The Uniform Standards of Professional Appraisal Practice, known as “USPAP,” is the “generally accepted and recognized standards of appraisal practice in the United States.”[1] This set of standards was created in response to the savings and loan scandal of the 1980’s to ensure that “appraisals are independent, consistent, and objective.”[2]

The Appraisal Foundation, which oversees USPAP, defines itself as “the nation’s foremost authority on the valuation profession.  [The Appraisal Foundation] sets the Congressionally authorized standards and qualifications for real estate appraisers, and provides voluntary guidance on recognized valuation methods and techniques for [business] valuation professionals.”[3]

So, real estate appraisers in the United States are required to follow USPAP; but the requirement for business appraisers is voluntary. This is what leads to valuation magic and the host of business valuation credentialing organizations that each have their own standards. Some have hardly any standards; and one, the American Society of Appraisers (“ASA”), actually requires its members to comply with USPAP. As such, each ASA member must pass a 15 hour USPAP exam before earning the ASA credential and a 7 hour ‘refresher’ USPAP exam every 5 years.

Enforcement of USPAP compliance for business valuations is carried out by the ASA and only for its members that are required to comply. So, any time an ASA member is ‘acting as an appraiser,’ then USPAP applies and will be enforced by the ASA. Appraisers with any other credential do not have a requirement to follow the USPAP standards of independence, consistency, and objectivity.  

[1] Uniform Standards of Professional Appraisal Practice, The Appraisal Foundation, 2016-2017 Edition, page i

[2] Uniform Standards of Professional Appraisal Practice, The Appraisal Foundation, 2016-2017 Edition, opening page

[3]https://www.appraisalfoundation.org/imis/TAF/About_Us/TAF/About_Us.aspx?hkey=52dedd0a-de2f-4e2d-9efb-51ec94884a91

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