New Delhi, Nov. 17 -- The Insolvency and Bankruptcy Board of India (IBBI) has proposed significant changes to valuation norms under the Insolvency and Bankruptcy Code (IBC) to address inconsistencies and prevent undervaluation of distressed companies, particularly those with substantial intangible assets.

In its discussion paper 'Strengthening the Valuation Process under the Insolvency and Bankruptcy Code, 2016,' the IBBI said current valuation methods often overlook the full commercial value of distressed companies, as valuers focus on individual asset classes rather than the business as a whole.

This results in underestimation of key intangible assets such as brand value, intellectual property (IP), customer relationships and goodwill...