How should I prepare for the IBBI Valuation Exam?

How should I prepare for the IBBI Valuation Exam?


Like every exam, the IBBI’s valuation exam too needs a study plan. Here are the steps.

Go to IBBI’s website and download the latest syllabus. (https://ibbi.gov.in/SFAsyllabuswef01062020.pdf)

Carefully note down the topic headings in a sheet of paper mentioning the corresponding topic weights. In the below table we have done that for you.

 

 

Weight (%) 

1 

Macroeconomics 

3 

2 

Finance and Financial Statement Analysis 

6 

3 

Professional/Business Ethics and Standards 

4 

4 

General laws 

18 

5 

Financial reporting under Indian Accounting Standards (Ind AS) 

5 

6 

Overview of Valuation 

4 

7 

Valuation Approaches 

3 

8 

Valuation Application 

35 

9 

Judicial Pronouncements on Valuation 

2 

10 

Case Studies 

20 

 

Total 

100 

Quickly run through the subtopics as well since some of the headings alone may not be particularly meaningful. For example, what is difference between valuation approaches and applications?

This first level of familiarization (what is being tested?) with the syllabus topics is necessary. From here on begins your study plan.

Add an additional column and rate yourself against each topic. You may choose your own rating criteria: good, average, poor, or between a score of 1-10 etc. Your rating score will vary depending on the professional background. For instance, specialists in finance (MBA, PG in finance) will find valuation topics easy and topics such as general laws harder. Even within valuation, valuation applications may be harder for some. Not only does it depend on qualification, expertise also varies with work experience.

As the next step, add an additional column and fill it with the number of days of preparation necessary against each topic.

Now, what is preparation?

Most students think solving multiple choice questions (MCQs) is the only preparation needed. This is not true. MCQs is the last part of preparation. Before solving MCQs, you must read the base study materials once. If the topic is hard, you must read the base study materials twice or thrice.

What study materials can we use?

Here is the tricky part. IBBI has not published any study materials relevant for the valuation examination. However, they have hosted a book prepared by one of the Registered Valuer Organizations (RVO) -  IOV Registered Valuers Foundation. You can download the material here https://www.ibbi.gov.in/uploads/resources/Securities_or_Financial_Assets.pdf.

The study material is of acceptable quality. Given the paucity of a single source for preparation, this is a good resource for candidates. However, this is not a complete textbook with explanations for all the topics in the syllabus. This is only a revision material. If you need in-depth knowledge of each topic then this book will not meet your expectations. For a thorough knowledge of all areas, you must read and research the topics with a combination of online resources and offline books. For instance, books written by Ashwath Damodaran are authoritative on the subject of valuation. Similarly, in the School of Valuation, courses (https://schoolofvaluation.com/courses/) offer in depth understanding and testing of topics that appear in the IBBI valuation exam.

Back to the study plan. Once you have estimated the number of days required to ‘master’ each topic (not just solve MCQs), you will get a reasonable idea about the time needed to take the examination.

We suggest that you make this assessment after the 50-hour educational course. We have written a separate post on whether the 50-hour course is sufficient for passing the valuation exam.

Depending on your RVO, the quality of teaching and your learning varies. Therefore, it is better to go back to the drawing board after you have completed the mandatory educational course and do a SWOT analysis of yourself vis-a-vis the syllabus. Only then you may register for the examination.

We notice too many students in a hurry to take up the exam soon after the mandatory course and facing disappointment when they don’t make it. Instead, plan well, study well and take up the examination.

This is one of the methods for exam preparation – plan, study, write. You can come with variations and details that suit you. A candidate following this approach has a sure shot at passing the exam.