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USPAP 2018-2019 Edition

© The Appraisal Foundation

5

DEFINITIONS

INTANGIBLE PROPERTY (INTANGIBLE ASSETS):

nonphysical assets, including but not limited to franchises,

trademarks, patents, copyrights, goodwill, equities, securities, and contracts as distinguished from physical assets

such as facilities and equipment.

INTENDED USE:

the use(s) of an appraiser’s reported appraisal or appraisal review assignment results, as identified

by the appraiser based on communication with the client at the time of the assignment.

7

INTENDED USER:

the client and any other party as identified, by name or type, as users of the appraisal or

appraisal review report by the appraiser, based on communication with the client at the time of the assignment.

8

JURISDICTIONAL EXCEPTION:

an assignment condition established by applicable law or regulation, which precludes

an appraiser from complying with a part of USPAP.

MARKET VALUE:

a type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of

ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the definition of the

term identified by the appraiser as applicable in an appraisal.

Comment: Forming an opinion of market value is the purpose of many real property appraisal assignments,

particularly when the client’s intended use includes more than one intended user. The conditions included in

market value definitions establish market perspectives for development of the opinion. These conditions may

vary from definition to definition but generally fall into three categories:

1.

the relationship, knowledge, and motivation of the parties (i.e., seller and buyer);

2. the terms of sale (e.g., cash, cash equivalent, or other terms); and

3. the conditions of sale (e.g., exposure in a competitive market for a reasonable time prior to sale).

Appraisers are cautioned to identify the exact definition of market value, and its authority, applicable in

each appraisal completed for the purpose of market value.

MASS APPRAISAL:

the process of valuing a universe of properties as of a given date using standard methodology,

employing common data, and allowing for statistical testing.

MASS APPRAISAL MODEL:

a mathematical expression of how supply and demand factors interact in a market.

PERSONAL PROPERTY:

identifiable tangible objects that are considered by the general public as being “personal”

- for example, furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and equipment; all tangible

property that is not classified as real estate.

PRICE:

the amount asked, offered, or paid for a property.

Comment: Once stated,

price

is a fact, whether it is publicly disclosed or retained in private. Because of the

financial capabilities, motivations, or special interests of a given buyer or seller, the price paid for a property may or

may not have any relation to the

value

that might be ascribed to that property by others.

REAL ESTATE:

an identified parcel or tract of land, including improvements, if any.

REAL PROPERTY:

the interests, benefits, and rights inherent in the ownership of real estate.

Comment: In some jurisdictions, the terms

real estate

and

real property

have the same legal meaning. The

separate definitions recognize the traditional distinction between the two concepts in appraisal theory.

REPORT:

any communication, written or oral, of an appraisal or appraisal review that is transmitted to the client or a

party authorized by the client upon completion of an assignment.

SCOPE OF WORK:

the type and extent of research and analyses in an appraisal or appraisal review assignment.

9

7 See Advisory Opinion 36,

Identification and Disclosure of Client, Intended Use, and Intended Users

.

8 See Advisory Opinion 36,

Identification and Disclosure of Client, Intended Use, and Intended Users

.

9

See SCOPE OF WORK RULE.

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