Valuation Reports and Professional Standards
A valuation report must let a reader understand what was valued, why, how, and with what limitations. Core elements: identification of the subject interest and valuation date; purpose and intended use; standard and premise of value; scope of work; sources of information and extent of verification; methods applied and the reasoning behind selection and weighting; key assumptions and limiting conditions; the appraiser's signature, qualifications, and date of report; and a statement of independence or any contingent-fee arrangement.
Different standards impose different obligations. USPAP emphasizes problem identification, scope of work, and report content (with appraisal vs. restricted appraisal reporting options). AICPA SSVS governs engagements performed under AICPA professional standards, distinguishing valuation engagements from calculations and requiring appropriate documentation. IVS is principles-based and internationally oriented. A frequent exam trap is assuming a conclusion of value can be issued without a written report-reporting requirements depend on the standard and engagement type, and even oral reporting typically requires a documented file.
Another trap is the hypothetical condition or extraordinary assumption-these must be clearly disclosed and their effect explained; hiding them in limiting conditions is improper. Reports should also disclose subsequent events and whether the value conclusion relies on management projections (and whether those were tested).
Rule of thumb: if a reader cannot reconstruct the appraiser's reasoning-standard of value, methods, weighting, and assumptions-from the report alone, the report is deficient. Reconcile the methods explicitly rather than averaging mechanically.