How to Calculate Net Worth | Assets Valuation Rules
Looking for valuation rules to help you calculate net worth? If yes, you’re in the right place. Here, we will discuss all the relevant rules and guidelines for calculating the net worth of an individual, family, company, firm, or any other entity. Net worth calculation is commonly required for various purposes such as visa applications, bank loans, insurance, tenders, regulatory submissions, and more. Here we have covered everything about net worth & CA report in simple language. After reading this page, you’ll be able to easily calculate the net worth of any person or entity. Wherever required we have used example and visual presentation for easy understanding.
We will discuss the valuation rules for each type of asset that falls under the following categories:
Liquid Assets
Movable Assets
Immovable Assets (Property)
Liabilities
We will also discuss the calculation method and the basis of documentation for asset, including:
Which documents to check
How to verify ownership
Which value to consider for the asset
Rules applicable to that asset
- How to Prepare Net Worth
- Reporting Method
- Valuation Rules
Wants to Prepare Net Worth Certificate?
Table of Content | Asset Valuation Rules
What is Net Worth?
Net Worth is the net assets value of any person/company after deducting all the liabilities. Thus, Net Worth is the total sum of all the assets of any person minus total liability of that person.
Means, Net Worth = Total Assets – Total Liabilities
Net Worth also known as Net Wealth, Net Assets, Worthiness of person.
Types of Assets That Can Be Counted in Net Worth
Mainly, There are Class of Assets Category which can be considered in net worth calculation, these are as follows
1. Liquid Assets: Liquid Assets are those assets which can be realize in cash on demand, means whenever person want to convert that asset in cash it does not take too long, Means process of asset to cash conversion is fast, Accurate and reliable. Example of Liquid Assets are Cash in hand, Bank Balances, Current Account Balance, Listed Shares, Certain Mutual Funds, PPF, Fixed Deposits, Money Market Instruments etc.
2. Movable Assets: Movable assets are physical or financial assets that can be easily moved or transferred from one place to another without altering their form or function. Unlike immovable assets (like land or buildings), movable assets are not fixed to one location. Example Car, Gold, Stock, Machinery, etc
3. Immovable Assets: Immovable Assets are fix structured Property Eg. land, Building, Flat, Bungalow, Warehouse, Factor, Office, Shop, Showroom etc.Â
4. Liabilities (Negative Assets): Liabilities are those which required to pay by person. generally it can be loan, borrowed money, credit card etc.
5. Intangible Assets & Contingent Liability: Intangible Assets are trademarks, brand value, etc. Where contingent liabilities are those responsibility and liability which may arise in future.
Types Valuation and Values
Depend on assets class and assets it have valuation method, and identifiable value. During Net Worth Calculation most relevant method should be used. Such Method/types are as follows
Market Value
The price at which a knowledgeable buyer is willing to purchase an asset and a knowledgeable seller is willing to sell it. It is commonly referred to as the latest value, current price, or traded value.Realizable Value
The value received when an asset is sold or disposed of under current market conditions. Also known as Net Realizable Value (NRV).Insurable Value
The value agreed upon by an insurance company for insuring an asset.Book Value
The value at which an asset is recorded in the accounting books. It typically includes all capitalized costs in accordance with accounting standards (e.g., ICAI Accounting Standards).Depreciated Value
The value of an asset after accounting for depreciation based on its usage. This is usually calculated using either the Straight Line Method (SLM) or the Written Down Value (WDV) method.Net Asset Value (NAV)
The per-unit net value of a mutual fund. NAV is declared daily by mutual fund companies for each plan.Surrender Value
The amount receivable when an asset, typically an insurance policy, is surrendered before maturity.Stamp Duty Value
The official value of an asset (usually immovable property) as determined by the state government for the purpose of calculating stamp duty.Investment Value
The total amount invested. This is the simple sum of all investments made in various assets.Maturity Value
The amount receivable on the completion of an asset’s term or duration, such as in fixed deposits or insurance plans.Residual or Scrap Value
The minimum expected value of an asset at the end of its useful life.Outstanding Value
The remaining amount of a loan or liability that is yet to be paid.Anticipated Value
The value that a buyer expects to realize from an asset in the near future, based on projections or expectations.Self-Declared Value
The value of an asset as declared by its owner. Often used when supporting documents are not available.Balance/Running Value
The current balance available in bank accounts, provident funds, or other running accounts.Replacement Value:
The cost to replace an asset with a new one of similar kind and function at current market prices.Fair Market Value (FMV):
A more formal term used in taxation and legal contexts, similar to market value, but usually determined under certain legal standards.Liquidation Value:
The estimated amount that would be received if the asset had to be sold quickly, often under distress conditions.
