levitra"> levitra"> Q. I need to get a business appraisal. I understand that there are several types of appraisals that can be conducted and several types of reports that can be utilized. What are these options?
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Jeffrey D. Jones

Ask the Expert: Business Valuator



Jeffrey D. Jones, ASA, CBA, FCBI

Please send your questions to Jeffrey Jones Because of the large volume of mail and the sensitivity or specific nature of some issues, it is impossible to post answers to all of your questions in this column. As time permits, and if you so indicate, I will try to send a few personalized responses. DivorceInteractive.com has a strict Privacy Policy and will not post your name or contact information or share such information with any other person or entity without your permission.



Q: I need to get a business appraisal. I understand that there are several types of appraisals that can be conducted and several types of reports that can be utilized. What are these options?

A:  According to the Appraisal Foundation, an umbrella organization for most of the major appraisal associations, in its Uniform Standards of Professional Appraisal Practice (USPAP), there are two types of appraisals that can be conducted, regardless of the appraisal discipline.

The Complete Appraisal follows all of the required guidelines of USPAP without invoking any departure provisions.

The Limited Appraisal entails a less rigorous analysis and usually invokes one or more departure provisions allowed by USPAP. This type of appraisal can be a multiple page report or as little as a letter. A Complete Appraisal is usually required when the intended user is unfamiliar with the business and needs to be assured that a rigorous analysis of the property being appraised was followed. The Limited Appraisal is typically done when the intended users do not need specified appraisal approaches or methods utilized or a range of values will be sufficient.

There are three types of appraisal reports that can be utilized for either the Complete Appraisal or Limited Appraisal.

a. A Self-contained Appraisal Report - Fully describes the subject property, including its history and background, as well as the appraisal methodology. This type of report is utilized when the intended user is unfamiliar with the business and needs the detail to fully understand the analysis and valuation methodology.

b. A Summary Appraisal Report summarizes the history, background, analysis, methodology, and conclusions of value.

c. Restricted Appraisal Report - Provides an overview of the subject property and methodology. This type of report can only be utilized when the client or intended user is familiar with subject property and does not need complete details restated in the report. However, the appraiser should have the supporting documentation meeting the type of appraisal being conducted, in the appraisal file.





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