ADVISORY OPINIONS
This communication by the Appraisal Standards Board (ASB) does not establish new standards or interpret existing standards. Advisory Opinions are issued to illustrate the applicability of appraisal standards in specific situations and to offer advice from the ASB for the resolution of appraisal issues and problems.
SUBJECT: Update of a Prior Appraisal
APPLICATION: Real Property, Personal Property, Intangible Property
THE ISSUE
Once an appraisal of a property, or an appraisal consulting assignment, has been completed, there are many cases in which a client may need a subsequent appraisal or analysis involving the same property. Examples include:
In the appraisal of real property, a current value is commonly required by lenders and secondary market participants when the time frame between the effective date of a prior appraisal and the closing of a loan exceeds certain limits. A current value is also required by agencies in eminent domain cases when time has elapsed between a prior appraisal and the date of taking.
In the appraisal of business equity of privately held companies held by Employee Stock Ownership Trusts, current values are required at least annually.
In the appraisal of personal property, it may be necessary to appraise equipment every two years for financing purposes.
Similarly, a client may request an update of a prior appraisal consulting assignment, or a review assignment that included the reviewer’s opinion of value.
Clients sometimes label such requests as “updates,” “reappraisals,” or “recertifications.” Does USPAP address these and how can an appraiser comply with USPAP for such assignments?
ADVICE FROM THE ASB ON THE ISSUE:
A New Assignment of a Prior Assignment
USPAP 2008–2009 Edition
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