Relevant Document for Asset (Checking for Ownership & Value)
Calculation of Net Worth depends on the value of assets and which assets are considered. Only monetary (financial) assets are included in net worth.
To support this calculation, documents are required that help verify the following:
Ownership of Assets:
– Documents that prove the person legally owns the asset (e.g., property papers, registration, account statements).Asset Value:
– Documents that support the current value of the asset or provide a reliable basis for valuation (e.g., valuation reports, market rates, investment statements).Legitimate Holding as of the Current Date:
– Proof that the person still holds the asset, such as recent bills, account balances, or updated statements.
Liquid Assets - Valuation Rules, Document Options to Check (Asset Wise)
Each liquid asset needs to be valued separately. To calculate net worth, the latest value of each asset must be considered.
Below is the document checklist that helps justify both ownership and asset value. We have also mentioned, asset-wise, which value should be included in the net worth calculation.
(ANY ONE DOCUMENT IS SUFFICIENT OUT OF CHECKLIST FOR EACH ASSET)
1. Saving Bank Balance
Documents to Check:
Passbook
Bank statement
Bank balance confirmation letter
Screenshot of balance
Latest SMS from bank
Value to Consider:
Latest available balance as on the current date
2. Fixed Deposits (FDs)
Documents to Check:
FD receipts
Bank FD confirmation letter
Bank statement showing FD details
Value to Consider:
Principal + accrued interest as on current date
OR – Value of Investment
3. Recurring Deposits (RDs)
Documents to Check:
RD passbook
Bank statement
RD confirmation letter
Value to Consider:
Total amount deposited + interest till date
OR Value of Investment
4. Mutual Funds
Documents to Check:
Mutual fund statement
Latest NAV from fund house
Online investment dashboard
Folio Extract
Value to Consider:
Units × Latest NAV = Latest NAV
5. Shares / Equity Investments
Documents to Check:
Demat account statement
Trading account summary
Broker’s holding report
Value to Consider:
Market value as per latest closing price
- If Shares are unlisted (that cannot be considered liquid – value of acquired/reference value can be used)
6. Life Insurance (with Surrender Value)
Documents to Check:
Insurance policy statement
- Last Payment Receipt
Surrender value certificate from insurance company
Value to Consider:
Latest surrender value (not maturity value)
- If Surrender value not available (alternate you can use invested value – after reading policy terms)
7. Public Provident Fund (PPF)
Documents to Check:
PPF passbook
Account statement from post office or bank
Value to Consider:
Latest balance as per passbook or statement
8. Employee Provident Fund (EPF)
Documents to Check:
EPF online statement (UAN portal)
Employer statement (if applicable)
Value to Consider:
Latest balance shown under UAN
9. National Savings Certificate (NSC), KVP, Post Office Schemes
Documents to Check:
Certificate or investment receipt
Post office passbook
Interest accrual statement
Value to Consider:
Current value (including accrued interest)
OR – Invested Value
Movable Assets | Document & Valuation Rules for Net Worth Calculation
Movable assets are also part of net worth. In preparation of report liquid assets can be merged with movable assets. Let’s Check Valuation Rule of Movable assets and relevant document checklist.
