..........It may be considered that presenting details relating to the RBI valuation may in fact lead to confusion as it may not be equal to the final transaction price. Internationally, too, specific valuation considerations are rarely disclosed, with most financial reporting aimed at allocation of the purchase price rather than how it was arrived at. Another small observation is that the disclosure requirements do not mention issue of shares/ convertible debentures. Further, issue/ transfer of CCPS is not covered. This could perhaps be an oversight, but in any case, it may be a good idea for this clause to be taken up for further debate. Overall, the RBI has certainly lived up to expectations by liberalizing the pricing guidelines and opening up the valuation of cross-border transactions to the wider principles of fair market value. It is a well-balanced move and will be welcomed by companies and investors alike.
Read - Business World
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