Common Value Terms
As defined by the International Society of Appraisers:
1. Determining Value
Is the monetary worth which an informed purchaser would offer in exchange for an item of personal property taking into consideration a given market condition (i.e. within a given market at a specific point in time).
2. Estimating Replacement Cost
Primarily an insurance term meaning the cost to replace an item with another having similar qualities within a reasonable amount of time in the relevant marketplace. This is done through production, reproduction, or purchase.
3. Calculating Present Worth
An accounting term which represents the current amount, in terms of dollars, that would be the equivalent of income generated by the sale of property at some point in the future or the stream of income generated by leasing property for a specified amount of time.
The same object may have several different values depending on the intended use of the appraisal assignment. For instance, the value of an antique piece of furniture for insurance scheduling may differ from its resale value, depending on the current market.
Appraisal
An appraisal is defined simply as an opinion of value or cost. It is the act or process of determining value, estimating cost, or calculating the present worth of forecasted earnings. Appraisals are opinions based on an informed judgment which are supported by facts. Appraisal conclusions are arrived at through systematic and thorough analysis and processing of all relevant factors.
Reports
Any communication, written or oral, of an appraisal or appraisal review that is transmitted to the client upon completion of an assignment. ost reports are written and most clients mandate written reports.
1. Appraisal Report
An appraisal report is one provided when intended users include parties other than the client. It must at least summarize the appraiser's analyses and the rationale for the conclusions. The amount and level of detail required depends on the intended use and scope of work (See USPAP Standard 8).
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2. Restricted Appraisal Report
A restricted appraisal report is one provided when intended users include only the client. A restricted appraisal report may not contain sufficient information for the client to understand either the appraise's analyses or rationale for the appraiser's conclusions (See USPAP Standard 8).
Personal Property
Is any tangible or portable object(s), which are considered by the general public as being 'personal,' e.g. furnishings, artwork, antiques, gems & jewelry, collectibles, machinery and equipment; all property that is not classified as real estate.
Tangible Property
Is property that can be touched or observed and is normally utilitarian, decorative, or collectible in nature.
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