1. Gold / Jewelry
Documents to Check:
Purchase bill/invoice
Valuation certificate from registered valuer or jeweler
Value to Consider:
Current market rate × weight (less making charges, if needed)
- OR Value as per Valuation Report
2. Vehicles (Car, Bike, etc.)
Documents to Check:
RC book / registration certificate
Insurance policy
Market valuation (if needed)
Value to Consider:
Market resale value (not invoice price)
- Depreciated Value/Book Value
- Insurable Value
3. Business or Partnership Interest
Documents to Check:
- Balance sheet of the business
- Capital account statement
- Valuation by CA (if required)
Value to Consider:
- Capital contribution + share of reserves/profits
- Balance Sheet Value
- Book Value
4. Loans Given to Others
Documents to Check:
Loan agreement or declaration
Bank transfer proof
Repayment schedule
Value to Consider:
Outstanding principal + due interest
- (only if not doubtful) – Recoverable Value
5. Bonds / Debentures Government Securities
Documents to Check:
Bond certificate
Online account statement
Value to Consider:
Market value or maturity value (based on time left)
- Invested Value
6. GIC and Other Deposits
Documents to Check:
- Letter
Receipt
Value to Consider:
Value of Transaction
7. Unlisted Shares
Documents to Check:
- Holding Statement
Audit Report
Value to Consider:
Value as per investment or last audited balance sheet value (Reference)
8. High Value Goods/Assets
Documents to Check:
- Purchase Invoice
Value to Consider:
Purchase Value/Realizable Value
9. Other Movable Asset
Documents to Check:
- Purchase Document
Other Document which establish ownership
Value to Consider:
Market Value/Investment value
Immovable Assets (Property) | Valuation Rules
Estimating property value is one of the most challenging parts of net worth calculation.
However, based on market practices, practical considerations, and the purpose of valuation, the following methods and supporting documents can be used to ensure a smooth and reliable process.
Document which shows the ownership, Size (Area) of property, location (Address) can be considered in Immovable Assets Consideration. For Value of Property Following rules can be used.
Agricultural Land / Rural Plot / Land / Farm / Farmhouse
Documents to Check (any one or more of the following):
Land ownership documents
Registered purchase agreement
Power of Attorney (if applicable)
Property card
Patta record
7/12 extract or Khata certificate
Valuation certificate from a certified valuer or local authority
Value to Consider (choose based on suitability and purpose):
Market value (as per current market conditions)
Circle rate / Stamp duty value (as per government records)
Purchase value (as per sale deed)
Value stated in a certified valuation report
Self-declared value (acceptable in select cases, especially if the value is not substantial and the purpose is for visa applications)
2. Real Estate / Property Includes: Bungalow, Flat, Apartment, Shop, Office, Warehouse, Showroom, Tenement, Commercial Unit, Residential Plot, Agricultural Land, Farmhouse, etc.
📄 Documents to Check (any one or more of the following):
Land ownership documents
Registered purchase agreement / sale deed
Power of Attorney (if applicable)
Property card
Patta record
7/12 extract or Khata certificate (as applicable by region)
Property tax bill or municipal records
Valuation certificate from a certified valuer or local authority
Stamp duty/circle rate value statement
Value to Consider (choose based on suitability and purpose):
Market value (as per current real estate trends and locality rates)
Stamp duty value / Circle rate (as per government guidelines)
Purchase value (as per registered sale deed)
Certified valuer’s price (from a registered valuer’s report)
Self-declared value (allowed in limited cases, especially if the property value is not substantial and the purpose is for a visa or financial affidavit)
Liabilities | Value Rules
Liabilities are generally loans, and other obligations. Current Statement need to check and correct outstanding balance required to consider. Such value are negative for net worth, means it will be deducted from net worth.
Liabilities / Loans
(Includes: Home Loan, Personal Loan, Vehicle Loan, Business Loan, Education Loan, Credit Card Dues, Overdraft, Loan Against Property, Gold Loan, etc.)
