IBBI Requires Going Concern Assessment Reports Before CoC Decides On Continuation Of Operations

The Insolvency and Bankruptcy Board of India (IBBI) has amended the corporate insolvency resolution process framework to require resolution professionals to prepare a Going Concern Assessment Report.

This will help the Committee of Creditors (CoC) decide whether the corporate debtor should continue operating during the insolvency process. If operations are to continue, the committee will also determine their scope and duration.

The changes have been brought in through the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2026.

The regulations took effect upon their publication in the Official Gazette.

Under the amended framework, the Going Concern Assessment Report must set out estimated income, expenditure, and cash flows arising from continued operations. It must also include details of working-capital requirements, where any exist, and identify material risks of value erosion that may arise from either continuing or suspending operations.

The CoC will use the report to determine whether the corporate debtor should continue operating during the insolvency process. Where operations are allowed to continue, the committee will also decide their scope and duration.

The regulations introduce additional oversight of insolvency resolution process costs. All such costs incurred up to the first CoC meeting, together with the justification for incurring them, must be placed before the committee for approval.

Once the first meeting has taken place, no further insolvency resolution process costs can be incurred without the committee's prior approval.

Resolution professionals will also be required to place income, expenditure, and cash-flow estimates before the CoC for the period leading up to the next meeting. They must seek approval for proposed costs and provide a comparison between actual expenditure and estimates approved by the committee at the previous meeting.

Another change relates to the evaluation of resolution plans. The CoC must now record its deliberations and rationale on the feasibility and viability of each plan. It must also record the expected realisable value for creditors compared with the fair value and liquidation value, along with its assessment of market-discovery efforts undertaken during the corporate insolvency resolution process.

The amendment further changes the manner in which operational creditors are represented. The committee must now include the eighteen largest unrelated operational creditors.

In cases where creditors other than scheduled banks or public financial institutions hold more than 66% of the voting share in the CoC, the resolution professional must invite the five largest unrelated operational creditors to attend committee meetings as observers without voting rights. These observers must include the three largest authorities that are owed statutory dues, measured by the value of admitted claims.