USPAP 2018-2019 Edition
© The Appraisal Foundation
• it is required to properly develop credible opinions and conclusions;
• the appraiser has a reasonable basis for the extraordinary assumption;
• use of the extraordinary assumption results in a credible analysis; and
• the appraiser complies with the disclosure requirements set forth in USPAP for extraordinary assumptions.
g) identify any hypothetical conditions necessary in the assignment; and
Comment: A hypothetical condition may be used in an assignment only if:
• use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable
analysis, or for purposes of comparison;
• use of the hypothetical condition results in a credible analysis; and
• the appraiser complies with the disclosure requirements set forth in USPAP for hypothetical conditions.
(h) determine the scope of work necessary to produce credible assignment results in accordance with the
SCOPE OF WORK RULE.
STANDARD RULE 7-3
In developing a personal property appraisal, when necessary for credible assignment results, an appraiser
(a) analyze the property’s current use and alternative uses as relevant to the type and definition of value and
intended use of the appraisal;
Comment: In the context of personal property, value can be a function of the choice of the appropriate
market or, in some cases, market level for the type of item, the type and definition of value, and the intended
use of the appraisal.
The appraiser must consider the various uses of the property when viable alternative uses exist and when
those alternative uses may result in a different value.
(b) define and analyze the appropriate market consistent with the type and definition of value; and
Comment: The appraiser must recognize that there are distinct levels of trade (measureable marketplaces)
and each may generate its own data. For example, a property may have a different value at a wholesale level
of trade, retail level of trade, or under various auction conditions. Therefore, the appraiser must analyze the
subject property within the correct market context.
(c) analyze the relevant economic conditions that exist on the effective date of the valuation, including
market acceptability of the property and supply, demand, scarcity or rarity.
STANDARDS RULE 7-4
In developing a personal property appraisal, an appraiser must collect, verify, and analyze all information
necessary for credible assignment results.
(a) When a sales comparison approach is necessary for credible assignment results, an appraiser must
analyze such comparable sales data as are available to indicate a value conclusion.
(b) When a cost approach is necessary for credible assignment results, an appraiser must:
analyze such comparable cost data as are available to estimate the cost new of the property; and
analyze such comparable data as are available to estimate the difference between cost new and
the present worth of the property (depreciation).
74 See Advisory Opinion 28,
Scope of Work Decision, Performance, and Disclosure
, and Advisory Opinion 29,
An Acceptable Scope of Work.