The Appraisal Foundation’s Appraisal Standards Board (ASB) has released its fourth exposure draft of proposed changes for the 2016-17 edition of the Uniform Standards of Professional Appraisal Practice (USPAP). The proposed changes touch upon the following 11 items:
1) Removal of proposed revisions to the definition of Report and to the Record Keeping Rule – The ASB has dropped the previously proposed changes to both the Record Keeping Rule and the Definition of Report.
2) Proposed revisions to Standard 3 – Standard 3’s proposed changes include the elimination of the effective date of the appraisal review, which was found to be confusing and unnecessary in an appraisal review assignment.
3) Proposed revisions to the definition of Assignment Results and Confidential Information and to the Confidentiality section of the Ethics Rule – Based off comments from previous exposure drafts, changes have been placed within the definition of Assignment Results and Confidentiality Information to ensure that an appraiser is able to share non-confidential information with other appraisers to promote higher-quality appraisals. In addition, the proposed changes to the Confidentiality section of the Ethics Rule would allow an appraiser to share information with their attorney for defense purposes.
4) Proposed changes to Reporting Standards – The ASB has proposed eliminating the remaining Statements in the USPAP. If this is adopted, the mandatory requirements that are contained solely in the Statements will be moved to the appropriate USPAP sections. Likewise, all the guidance contained in the Statements will also be moved into an Advisory Opinion or FAQ.
5) Additional USPAP edits – The ASB has proposed changes in language to the Comment at the end of Standards Rules 1-2(c) and 7-2(c), edited the definition of Appraisal, proposed new definitions for Assignment and Engagement, edited the definitions of Intended Use and Intended User, and removed a previously proposed revision to the Comment of the Management section of the Ethics Rule.
6) Retirement of all Statements on Appraisal Standards – The ASB has proposed retiring the five remaining Statements on Appraisal Standards and eliminating Statements all together.
7) Proposed Advisory Opinion 33: Discounted Cash Flow Analysis – In place of Statement 2 (Discounted Cash Flow Analysis), the ASB is proposing a new Advisory Opinion pertaining to the use of discounted cash flow analysis.
8) Proposed Advisory Opinion 34: Retrospective and Prospective Value Opinions – In place of Statement 3 (Retrospective Value Opinions) and Statement 4 (Prospective Value Opinions), the ASB is proposing a new Advisory Opinion pertaining to the development and reporting of retrospective and prospective value opinions.
9) Proposed Advisory Opinion 35: Reasonable Exposure Time in Real and Personal Property Opinions of Value – In place of Statement 6 (Reasonable Exposure Time in Real and Personal Property Opinions of Value), the ASB is proposing a new Advisory Opinion to address the development and reporting of opinions of reasonable exposure time.
10) Proposed revisions to Advisory Opinion 7: Marketing Time Opinions – Due to the proposed retirement of Statement 6, the ASB has proposed a revised version of Advisory Opinion 7, which updates and clarifies the topic of the development and reporting of opinions of Marketing Time.
11) Proposed Advisory Opinion 36: Identification and Disclosure of Client, Intended Use, and Intended Users – In place of Statement 9 (Identification of Intended Use and Intended Users), the ASB is proposing a new Advisory Opinion to address the identification and disclosure of the client, intended use, and intended user.
To view the ASB’s fourth exposure draft in its entirety, please visit the Appraisal Foundation’s website.