ASB Releases Exposure Drafts for AO-13 & AO-21
The Appraisal Standards Board (ASB) has issued the following exposure drafts:
Exposure Draft of Proposed Changes to ADVISORY OPINION 13 (AO-13), Performing Evaluations of Real Property Collateral to Conform with USPAP
Rationale: The prior version of Advisory Opinion 13 included not only advice related to USPAP, but also some interpretations of the Interagency Appraisal and Evaluation Guidelines. The Interagency Work Group has suggested, and the ASB agrees, that AO-13 should focus on the application of USPAP and avoid interpretation of the guidelines.
When an individual is acting as an appraiser, USPAP applies. The proposed replacement Advisory Opinion 13 illustrates that under USPAP an opinion of value is an appraisal, regardless of what the opinion is called (appraisal, evaluation, or any other label). So, when an individual, acting as an appraiser develops and reports an opinion of value, he or she must comply with all applicable USPAP requirements.
Issued on January 23, 2013
Written comments requested by March 22, 2013
Exposure Draft of Proposed Changes to Advisory Opinion 21 (AO-21), USPAP Compliance
Rationale: At its February 1, 2013 public meeting, the ASB voted to retire STANDARDS 4 and 5, which address Real Property Appraisal Consulting Development and Reporting. The purpose of an assignment under STANDARDS 4 and 5 is to develop, without advocacy, an analysis, recommendation, or opinion where at least one opinion of value is a component of the analysis leading to the assignment results.
The impact of retiring STANDARDS 4 and 5 is that any additional opinions or recommendations included within appraisal or appraisal review assignments will still be subject to the ETHICS RULE, the COMPETENCY RULE, and the JURISDICTIONAL EXCEPTION RULE. Effectively, most assignments that are currently appraisal consulting will become either appraisal or appraisal review assignments with additional components. Those additional components remain a part of appraisal practice. This is consistent with the way in which appraisal consulting in personal property and business appraisal assignments are currently treated under USPAP.
To assist in demonstrating the impact of the retirement of STANDARDS 4 and 5, the proposed edits to Advisory Opinion 21, USPAP Compliance, are shown in this exposure draft. These edits include the elimination of references to appraisal consulting and the addition of Illustrations 5a, 5b, 5c, and 5d. Proposed edits to AO-21 were included in previous exposure drafts, most recently in the Third Exposure Draft of Proposed Changes for the 2014-15 Edition of the Uniform Standards of Professional Appraisal Practice. After considering the responses received regarding the proposed edits to AO-21, the ASB has made revisions to the proposed language.
Issued on February 22, 2013
Written comments requested by March 25, 2013
Send comments to: ASBComments AT appraisalfoundation DOT org