ISA CAPP flashcards
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32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Fair market value
- The most probable price in a competitive and open market under all conditions requisite to a fair sale, with buyer and seller acting prudently and knowledgeably, price not affected by undue stimulus.
- Liquidation value
- The most probable price an asset would bring in a forced or limited-exposure sale, typically below fair market value because the seller is under duress and marketing time is compressed.
- Replacement cost new
- The cost to acquire a new item of equivalent utility using current materials and methods, rather than identical reproduction; used for insurance and general market valuation.
- Functional obsolescence
- A loss in value from deficiencies or superadequacies in the item relative to current market taste, technology, or utility, such as outdated styling or unnecessary features.
- External obsolescence
- A loss in value caused by forces outside the property itself, such as market shifts, economic conditions, or changes in collector demand, and generally not curable by the owner.
- Highest and best use
- The reasonably probable, legally permissible, physically possible, and financially feasible use that produces the highest value for the property at the effective date.
- Adjusted sales comparison
- A valuation method in which comparable sales are adjusted for differences from the subject, with net adjustments moving the comparable price toward the subject's indicated value.
- Effective date of value
- The date to which the appraiser's opinion of value applies; it may differ from the inspection date and the report date and must be stated in the report.
- Competency Rule
- A USPAP requirement that the appraiser possess the knowledge and experience to complete the assignment competently, or disclose the deficiency and take steps to complete it competently.
- Ethics Rule
- A USPAP rule prohibiting acceptance of assignments contingent on a predetermined value, misrepresentation of the appraiser's role, and misuse of confidential information.
- Jurisdictional Exception Rule
- A USPAP provision allowing departure from a specific USPAP requirement only when a law or regulation of a jurisdiction preempts it, with the law and provision cited.
- Record Keeping Rule
- A USPAP requirement to retain workfiles for at least five years after report delivery, or two years after final disposition of a judicial proceeding, whichever is later.
- Scope of Work Rule
- A USPAP rule requiring the appraiser to identify the problem, determine and perform the scope of work necessary for credible results, and disclose the scope in the report.
- Appraisal review
- The act of developing and communicating an opinion about the quality of another appraiser's work, performed as a separate service under its own USPAP reporting standard.
- Contingent compensation
- A fee arrangement in which compensation depends on the value conclusion, a practice prohibited by the USPAP Ethics Rule because it compromises appraiser independence.
- Workfile
- The documentation retained by the appraiser supporting the report, including data, analyses, and correspondence, subject to the USPAP Record Keeping Rule retention periods.
- Intended user
- The client and any other party the appraiser identifies as users of the report; the intended user determines the appropriate report type and level of detail.
- Extraordinary assumption
- An item taken as true without verification that, if false, would change the value conclusion; it must be disclosed in the report along with its effect.
- Hypothetical condition
- A condition contrary to what is known to exist at the effective date, such as a proposed sale or renovation, disclosed in the report with its effect on value.
- Restricted Appraisal Report
- A report type permitted only when the client is the sole intended user; it may state the value conclusion with limited supporting detail while the workfile retains full analysis.
- Appraisal Report
- The standard USPAP report type that must summarize the scope of work, data, and reasoning sufficient for the intended users to understand the value conclusion.
- Certification
- The signed statement in a report affirming the appraiser has no present or prospective interest, performed the assignment without bias, and received no contingent compensation.
- Report date vs effective date
- The report date is when the appraisal is communicated; the effective date is when the value applies. Both must be stated, and the value conclusion applies to the effective date.
- Sole intended user
- The single client for whom a Restricted Appraisal Report is prepared; use by any other party is not intended and the report must state this limitation.
- Declared specialty
- A category of personal property in which the appraiser documents education, experience, and market participation sufficient to demonstrate competency before accepting assignments.
- Buyer's premium
- The fee added to the hammer price at auction, payable by the buyer; it must be considered when converting auction results to fair market value indications.
- Hammer price
- The final bid accepted by the auctioneer, excluding buyer's premium and taxes; it is not equivalent to fair market value and requires adjustment for market level.
- Provenance
- The documented history of ownership of an item, used to establish authenticity and value; gaps or forged documents must be disclosed and may require specialist review.
- Four Cs
- The grading factors for diamonds and gemstones: cut, color, clarity, and carat weight; combined with certification and treatment disclosure they drive jewelry value.
- Economic obsolescence
- A loss in value from external market or economic forces affecting the item, such as a collapse in collector demand, distinct from physical or functional causes.
- Auction index
- A statistical measure tracking realized prices over time in a specialty market, used to identify trends and support value conclusions at a specific effective date.
- Specialist consultation
- Engaging a conservator, gemologist, curator, or other expert for specialized analysis; the engagement must be disclosed and the appraiser remains responsible for the conclusion.