Posted 12-13-07. Updated 12-15-07:

Pages 26-27: At the bottom of page 26, in the section entitled "Types of Value," delete text beginning with the first line which starts with "Of paramount importance..." down to and including the sentence on page 27 which reads "In general, the appraiser is guided in his selection of the appropriate value definition by:" Replace the deleted text with the below text.

Of paramount importance to developing a meaningful and accurate appraisal assignment is the appraiser’s selection of the type and definition of value applicable to a given assignment. Eventually, what markets to analyze and what data to use to arrive at an opinion of value will be dependent on the type and definition of value employed. (USPAP states that when developing a personal property appraisal, an appraiser must: "…define and analyze the appropriate market consistent with the type and definition of value…" (USPAP SR 7-3(b)))

USPAP requires that all appraisal reports contain the value type and value definition as well as a source citation for same:

… state the type and definition of value and cite the source of the definition

Comment: Stating the definition of value also requires any comment needed to clearly indicate to the intended users how the definition is being applied. (USPAP SR 8-2(a)(v) and 8-2(b)(v))

• The type of value is the general class of value such as market value, fair market value, forced ldiquidation value, replacement value, etc.

• The identifies specific characteristics and conditions of the type of value. Examples might include a type of value:

o Which must be based on market data obtained from the “most common market”

o For which supporting data must be obtained from a market in which the insured most typically shops and in which he can obtain a replacement property within a reasonable amount of time

o Which must be based on comparable sales in which neither buyer nor seller is under compulsion to act

o In which reasonable exposure time and reasonable marketing time is assumed and defined

Value definitions could be provided by any number of sources such as U.S. tax regulations, textbooks, legal jurisdiction, regulatory agency, recognized appraisal association, or even an assignment engagement letter from the client.

In general, the appraiser is guided in his selection of the appropriate value type and definition by: