ART

CORPORATE PAINTING VALUATION

Corporate Art Collections — The Balance Sheet, the Audit, and the M&A Due Diligence

Many Indian corporations — including banks, insurance companies, infrastructure developers and large family-owned businesses — hold significant painting collections on their balance sheets.

Whether assembled over decades for offices, lobbies and boardrooms or acquired as a deliberate investment in Indian art, these collections require a structured valuation approach for statutory audit, financial reporting and corporate transactions.

A2Z Valuers provides Government Approved Painting Valuation for corporate collections, including annual FMV certification and comprehensive painting schedules required during M&A due diligence.

FMV Annual Fair Market Value

AUDIT Balance Sheet Certification

M&A Due Diligence Support

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CORPORATE ART VALUATION

Three Financial Reporting Questions

01 How should the painting collection be classified?

02 What is the collection's current FMV?

03 What value and risks should be disclosed during M&A due diligence?

Independent • Evidence-Based • Institutional

ACCOUNTING CLASSIFICATION

Ind AS 40 vs Ind AS 38 — The Classification Question

The accounting classification of paintings on the corporate balance sheet determines the applicable financial reporting treatment and the valuation framework to be considered.

01 IND AS 40

Investment Property

If paintings are held as investments for long-term capital appreciation — rather than for the corporation's operational use or ordinary-course sale — they may qualify as investment property under Ind AS 40.

FAIR VALUE MODEL Fair value measured at each balance sheet date

Changes in fair value are recognised in profit or loss under the applicable fair value model.

02 IND AS 38

Heritage & Cultural Collection

Where paintings are held as part of a corporate collection for a heritage or cultural objective, rather than primarily for capital appreciation, the supplied framework identifies Ind AS 38 as the relevant classification consideration.

REVALUATION MODEL Revaluation at sufficient frequency

The objective is to ensure that the carrying amount does not differ materially from FMV.

03 IND AS 2

Painting Inventory

Paintings held by art dealers, galleries or art businesses as stock-in-trade are treated as inventory under Ind AS 2.

INVENTORY BASIS Lower of Cost and Net Realisable Value

The valuation basis therefore differs from a corporate collection held as an investment or cultural asset.

CLASSIFICATION MATTERS The purpose and manner in which the paintings are held determine the appropriate valuation and reporting context.

FMV

ANNUAL AUDIT CERTIFICATION

The Annual Audit FMV Certificate

For corporate collections where periodic FMV reporting is required, the valuation certificate must provide sufficient detail for the statutory auditor to identify the assets and understand the basis of the concluded value.

GOVERNMENT APPROVED VALUATION Painting-by-Painting FMV Assessment

CERTIFICATE SHOULD ADDRESS Each Painting. Each Value. Each Evidence Point.

Artist & Title

Identification of each painting by artist, title, medium and dimensions.

Attribution Confidence

The certificate records the relevant attribution and authentication confidence for each work.

Current FMV

Fair Market Value is established using current auction-market comparables and the appropriate valuation methodology.

Balance Sheet Date

The valuation is aligned with the relevant balance sheet date for the reporting requirement.

Auditor-Ready Schedule

A structured painting schedule supports the statutory audit and financial reporting review.

CORPORATE TRANSACTIONS

M&A Due Diligence — Know What the Collection Is Worth

When an acquisition target holds a significant painting collection, the buyer's due diligence team requires more than a single aggregate figure. The collection needs an independent, painting-level schedule.

DUE DILIGENCE RISK

A painting collection can contain hidden value and hidden risk.

Attribution, authentication, provenance, export restrictions and current market value can all influence the financial significance of a corporate art collection.

INDEPENDENT PAINTING SCHEDULE

Attribution & Authentication

Identify paintings with unresolved attribution or authentication issues that may represent contingent value risk.

AATA Implications

Identify relevant works with AATA implications, including pre-1926 works that may face export restrictions.

Condition & Provenance

Document the condition, provenance and available authentication evidence affecting the collection's market position.

Aggregate Collection FMV

Establish the aggregate FMV of the collection for consideration within the purchase price allocation (PPA) analysis.

M&A PAINTING SCHEDULE Painting-level evidence converts an art collection from an overlooked balance-sheet item into a clearly documented transaction asset.

CORPORATE VALUATION FRAMEWORK

From Collection Register to Defensible FMV

01 Identify Artist, title, medium, dimensions and collection records.

02 Classify Determine the relevant financial reporting context.

03 Research Analyse auction comparables, attribution and market evidence.

04 Value Establish the painting-level Fair Market Value.

05 Certify Prepare the required corporate valuation schedule.

CORPORATE PAINTING VALUATION

Have a Corporate Art Collection? Establish Its Defensible Value.

Whether the requirement is an annual audit FMV, balance-sheet certification or M&A due diligence, obtain an independent painting valuation schedule prepared around the specific corporate requirement.

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