Definition
Appraisal Standards are the professional guidelines, ethical requirements, and methodological frameworks that govern how appraisers conduct valuations and prepare reports. Major standards include the Uniform Standards of Professional Appraisal Practice (USPAP) and standards from organizations like the Appraisers Association of America and American Society of Appraisers.
Significance in Alternative Asset Valuation
Adherence to appraisal standards affects credibility and legal defensibility:
Key standard components:
- Ethics requirements: Independence, objectivity, confidentiality
- Competency standards: Appraisers must have relevant expertise
- Scope of work rules: Defining the assignment parameters
- Reporting requirements: Minimum content and format standards
- Record keeping: Documentation retention requirements
Why standards matter:
- IRS requires USPAP compliance for qualified appraisals
- Courts give more weight to appraisals following recognized standards
- Insurance claims require professionally prepared valuations
- Fiduciary duties demand proper valuation practices
Appraisals that deviate from professional standards may be challenged, rejected, or given reduced credibility in disputes.
How Impossival Approaches This
Our valuation methodology aligns with professional appraisal standards, ensuring our analysis meets the expectations of IRS, courts, and insurers. We document our approach transparently and maintain appropriate records.
Related Concepts
• Qualified Appraisal - IRS-defined appraisal requirements • Qualified Appraiser - Professional credentials for appraisers • Appraisal Report - Formal valuation documentation • Fair Market Value - Standard of value appraisals establish