What Should an Appraisal Contain?

The Elements of a Correctly Prepared Appraisal is a professional standard published by the Appraiser’s Association of America (AAA). It outlines the elements that should be included in an appraisal report. In addition to basic information, like the name and address of the client, the appraisal should include the following.

Information about the appraisal itself
  • Number of pages in the appraisal
  • Purpose of the appraisal and intended use
  • Type of valuation used (replacement value, fair market value, marketable cash value, liquidation value) and a definition.
  • Valuation approach used: cost estimate approach, income approach, market data comparison approach, etc.
  • Market in which valuation is applied (statement of most common marketplace)
  • Date of preparation of appraisal and the date of which objects were viewed and effective date of appraisal.
  • Market analysis: generic market history & possible projections for future activity.
  • Firm statement of value - not estimates, except when followed by detailed explanations of qualifications.
Information about the item(s)
  • A thorough description of appraised objects. Including measurements and weights when applicable
  • The condition of the appraised objects
  • The provenance (history of ownership) for the item(s), if available
  • How objects were acquired (especially for IRS purposes)
  • Comparables and related analysis, if necessary
  • Brief biography of the artists
  • Exhibition and publication history
  • Statement that the appraised object(s) correspond to description(s) listed in the appraisal.
Information about the Appraiser(s)
  • Statement that the appraiser’s fee is not contingent on appraised value of objects.
  • Statement that the appraiser has not been "disqualified" by the IRS (for IRS appraisals)
  • Curriculum Vitae of the appraiser(s).
  • Statement of “disinterest” on the part of the appraiser
  • Clear division of appraisal when more than one appraiser is involved. Who did what? Inclusion of CV of other appraiser
  • Signature(s) of Appraiser(s) & Tax ID number(s) when appraisal is prepared for IRS purposes
  • Statement of assumptions & limiting conditions

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