Each written or oral appraisal report for an interest in a business enterprise or intangible asset must:

(a)

clearly and accurately set forth the appraisal in a manner that will not be misleading;

(b)

contain sufficient information to enable the intended user(s) to understand the report; and

(c)

clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.

Each written appraisal report for an interest in a business enterprise or intangible asset must be prepared in accordance with one of the following options and prominently state which option is used: Appraisal Report or Restricted Use Appraisal Report.

Comment: When the intended users include parties other than the client, an Appraisal Report must be provided. When the intended users do not include parties other than the client, a Restricted Use Appraisal Report may be provided.

The essential difference between these options is in the content and level of information provided. The appropriate reporting option and the level of information necessary in the report are dependent on the intended use and intended users.

An appraiser must use care when characterizing the type of report and level of information communicated upon completion of an assignment.  An appraiser may use any other label in addition to, but not in place of, the label set forth in this Standard for the type of report provided.

The report content and level of information requirements set forth in this Standard are minimums for both types of report.

A party receiving a copy of an Appraisal Report or Restricted Use Appraisal Report does not become an intended user of the appraisal unless the appraiser identifies such party as an intended user as part of the assignment.

(a)

The content of an Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:

(i)

state the identity of the client and any other intended users, by name or type; 92

Comment: An appraiser must use care when identifying the client to ensure a clear understanding and to avoid violations of the Confidentiality section of the ETHICS RULE. In those rare instances when the client wishes to remain anonymous, an appraiser must still document the identity of the client in the workfile but may omit the clients identity in the report.

(ii)

state the intended use of the appraisal; 93

(iii)

summarize information sufficient to identify the business or intangible asset and the interest appraised;

Comment: The identification information must include property characteristics relevant to the type and definition of value and intended use of the appraisal.

(iv)

state the extent to which the interest appraised contains elements of ownership control, including the basis for that determination;

(v)

state the extent to which the interest appraised lacks elements of marketability and/or liquidity, including the basis for that determination;

(vi)

state the standard (type) and definition of value and the premise of value and cite the source of the definition;

Comment: Stating the definition of value also requires any comments needed to clearly indicate to the intended users how the definition is being applied.

(vii)

state the effective date of the appraisal and the date of the report;

Comment: The effective date of the appraisal establishes the context for the value opinion, while the date of the report indicates whether the perspective of the appraiser on the market or property as of the effective date of the appraisal was prospective, current, or retrospective.

(viii)

summarize the scope of work used to develop the appraisal;94

Comment: Because intended users reliance on an appraisal may be affected by the scope of work, the report must enable them to be properly informed and not misled. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed.

When any portion of the work involves significant business and/or intangible asset appraisal assistance, the appraiser must summarize the extent of that assistance. The signing appraiser must also state the name(s) of those providing the significant business and/or intangible asset appraisal assistance in the certification, in accordance with SR 10-3.

(ix)

summarize the information analyzed, the appraisal procedures followed, and the reasoning that supports the analyses, opinions, and conclusions; exclusion of the market approach, asset-based (cost) approach, or income approach must be explained;

Comment: An Appraisal Report must include sufficient information to indicate that the appraiser complied with the requirements of STANDARD 9. The amount of detail required will vary with the significance of the information to the appraisal.  

The appraiser must provide sufficient information to enable the client and intended users to understand the rationale for the opinions and conclusions, including reconciliation in accordance with Standards Rule 9-5.

(x)

clearly and conspicuously:

• state all extraordinary assumptions and hypothetical conditions; and

• state that their use might have affected the assignment results; and

(xi)

include a signed certification in accordance with Standards Rule 10-3.

(b)

The content of a Restricted Use Appraisal Report must be consistent with the intended use of the appraisal and, at a minimum:

(i)

state the identity of the client, by name or type;95 and state a prominent use restriction that limits use of the report to the client and warns that the appraisers opinions and conclusions set forth in the report may not be understood properly without additional information in the appraisers workfile;

Comment: An appraiser must use care when identifying the client to ensure a clear understanding and to avoid violations of the Confidentiality section of the ETHICS RULE.  In those rare instances when the client wishes to remain anonymous, an appraiser must still document the identity of the client in the workfile but may omit the clients identity in the report.

The Restricted Use Appraisal Report is for client use only.  Before entering into an agreement, the appraiser should establish with the client the situations where this type of report is to be used and should ensure that the client understands the restricted utility of the Restricted Use Appraisal Report.

(ii)

state the intended use of the appraisal; 96

Comment: The intended use of the appraisal must be consistent with the limitation on use of the Restricted Use Appraisal Report option in this Standards Rule (i.e. client use only).

(iii)

state information sufficient to identify the business or intangible asset and the interest appraised;

Comment: The identification information must include property characteristics relevant to the type and definition of value and intended use of the appraisal.

