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55

USPAP 2018-2019 Edition

© The Appraisal Foundation

STANDARD 9: BUSINESS APPRAISAL, DEVELOPMENT

In developing an appraisal of an interest in a business enterprise or intangible asset, an appraiser

must identify the problem to be solved, determine the scope of work necessary to solve the

problem, and correctly complete the research and analyses necessary to produce a credible

appraisal.

Comment: STANDARD 9 is directed toward the substantive aspects of developing a credible appraisal of an

interest in a business enterprise or intangible asset.

STANDARDS RULE 9-1

In developing an appraisal of an interest in a business enterprise or intangible asset, an appraiser must:

(a) be aware of, understand, and correctly employ those recognized approaches, methods and procedures

that are necessary to produce a credible appraisal;

Comment: Changes and developments in the economy and in investment theory have a substantial impact

on the business and intangible asset appraisal profession. Important changes in the financial arena, securities

regulation, financial reporting requirements, and law may result in corresponding changes in appraisal theory

and practice.

(b) not commit a substantial error of omission or commission that significantly affects an appraisal; and

Comment: An appraiser must use sufficient care to avoid errors that would significantly affect his or her

opinions and conclusions. Diligence is required to identify and analyze the factors, conditions, data, and other

information that would have a significant effect on the credibility of the assignment results.

(c) not render appraisal services in a careless or negligent manner, such as by making a series of errors that,

although individually might not significantly affect the results of an appraisal, in the aggregate affect the

credibility of those results.

Comment: Perfection is impossible to attain, and competence does not require perfection. However, an

appraiser must not render appraisal services in a careless or negligent manner. This Standards Rule requires

an appraiser to use due diligence and due care.

STANDARDS RULE 9-2

In developing an appraisal of an interest in a business enterprise or intangible asset, an appraiser must:

(a) identify the client and other intended users;

94

(b) identify the intended use of the appraiser’s opinions and conclusions;

95

Comment: An appraiser must not allow the intended use of an assignment or a client’s objectives to cause

the assignment results to be biased.

(c) identify the standard (type) and definition of value and the premise of value;

(d) identify the effective date of the appraisal;

(e) identify the characteristics of the subject property that are relevant to the standard (type) and definition

of value and intended use of the appraisal, including:

(i)

the subject business enterprise or intangible asset, if applicable;

(ii)

the interest in the business enterprise, equity, asset, or liability to be valued;

94 See Advisory Opinion 36,

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

.

95 See Advisory Opinion 36,

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

.

See also

FAQ 117-

241

FAQ

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