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Welcome to another edition of the ACA
Appraiser's Update.
Once again,
this Update is packed with hard-to-find,
informative and practical how-to information for the
personal property appraiser:
- We address the confusion regarding transmittal
letter nomenclature and provide tips on how to best
make use of it,
- A related article addresses styles of reports
(including letter-style and form-style) as
well as suggested methods of presenting the required
elements of information within each,
- A USPAP Q&A addresses the importance of
clearly identifying your client, and
- ACA partner Bill Novotny provides a brief
overview of a recently-held IRS symposium for personal
property appraisers.
By the way, did you know that The Appraisal
Foundation recently published a personal
property version of the 15-hour USPAP Course
Student Manual?! Entitled 15-Hour Personal
Property Appraisal USPAP Course Student
Manual, it is available only through course
providers. The new student manual
contains personal property real world examples as
opposed to real estate examples as are included in the
original student manual. In addition, new discussions
place greater emphasis on the details of the
personal property appraisal development and reporting
Standards 7 and 8. Now that it's available,
personal property appraisers should be sure to attend
only a personal property version of USPAP taught by an
AQB-certified National USPAP Course instructor
whose presentation makes use of the new student
manual. Henceforth, all USPAP offerings presented by
Appraisal Course Associates will make use of this new
student manual.
 Sincerely,
Dave Maloney and Bill Novotny
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| Cover Letter vs. Transmittal Letter vs. Cover
Document: What's the Difference? |
Understanding these terms will improve your
report
 There has long been a
misunderstanding related to definitions associated with
and use of the terms cover letter,
transmittal letter and cover
document. Do they differ? Are they
one-in-the-same? Must one or the other be
used?
The term "cover document" was first used in
association with appraisals in 1994 when a standardized
core course in personal property appraisal theory and
principles was written by this author as team-leader for
a major appraisal society. Suffice it to say that the
term "cover document" is synonymous with the term
"transmittal letter" which has been and currently is in
even wider use within other appraisal disciplines.
Indeed, even USPAP makes mention of the term
"transmittal letter" in its Ethics Rule and in
the Q&A that is quoted within this article.
USPAP does not make any mention of the term "cover
document." For the purposes of this discussion, we will
equate "cover document" with "transmittal letter" and
will henceforth make use of the latter term while
discontinuing use of the former.
Of the two remaining, there is
no consensus on the use or nomenclature of the cover
letter and transmittal letter among the various
appraisal disciplines, but the following discussion will
assist you to properly make use of them regardless of
what they are called. Note, too, that there is no USPAP
requirement for either a cover letter or a transmittal
letter, notwithstanding USPAP's Q&A and Ethics Rule
mentions of the transmittal letter. Though not required,
both types of letters often have their place in the
preparation of a professionally designed and coherent
report... read entire
article |
| Appraisal Report Structure |
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Structure reports to
your individual taste 
There is no single approved format for
all personal property appraisal reports, nor is there a
required method of presenting information within the
document. Appraisal reports must be written with the
needs of the client and other intended uses in mind.
However, appraisal reports typically contain a logical
presentation of the required elements of information.
Appraisers usually choose to prepare either a narrative
letter-style appraisal report or a
form-style appraisal report.
In
a narrative letter-style report the appraisal has the
look and feel of a formal letter on company letterhead
complete with salutation, body of the letter, signature
and enclosures. In a form-style report the report
is prepared in sections according to a pre-designed
format, with each section appropriately titled and
addressing the relevant elements of information it is
designed to contain.
Regardless of which appraisal report
form is used, in general terms, the appraisal report
must contain three categories of information:
- Appraisal-specific information
- Item-specific information
- Supporting documentation...read entire
article
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| Q & A: Addressees, Clients, Intended
Users |
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Reporting requirements related to
client and intended users
Question:
If the party to whom
an appraisal report is addressed is the client and is
also the only intended user, does USPAP require the
report to state the intended user by name or type?
Response:
While USPAP requires
all reports to state the client and any other intended
user(s), USPAP does not dictate how this should be done.
When there is only a single intended user (the client),
a simple statement as part of the salutation may be
sufficient; however, in other cases, it may not be
adequate. The report must clearly and accurately set
forth the appraisal in a manner that will not be
misleading and must contain sufficient information to
enable intended users to understand the report
properly.
The purpose of reporting requirements related to
client and intended user identification is to: (1)
ensure that the client and any other intended users can
recognize their relationship to the assignment and
report; and (2) ensure that unintended users will not be
misled by notifying them that they are neither the
client nor an intended user. STATEMENT 9,
Identification of Intended Use and Intended
Users, provides extensive information on this topic
in addition to several examples of statements that may
be appropriate for inclusion in a report, such as the
following:
This report is intended for use only by
(identify the client) and (identify any
other intended users by name or type). Use of this
report by others is not intended by the
appraiser.
Excerpted from, USPAP
Q&A, Vol. 10 No. 8, August 2008 ©The Appraisal
Foundation |
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IRS Symposium
Addresses Appraisers |
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IRS provides updates to
appraisal professionals
 ACA partner Bill Novotny recently
attended an IRS symposium entitled Practicing Before
the IRS - A Guide for Personal Property Appraisers.
The event was hosted by the Los Angeles Chapter of the
ASA and was held at the Atrium Hotel in Irvine, CA.
Though familiar with the complexity of IRS
regulations, participants were surprised to learn that
there are actually 243 sections of the IRS Code
requiring the use of fair market value estimates. This
results in there being over 15 million tax returns filed
annually in which the taxpayers have valuation issues.
As might be expected, abuses and disputes regarding
valuations occur.
At the end of the day, it was apparent to all that
by writing appraisals in conformance with USPAP and by
adhering to IRS regulations for appraisal content and
methodology, the professional appraiser can not only
serve his client well but can also help maintain the
public's trust in our profession... read entire
article |
| "Appraising Personal Property: Principles and
Methodology" 2nd Edition Now Available |
This first-ever book for
personal property appraisers covers appraisal principles
and methodology including terminology, approaches to
value, research, ethics, sample appraisals and much,
much more.
 "Appraising Personal
Property: Principles and Methodology - 2nd Edition" is
the only complete, well-organized, practical and
fully-indexed course book and reference guide to
personal property appraising. Written with the Uniform
Standards of Professional Appraisal Practice (USPAP) as
its foundation, this book is unique. There is no other
book or course of instruction that provide such a
thorough grounding in the fundamentals of personal
property appraising. This course book will teach you the
appraisal theory, principles, practices and methodology
associated with preparing professional appraisal
reports... read more order
book | |
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