Equipment Appraisal Review: USPAP Section 3
Appraisal Reviews of
Equipment Appraisal Reports & Business Asset Appraisal Reports
NorCal Valuation Inc. provides comprehensive equipment appraisal reviews for attorneys, law firms, CPA firms and corporations, according to Standard 3 of the Uniform Standards of Professional Appraisal Practice (USPAP).
We provide a qualitative appraisal review of the submitted equipment appraisal report to determine how it addresses the 3 basic rules of appraisal reports: Qualifications of the Appraiser to do the valuation work, applications of the Standards of Appraisal Practice, and the logical flow of evidence to arrive at an Opinion of Value.
The fact is that many appraisals do not meet the criteria of the 3 basic rules. This has been an issue of great concern in the banking community since the late 1980’s (S&L crisis). The need for appraisal reviews become such a paramount issue on the world economic stage in 2008 (Great Recession) that 2 years later, Dodd-Frank legislation required appraisal reviews for home loans.
The issue of appraisal review, however, isn’t limited to real estate appraisals. Attorneys, whether in litigation, transactional, estate, tax or family law, can benefit from appraisal review when making important decisions based on an appraisal report. In many situations, a review of an equipment appraisal report before the report is taken to court could eliminate a lot of confusion, time and money.
An equipment appraisal report is expected to provide a logical presentation of evidence that supports an unbiased and defensible opinion of value. For the report to fulfill its purpose, that logical presentation must be based on established standards and presented by a credible writer. An equipment appraisal review can determine whether or not the report in hand meets these criteria.
Don’t take for granted that the equipment appraisal in a family law decision, a litigation case, or a business deal on is worth the paper it’s printed on. When you’re counting on an opinion of value, consider an equipment appraisal review by an accredited appraisal review specialist to ascertain whether or not the value is based on logical research and assumptions and has been produced by a qualified equipment appraiser.
It’s important to note that an appraisal review will not include an opinion of value to compare to the equipment appraisal being reviewed or a conclusive judgment on whether the equipment values in the report are “right.” That isn’t what an appraisal review provides.
What an equipment appraisal review will provide is a judgment on whether or not the report under review contains sufficient convincing evidence that the conclusions reached are more likely than not to be reasonable. In other words, the appraisal reviewer will gauge the “comfort level” of the original appraisal report. If it is determined that the report lacks credibility, you may feel more comfortable acquiring another equipment appraisal from a qualified accredited appraiser holding an ASA designation.
Our Appraisal Review Qualifications
Our machinery and equipment appraisal reviews are the work of Jack Young, an Accredited Senior Appraiser (ASA) in Appraisal Review & Management (ARM) Machinery & Technical Specialties, the designation awarded by the American Society of Appraisers to educated, experienced and qualified individuals in the specialized equipment appraisal review industry. In addition, Mr. Young has participated in the Appraisal Review & Management Committee for ASA and has co-written and co-taught several classes for ARM.