its characteristics; investment in real
estate; factors influencing demand and supply schedule in real
estate
- Concepts of green building

Income Approach to Value

- Relation between income and value
- Valuation of property affected by the Rent Control Acts;
licensed property under the Easement Act, 1882; leasehold
properties under the Transfer of Property Act, 1882
- Derivation of yield rate from market derived data
- Remunerative rate of interest and accumulative rate of
interest
- Types of rent: outgoings, income, yield, years purchase
- Determination of market rent and standard rent
- Lease - lessor and lessee: types of lease; lease provisions and
covenants
- Valuation of lessor’s interest, lessee’s interest including sub-
lease in leased property; premature termination of lease or
surrender of lease
- Real estate as an investment; yield from real estate vis-à-vis
other forms of investments; sound investment comparison 7%
- Investment decisions: discounted cash flow techniques,
internal rate of return, net present value and capital assets
- Types of rent: outgoings, income, yield, years purchase
- Determination of market rent and standard rent
- Lease - lessor and lessee: types of lease; lease provisions and
covenants
- Valuation of lessor’s interest, lessee’s interest including sub-
lease in leased property; premature termination of lease or
surrender of lease
- Real estate as an investment; yield from real estate vis-à-vis
other forms of investments; sound investment comparison 7%
- Investment decisions: discounted cash flow techniques,
internal rate of return, net present value and capital assets
pricing model
- Profit method for valuation of special properties: hotels,
cinema, mall, petrol pump, hill resorts

Market Approach to Value

- Types of market
- Market survey and data collection; sources of sale
transactions
- Comparison of sale instances: factors of comparison and
weightages for adjustment in value
- Hedonic model and adjustment grid model under sales
comparison method
- Land characteristics and its effect on land values
- Hypothetical plotting scheme for value of large size land
- Residue technique and other development methods 7%
- Valuation for joint venture development of property

Cost Approach to Value

- Methods of cost estimates for buildings
- Life of building: economic, physical, legal
- Factors affecting life of the building
- Total life, age, estimating future life
- Various methods of computation of depreciation, functional,
technological and economic obsolescence
- Reproduction cost/replacement cost, depreciated
replacement cost (DRC) working, adopting DRC as value subject
to demand and supply aspect
- Land value by market approach and building value by cost 7%
estimation method for owner occupied bungalows, factories,
public buildings
 Various purposes of Valuation
- Valuation of properties for purposes such as: bank finance,
auction reserve, building insurance, sale, purchase, valuation
disputes in court, probate, partition, rent fixation, stamp duty,
capital gains tax, as per rule 11ua of the Income Tax Act, 1961,
lease and mortgage of property, any other purposes not
referred above
- Valuation standards as per the provisions of the Companies
Act, 2013
- Indian accounting standards (Ind AS 16, Ind AS 36, Ind AS 40,
Ind AS 113) as applicable to valuation 4%
- Valuer as an expert witness in court
- Valuers’ functions & responsibilities, error of judgement and
professional negligence

Important Case Laws on principles of valuation of Real Estate:

- R.C. Cooper Vs. Union of India, (1970) AIR SC 564
- Sorab D. Talati Vs. Joseph Michem, Appeal No. 101 0f 1949 in
R.A. Application No. 805 of 1948
- CWT Vs. P.N. Sikand (1977) 107 ITR 922 (SC)
- Wenger & Co. Vs. DVO (1978) 115 ITR 648 Delhi HC
- Jawajee Nagnathan Vs. Revenue Divisional Officer (1994) SCC
(4) 595 (SC)
- Chimanlal Hargovinddas Vs. SLAO, Pune AIR 1988 SC 1652
- CED Vs. Radhadevi Jalan (1968) 67 ITR 761 (Cal)
- CIT Vs. Ashima Sinha (1979) 116 ITR 26 (Cal) 2%
- CIT Vs. Anupkumar Kapoor & others (1980) 125 ITR 684 (Cal)
- CIT Vs. Smt. Vimlaben Bhagwandas Patel (1979)118 ITR
134(Guj)

9 Principles of Insurance and Loss Assessment

- Principles and legal concepts in relation to insurance of
buildings; contract of insurance; insurable interests; liability to
insure; duties of the insurer and the insured
- Types of fire policies; reinstatement value, indemnity policies
and policies for other perils; terms and conditions; perils,
beneficial and restrictive clauses
- Value at risk, sum insured and condition of average, over and
under insurance; provisions regarding inflation, depreciation,
obsolescence and betterment; other provisions
- Preparation of claim for damages due to insured perils 3%
- Obligations and rights of insurer and insured
10 Report writing
- Reports: quality, structure, style
- Report writing for various purposes of valuation: sale,
purchase, purchase, mortgage, taxation, insurance, liquidation
etc.
- Contents of the report: instruction of clients; date as on which
valuation is made and date of report; site inspection; location;
ownership history; data collection and analysis; type of
construction; valuation method; value estimation; assumptions
and limiting conditions including caveats and conclusion
3%

11 Case Study
Two case studies on valuation of land and building:
- One case study with six 2-mark questions, for 12 marks
- One case study with four 2-mark questions, for 8 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)

20%

TOTAL 100%