ISA CAPP cheat sheet

Three approaches: cost (reproduction/replacement cost less depreciation), sales comparison (most reliable for commonly traded chattels), income (capitalization of net income, used for income-producing property such as rental furniture or licensing rights).

Value definitions are not interchangeable: fair market value assumes a willing buyer and seller, both informed, neither compelled, price unaffected by duress; liquidation value assumes forced sale and shortened exposure; replacement value is the cost to acquire a substitute of like utility, not identity.

Depreciation splits into physical deterioration (curable vs incurable), functional obsolescence (deficiencies or superadequacies relative to current taste and technology), and external obsolescence (market or economic forces outside the item).

Adjusted sales comparison: quantify each comparable's differences from the subject as dollar or percentage adjustments applied to the comparable's price; net adjustments move toward the subject, gross adjustments measure comparability reliability.

Value is a function of the specific market level and date; the same object can carry materially different values at wholesale, retail, auction, and insurance-replacement levels, so the market level must be stated with the value conclusion.

Highest and best use for a chattel is the reasonably probable, legally permissible, physically possible, and financially feasible use that yields the highest value - often relevant for collections that could be broken up or sold intact.

Reproduction cost recreates the item with identical materials and methods; replacement cost substitutes modern materials and techniques of equivalent utility. Reproduction is typically used for insurance scheduling, replacement for general market valuation.

Authenticity, condition, rarity, provenance, and market exposure drive personal property value; a documented attribution change can shift value by orders of magnitude, so attribution confidence must be reported.

USPAP is promulgated by The Appraisal Foundation's Appraisal Standards Board; it is not a law but is adopted by reference in many jurisdictions and required by federal agencies and most lenders.

The Competency Rule requires the appraiser to have the knowledge and experience to complete the assignment competently, or to disclose the deficiency and take steps (research, association with a competent appraiser) to complete it competently.

The Ethics Rule prohibits accepting an assignment contingent on a predetermined value, misrepresenting the appraiser's role, and using or communicating a prior appraiser's confidential information.

The Jurisdictional Exception Rule applies only when a law or regulation of a jurisdiction preempts part of USPAP; the appraiser must cite the specific law and the specific USPAP provision it supersedes.

The Record Keeping Rule requires retention of workfiles for at least five years after delivery of the report, or two years after final disposition of a judicial proceeding in which the appraiser testified, whichever is later.

An appraisal must be communicated as a report; the report type (Appraisal Report vs Restricted Appraisal Report) determines the minimum content, not the level of development or the appraiser's diligence.

The Scope of Work Rule requires the appraiser to identify the problem, determine and perform the scope of work necessary to produce credible results, and disclose the scope in the report.

USPAP defines an appraisal as an opinion of value; appraisal review is the act of developing and communicating an opinion about the quality of another appraiser's work, and it is a separate service with its own reporting standard.

An Appraisal Report must state the identity of the client and intended users, the intended use, the purpose and type of value, the effective date, and the property interest appraised.

The report must summarize the scope of work performed, the data researched, and the reasoning supporting the value conclusion, sufficient for the intended user to understand the analysis.

Sales comparison reporting requires describing the comparables, the adjustments made, and the rationale for each adjustment; unsupported adjustments weaken credibility.

The report must include a signed certification containing the required statements: the appraiser has no present or prospective interest in the property, performed the assignment without bias, and the compensation is not contingent on the value.

Extraordinary assumptions (items taken as true without verification) and hypothetical conditions (events contrary to fact, such as a proposed sale) must be clearly disclosed and their effect on value stated.

A Restricted Appraisal Report is permitted only when the client is the sole intended user; it may state the value conclusion with limited supporting detail, but the workfile must still contain the full analysis.

Photographs, condition reports, provenance documents, and inventory schedules are supporting exhibits; the report must identify which items were personally inspected versus described from secondary sources.

The effective date of value may differ from the date of report; the report must state both, and the value conclusion applies to the effective date, not the inspection or report date.

Declared specialty requires documented education, experience, and market participation in that specialty; the appraiser must be able to demonstrate competency in the specific category before accepting the assignment.

Specialty markets (fine art, antiques, jewelry, coins, wine, memorabilia, machinery) have distinct liquidity, dealer networks, auction house practices, and buyer pools; value conclusions must reflect the applicable market.

Auction results are a primary data source but require adjustment for buyer's premium, seller's commission, condition, and date of sale; hammer price is not the same as fair market value.

Provenance and chain of title affect value and authenticity; gaps, forged documents, or contested attributions must be disclosed and may require specialist consultation.

For jewelry and gemstones, value depends on the four Cs plus certification (e.g., GIA), treatment disclosure, and setting; the same stone can have very different values depending on market level.

For machinery and equipment, order-of-magnitude estimating, market data services, and physical inspection (serial numbers, hours, condition) are core advanced skills; functional and economic obsolescence often dominate.

Consultation with outside experts (conservators, gemologists, curators) is appropriate and must be disclosed; the appraiser remains responsible for the value conclusion and the report.

Market analysis for collectibles requires tracking auction indices, dealer asking prices, and realized prices over time; a single sale is weak evidence, and trend direction affects the value date conclusion.

Declared specialty requires documented education, experience, and market participation in that specialty; the appraiser must be able to demonstrate competency in the specific category before accepting the assignment.

Specialty markets (fine art, antiques, jewelry, coins, wine, memorabilia, machinery) have distinct liquidity, dealer networks, auction house practices, and buyer pools; value conclusions must reflect the applicable market.

Auction results are a primary data source but require adjustment for buyer's premium, seller's commission, condition, and date of sale; hammer price is not the same as fair market value.

Provenance and chain of title affect value and authenticity; gaps, forged documents, or contested attributions must be disclosed and may require specialist consultation.

For jewelry and gemstones, value depends on the four Cs plus certification (e.g., GIA), treatment disclosure, and setting; the same stone can have very different values depending on market level.

For machinery and equipment, order-of-magnitude estimating, market data services, and physical inspection (serial numbers, hours, condition) are core advanced skills; functional and economic obsolescence often dominate.

Consultation with outside experts (conservators, gemologists, curators) is appropriate and must be disclosed; the appraiser remains responsible for the value conclusion and the report.

Market analysis for collectibles requires tracking auction indices, dealer asking prices, and realized prices over time; a single sale is weak evidence, and trend direction affects the value date conclusion.