ISA CAPP key terms

The most probable use of an item that is physically possible, legally permissible, financially feasible, and maximally productive, often assessed as-is or after reasonable repair or conversion.

The most probable price an item would bring in a competitive, open market under all conditions requisite to a fair sale, with buyer and seller acting prudently and knowledgeably.

The cost to acquire or produce a new item of equivalent utility and quality at current prices, using today's materials and methods, before any deduction for depreciation.

The cost to create an exact duplicate of an item using the same materials, craftsmanship, and techniques at current prices, before any deduction for depreciation.

A valuation method that estimates value by adding current cost new and subtracting accrued depreciation from all causes, often used when sales data are scarce.

A valuation method that derives value by analyzing prices paid for similar items, then adjusting for differences in condition, quality, provenance, rarity, and date of sale.

A valuation method that converts anticipated future income an item can generate into present value, typically through capitalization or discounted cash flow analysis.

Loss in value from wear, tear, decay, damage, or aging of an item's materials, which may be curable or incurable depending on whether repair cost is recovered in value.

Loss in value not caused by physical wear, arising from changes in technology, fashion, function, or market demand that reduce an item's desirability or usefulness.

The value an item has to a specific owner or in a specific continuing use, which may differ from what the item would bring in an open market.

The most probable price realized when an item is sold under duress within an unreasonably short time, with limited marketing exposure and buyers presumed aware of the constraints.

The most probable price realized in a sale with a reasonable marketing period, but where the seller is under compulsion to sell and normal marketing conditions are constrained.

The specific date to which an opinion of value applies, which may differ from the date the report is prepared or delivered.

The date the appraiser signs and delivers the appraisal report, which can be later than the effective date of value it contains.

The type and extent of research, analysis, and reporting an appraiser performs, determined by the problem to solve and the intended use of the assignment.

The purpose or purposes for which an appraiser's reported opinion is expected to be used, such as estate settlement, insurance scheduling, litigation, or lending decisions.

The client and any other party specifically identified by the appraiser as expected recipients of the report, who rely on it for the stated intended use.

A condition that is contrary to what exists but is assumed for the purpose of analysis or reporting, such as valuing an item as if restored or as if a claimed provenance were verified.

An assumption, as of the effective date, that if found false could alter the appraiser's opinions or conclusions, such as accepting unverified information about an item's history.

A USPAP provision allowing departure from a specific standard when a law or regulation of a jurisdiction requires it, applied only to the extent of that conflict.

The Uniform Standards of Professional Appraisal Practice, a set of ethical and performance standards governing appraisal development, reporting, and conduct in the United States.

A USPAP requirement that an appraiser accept an assignment only when possessing the knowledge and experience to complete it competently, or else disclose the deficiency and take steps to cure it.

A signed statement in an appraisal report affirming that the appraiser's analyses, opinions, and conclusions comply with applicable standards and are not contingent on a predetermined result.

A written agreement defining the assignment's purpose, intended users, effective date, scope, fee, and any limiting conditions before work begins.

A statement in a report describing circumstances that restrict the appraisal's use, such as reliance on client-supplied information or exclusion of certain components from valuation.

The final analytical step in which an appraiser weighs the results of multiple valuation approaches and selects a single, supportable value conclusion.

A tabular comparison showing each comparable sale's price and the dollar or percentage adjustments made for differences from the subject item, leading to an adjusted value indication.

A transaction between unrelated parties, each acting in its own interest, without undue pressure, and with reasonable knowledge of the item and market.

The documented history of an item's ownership, exhibition, and location, which can materially affect authenticity, desirability, and market value.

The identification of an item's maker, artist, culture, or period based on evidence such as signatures, construction, materials, and documented history, stated with appropriate qualification.

A structured written description of an item's physical state, noting damage, repairs, restorations, and wear that affect value and must be disclosed in the appraisal.

The reasonable investigation an appraiser performs to verify facts about an item, including physical inspection, market research, and review of documents, before forming an opinion.

For tax purposes, the price at which property would change hands between a willing buyer and seller, neither compelled to act and both having reasonable knowledge of relevant facts.

An appraisal with an effective date in the past, requiring the appraiser to consider only information that was available or knowable as of that date.

The party who engages the appraiser and to whom the appraiser owes confidentiality and other duties under applicable standards, distinct from other intended users.

A paired concept: an extraordinary assumption treats an uncertain fact as true, while a hypothetical condition assumes something contrary to known reality for analytical purposes.