📄 Documents to Check (any one or more of the following):
Latest loan account statement from the bank or NBFC
Sanction letter and repayment schedule
Outstanding balance confirmation letter
EMI receipt or bank statement showing repayments
Overdraft account summary
Credit card outstanding summary
Loan agreement (if other documents are not available)
Value to Consider (choose based on availability and purpose):
Outstanding principal amount (as per latest loan statement)
Overdue interest (if any) – to be added to the liability
Total balance payable – for credit cards or overdrafts
Intangible Assets
Intangible Assets are often not considered in net worth. However, if due to purpose and use if it is required to considered then follow below method.
Intangible Assets
(Includes: Patents, Copyrights, Trademarks, Brand Value, Goodwill, Software Licenses, Intellectual Property Rights, Digital Assets, Franchise Rights, etc.)
Documents to Check (any one or more of the following):
Certificate of registration (patents, trademarks, copyrights, etc.)
License agreements or software purchase contracts
Franchise or brand ownership documents
Balance sheet or audited financials showing intangible assets
Valuation report from a certified valuer or CA
Legal ownership documents (IP assignment, deeds)
Proof of income generated from intangible (e.g., royalty statements)
Value to Consider (choose based on availability and purpose):
Book value (as per audited financials)
Valuation report value (from registered valuer or CA)
Purchase cost or development cost (if applicable and capitalized)
Contingent Liabilities
As name suggest it is not considered in individual net worth. However, if required you can use follow rules.
Contingent Liabilities
(Includes: Guarantees given, Pending litigation, Letter of credit, Unacknowledged debt, Legal claims, Tax disputes, Surety for third-party loans, Performance guarantees, etc.)
Documents to Check (any one or more of the following):
Guarantee agreement or letter issued
Court case documents or legal notices
Letters of credit issued by bank
Tax demand notices or pending assessments
Surety documents or third-party loan records
Company balance sheet or audit report disclosing contingent liabilities
Value to Consider (choose based on availability and relevance):
Disclosed amount in financial statements
Estimated liability as per legal or professional opinion
Amount mentioned in official notices or contracts
Co-owned Assets & Joint Holding Assets | Valuation Rules
Normally Joint owned Assets required to consider up to the owned portion (as per pro-rata basis). However, if purpose and requirement allow then you can consider whole asset subject to joint owner is family member and right of joint owner is not limited by any portion.
If you need to assess portion of value, first you need to find out value of assets based on above discussed rules. then follow these steps
Identify the Asset Clearly
Determine the type of asset: real estate, bank account, fixed deposit, mutual fund, vehicle, etc.
Check if it is jointly held (two or more owners).
Check Ownership Ratio
Refer to legal documents like the sale deed, FD certificate, or account holder details to find the ownership share.
If no ratio is specified, assume equal share or take self-declaration (commonly 50:50 for two holders).
Determine the Total Value of the Asset
Use appropriate valuation method (e.g., market value for property, latest balance for bank account).
Use certified valuation reports if required (especially for high-value assets).
Apply the Ownership Share
Multiply the total asset value by the individual’s ownership percentage.
Example:
If property value = ₹1 crore and ownership is 50%, then individual’s share = ₹50 lakhs.
Include Only the Individual’s Share in Net Worth
Report only the individual’s portion (e.g., ₹50 lakhs) in their net worth statement.
Foreign Assets | Valuation Rules for Assets Located Outside India
Even assets located outside India, still that assets are required to considered for net worth calculation. After Ownership due care, asset value required to convert as per currency conversion rate.
Foreign assets form an important part of an individual’s net worth, especially in the case of visa applications, global business dealings, or financial declarations. These assets must be valued accurately and fairly while converting values into Indian Rupees (INR) for reporting.
Types of Assets Can be Considered: All the Liquid, Movable and Immovable Assets
Document Check: Which Justify Ownership and Value (Eg. Bank Statement)
Value: As per Latest Date (as per above rules of valuation)
Conversion in INR: As per Latest Foreign Exchange Rate or RBI Reference Rate.
Important Notes:
Proper ownership documentation is essential to avoid legal or compliance issues.
Assets held jointly with foreign residents must be declared with proportional ownership.
