Elements of a Correctly Prepared Appraisal

The elements of a correctly prepared appraisal are determined by the Uniform Standards of Professional Appraisal Practice. USPAP is the generally recognized ethical and performance standards for the appraisal profession in the United States authorized by Congress.

USPAP elements are as follows:

.1. Name and address of client

2. Name, contact information and qualifications of appraiser

• Statement of professional qualifications - curriculum vitae

3. Signed certification

• Statement that the facts contained in the report is true and correct

• Statement that the reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are the appraiser's personal, impartial, and unbiased professional analyses, opinions, and conclusions

• Statement of disinterest (or stated interest) on the part of the appraiser (no financial or personal interest regarding the property or the parties involved)

• Statement of no bias on the part of the appraiser (regarding the property or the parties involved)

• Statement of fee structure (basis for charge; that it is not contingent upon the value of the objects appraised)

• Clear division of appraisal when one, or more than one, appraiser is involved, who did what (including inspection) and inclusion of all CV's

• Statement of personal physical on-site inspection by the appraiser (or disclosure of other methods/circumstances)

• Disclosure of all parties providing significant assistance with the report or statement regarding that the appraiser is solely responsible for all information in report

• Statement that appraisal is prepared in accordance with USPAP including date of USPAP followed

• All relevant signatures

4. Scope of Work

Determine, perform, and disclose the Scope of Work in the report and identify:

• The problem to solve

• General category of items to appraise (i.e., Fine art, household contents, Modern prints, etc.)

• The client

• The owner

• Intended use of the appraisal

• Intended user(s)

• Type of value (See Type of Valuation Used and Defined, below)

• Definition of value

• Source for definition of value

• Approach to value (See Approach to Value, Used and Defined, below)

• Marketplace (See below)

• Effective date of valuation (See below)

• Assignment conditions (i.e., adequate time to research; adequate lighting; provenance supplied by client; etc.)

• The extent to which the property is identified

• The extent to which the property is inspected

Specify the examination procedure followed (i.e., examined under incandescent light and daylight; used a 10X magnification loupe, etc.)

Specify any normal examination procedure that has been excluded (i.e., did not remove from wall, did not examine under a black light, did not examine clock works, etc.)

• The type and extent of data researched

• The type and extent of analysis applied at the arrived valuations

• USPAP compliancy

5. Purpose of the Appraisal

• Insurance

• Donation

• Estate with a surviving spouse

• Estate with no surviving spouse

• Tax loss

• Equitable distribution

• Estate planning

• Inventory

• Damage

• Loss

• Collateral

• Liquidation

• Net worth

6. Type of Report (must be clearly and conspicuously noted)

• Self-contained

• Summary

• Restricted use

7. Approach to Value Used and Defined (each method must be mentioned and discussed as to its applicability in this particular appraisal situation)

• Market Data Comparison Approach

• Cost Approach

• Income Approach

8. Type of Valuation Used and Defined

• Retail Replacement Cost

• Retail value

• Marketable Cash Valuation

• Liquidation value

• Salvage value

• Replacement Cost New (RCN)

9. Marketplace in which Appraisal is Applied

• Auction (high end, mid range, etc.)

• Retail

• Wholesale

• Thrift shops; consignment stores

• Geographic location

10. Relevant Dates (note whether current, prospective, or retrospective)

• Date of on-site inspection

• Effective/valuation date of the appraisal (assigned or specific)

• Date appraisal report issued

• Other dates as applicable: date of death, date of donation, date of separation, dates of research, revised date

11. Description of Appraised Objects

• Item

• Quantity (if pair, set, etc.)

• Country/region of origin

• Medium

• Date(s)/period of creation

• Markings (e.g. signatures, maker's marks, manufacturer's marks, inscriptions)

• Full detailed description (including all observable physical characteristics)

• Dimensions (appropriate measurements given the object i.e., an appraiser would weigh a piece of silver, but not a painting)

• Condition (A representation as to condition must always be included and qualified, whether in a per object or per group; not as a general statement for the entire report)

• Frame description and condition.

• Firm statement of value as appropriate to the purpose of the appraisal.

12. Disclaimers, Extraordinary Assumptions and Limitations

• Statement in belief of authenticity (only that the objects appraised correspond to the descriptions provided in the appraisal); but that the appraisal is NOT a certificate of authenticity

• Statement of the number of pages in the appraisal

13. For Appraisals Relating to IRS Usage Estate (E) or for Donation (D)

• Statement that appraiser has not been disqualified by the IRS (E and D)

• Statement that the appraiser acknowledges that the appraisal will be used in connection with a tax return or claim for a tax refund and that a substantial or gross valuation or misstatement resulting from the appraisal may subject the appraiser to a civil penalty

• Appraiser's Tax ID# (E and D)

• Statement of the appraiser's qualifications specific to the item(s) appraised (D)

• Statement of how the objects were acquired and prices paid (if known) (D)

• Completion of IRS form 8283 (D - separate from report)

• Related Use (D)

• Donee (D)

14. Additional Description

• Name of artist/craftsperson

• Name of historical style/school of work

• Title of work

• Provenance

• Catalogue raisonné number or other reference

• Frame information

• Exhibition history

• Publication history

• Other notes (importance of work, one of a pair, etc.)

15. Support of Valuation Conclusions

• State of the market discussion/market analysis

• Material provided by consultants (identified)

16. Support of Valuation Conclusions (if applicable)

• Comparables (fully presented and annotated as appropriate)

• Biography of the artist/craftsperson/school

• Related analysis and discussion of the object/artist/school, etc