It is quite understandable to see some intangible assets in a company's balance sheet like patents, trademarks, licenses, copyrights etc.. But, it can be ridiculous to see companies evaluating some impalpable parameters like employees, clients, customers etc.. Companies even started discounting the future value derived from these people (Which in anyway has no guarantee) and arriving at huge figures which can assist them to inflate their balance sheets easily. (Though Brand valuation is a different permissible intangible asset)
In the world of highly volatile parameters, how far is it excusable to accept these amusing figures? Going with these comical calculations, even a Pan Shop can be worth 10Crores! Quicker reforms in Regulation of Corporate Governance are required. Hope Mr.U.K.Sinha comes to the rescue of investors.