(iv)

state the extent to which the interest appraised contains elements of ownership control, including the basis for that determination;

(v)

state the extent to which the interest appraised lacks elements of marketability and/or liquidity, including the basis for that determination;

(vi)

state the standard (type) of value and the premise of value, and cite the source of its definition;

(vii)

state the effective date of the appraisal and the date of the report;

Comment: The effective date of the appraisal establishes the context for the value opinion, while the date of the report indicates whether the perspective of the appraiser on the market or property as of the effective date of the appraisal was prospective, current, or retrospective.

(viii)

state the scope of work used to develop the appraisal;97

Comment: Because the clients reliance on an appraisal may be affected by the scope of work, the report must enable them to be properly informed and not misled. Sufficient information includes disclosure of research and analyses performed and might also include disclosure of research and analyses not performed.

When any portion of the work involves significant business and/or intangible asset appraisal assistance, the appraiser must state the extent of that assistance. The signing appraiser must also state the name(s) of those providing the significant business and/or intangible asset appraisal assistance in the certification, in accordance with SR 10-3.

(ix)

state the appraisal procedures followed, state the value opinion(s) and conclusion(s) reached, and reference the workfile; exclusion of the market approach, asset-based (cost) approach, or income approach must be explained;

Comment: An appraiser must maintain a specific, coherent workfile in support of a Restricted Use Appraisal Report. The contents of the workfile must include sufficient information to indicate that the appraiser complied with the requirements of STANDARD 9 and for the appraiser to produce an Appraisal Report. The file must be available for inspection by the client (or the clients representatives, such as those engaged to complete an appraisal review), such third parties as may be authorized by due process of law, and a duly authorized professional peer review committee except when such disclosure to a committee would violate applicable law or regulation.

(x)

clearly and conspicuously:

• state all extraordinary assumptions and hypothetical conditions; and

• state that their use might have affected the assignment results; and

(xi)

include a signed certification in accordance with Standards Rule 10-3.

Each written appraisal report for an interest in a business enterprise or intangible asset must contain a signed certification that is similar in content to the following form:

I certify that, to the best of my knowledge and belief:
 

—

the statements of fact contained in this report are true and correct.
 

—

the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.
 

—

I have no (or the specified) present or prospective interest in the property that is the subject of this report, and I have no (or the specified) personal interest with respect to the parties involved.
 

—

I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.
 

—

my engagement in this assignment was not contingent upon developing or reporting predetermined results.
 

—

my compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.
 

—

my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.
 

—

no one provided significant business and/or intangible asset appraisal assistance to the person signing this certification. (If there are exceptions, the name of each individual providing significant business and/or intangible asset appraisal assistance must be stated.)

Comment: A signed certification is an integral part of the appraisal report. An appraiser who signs any part of the appraisal report, including a letter of transmittal, must also sign this certification.

In an assignment that includes only assignment results developed by the business and/or intangible asset appraiser(s), any appraiser(s) who signs a certification accepts full responsibility for all elements of the certification, for the assignment results, and for the contents of the appraisal report.  In an assignment that includes real property or personal property assignment results not developed by the business and/or intangible asset appraiser(s), any business and/or intangible asset appraiser(s) who signs a certification accepts full responsibility for the business and/or intangible asset elements of the certification, for the business and/or intangible asset assignment results, and for the business and/or intangible asset contents of the appraisal report.

When a signing appraiser(s) has relied on work done by others who do not sign the certification, the signing appraiser is responsible for the decision to rely on their work. The signing appraiser(s) is required to have a reasonable basis for believing that those individuals performing the work are competent. 98

The names of individuals providing significant business and/or intangible asset appraisal assistance who do not sign a certification must be stated in the certification. It is not required that the description of their assistance be contained in the certification but disclosure of their assistance is required in accordance with SR 10-2(a) or (b)(vii), as applicable.

92.

See Statement on Appraisal Standards No. 9, Identification of Intended Use and Intended Users.

93.

See Statement on Appraisal Standards No. 9, Identification of Intended Use and Intended Users.

94.

See Advisory Opinion 28, Scope of Work Decision, Performance, and Disclosure, and Advisory Opinion 29, An Acceptable Scope of Work. References to Advisory Opinions are for guidance only and do not incorporate Advisory Opinions into USPAP.

95.

See Statement on Appraisal Standards No. 9, Identification of Intended Use and Intended Users.

96.

See Statement on Appraisal Standards No. 9, Identification of Intended Use and Intended Users.

97.

See Advisory Opinion 28, Scope of Work Decision, Performance, and Disclosure and Advisory Opinion 29, An Acceptable Scope of Work. References to Advisory Opinions are for guidance only and do not incorporate Advisory Opinions into USPAP.

98.

See Advisory Opinion 5, Assistance in the Preparation of an Appraisal.  References to Advisory Opinions are for guidance only and do not incorporate Advisory Opinions into USPAP.