Purpose Wise Consideration | Modification
The format, content, and method of calculating Net Worth may vary depending on the purpose for which it is required. While the core principle remains the same — Net Worth = Total Assets – Total Liabilities — the presentation, documentation, asset selection, and depth of details can change based on the end use.
Common Purposes for Net Worth Calculation:
Visa or Immigration Applications
Bank Loans / Financial Sanctions
Business or Partnership Declarations
Government Tenders / Registrations
Insurance or Financial Planning
Personal Use or Family Planning
Regulatory or Tax Declarations
Modifications in Presentation:
Table Format or List Format depending on clarity needs
Family-wise or Member-wise Bifurcation (for joint net worth)
Document Reference Columns for supporting proof
Valuation Notes or assumptions stated clearly
Currency conversion explanation (if required)
How Content and Presentation Are Modified Purpose-wise:
Depend on use and requirement presentation and format can be changed. Check Following important Purpose wise element of presentation
1. Visa / Immigration:
Double Currency Format (INR + Foreign Currency)
Joint family assets often considered
Simple language and clear breakdown
Self-declared values may be allowed (for minor items)
Emphasis on liquid and movable assets
2. Bank Loans:
Strict documentation required
Focus on high-quality liquid assets and income-generating assets
Property valuation often from certified valuers
All liabilities must be clearly shown
May require asset ownership proof in borrower’s name only
3. Business Use (Partnership/Startup):
Business capital and investment values included
Presentation includes professional layout
May require balance sheet-style format
Goodwill and intangible assets may be highlighted
4. Government Tenders / Registration:
Certified by CA with UDIN
Clear segregation of assets and liabilities
Net worth shown in INR only
Historic value or audited figures may be needed
5. SEBI / DEMAT Use:
- Report must be on CA’s letterhead, certified, and signed
- Net worth statement should be as of a specific date
- Should match with audited financial statements
- Include registration category and PAN/registration number
- Must be submitted in prescribed SEBI formats, if applicable
6. Insurance / Wealth Planning:
Net worth used for risk assessment or asset planning
May include expected future assets or maturity values
Contingent liabilities may be disclosed
Rules for Chartered Accountant | Net Worth Certification
Chartered Accountants play a key role in certifying Net Worth for individuals, families, companies, and firms. The certificate must be prepared with due professional care, in line with accounting standards, ICAI guidelines, and applicable regulations such as SEBI, RBI, or visa authorities.
Rules & Responsibilities for CA While Issuing Net Worth Certificate:
Basis of Certification:
Net worth should be computed as:
Net Worth = Total Assets – Total LiabilitiesAssets must be backed by valid supporting documents.
Intangible, fictitious assets, and deferred expenses must be excluded unless specifically required.
Verification of Ownership and Value:
CA must verify ownership of assets using documents such as sale deeds, account statements, valuation reports, etc.
Values must be based on:
Book value (for statutory use)
Market value (for visa or personal financial declarations)
Certified valuation (for property or gold, if applicable)
Self-declared value (only in minor or non-statutory cases)
Date Specificity:
The certificate must mention the “as on” date clearly.
Values must be accurate as of that date, with the latest available data.
Use of UDIN (Mandatory):
As per ICAI guidelines, all Net Worth Certificates must be issued with a UDIN (Unique Document Identification Number).
UDIN must be generated through the ICAI portal on the same date of signing.
Proper Disclosure Format:
Must be issued on CA’s letterhead.
Include: Name of Person/Entity, Identity, Address, Assets Schedule, Value Basis etc.
Signature, seal, and membership number
No Misrepresentation:
CAs must not include unverifiable assets, fictitious values, or inflated figures.
Use disclaimers if values are estimated or provided by the client but not verified independently.
Important Notes for CAs (Simplified)
Always verify documents, even for trusted clients.
Use audited data for third-party use (visa, SEBI, loan).
Keep supporting documents as per ICAI Guidelines.
Add disclaimer if values are client-declared.
Maintain confidentiality and follow ICAI ethics.
Use correct format—don’t copy generic templates.
Format may vary by purpose (SEBI, visa, loan, etc.).
Check Format and Sample Copy
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