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WE NEED MULTI-DISCIPLINE APPRAISAL CAPABILITIES IMPROVED

Southeast Appraisal
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The major appraisal / valuation practice areas are financial (including business valuation and intangible asset appraising), real property, machinery and equipment (called personalty), inventory, cost segregation and fine arts (also called personal property). This paper addresses only the industrial / commercial appraising area, that is, the aforementioned disciplines, but not fine arts. The way the appraisal societies are organized and the appraisal / accounting firms are structured leads to appraisers generally concentrating (or being “pigeonholed”) in their own particular discipline. There is little, if any, cross-discipline awareness training, and if any it usually is too shallow and general. This lack of cross-discipline awareness and training is unfortunate. The shortcoming becomes apparent particularly in a situation when an appraiser of a certain discipline must interact with other appraisal disciplines, for example, a personalty appraiser working on an assignment with a real property appraiser. The language of each discipline although appearing to be the same, is actually different in many areas (like American English compared to British English). Now with SFAS 141, 141R, 157 and 142 for financial reporting (as well as the ongoing area of asset purchase income tax reporting) the need for able multi-disciplined appraisers is increasing in importance. These appraisal applications / problems most often inter-relate the financial, realty, personalty and inventory appraiser, as well as perhaps the cost segregation appraiser. Further, the appraiser’s knowledge of fixed asset accounting system’s development and implementation is critical. In certain major firms, and in smaller firms specializing in purchase price allocation work, this service capability may be found.  In addition, some reviewing accounting firms have adequate experience in place. But this is most often not the case, there are many, many situations where the appraisal user engages appraisers from the necessary multiple disciplines of separate firms and then puts the answers from each discipline together (this is likely the wrong approach). Or the users’ accountants put the answers together (wrong again). Or the reviewer of the appraisals reviews the answers and offers their blessing or denial (say it isn’t so). In these cited cases a disaster is primed to occur. Again, do the appraisers across disciplines understand one another? Are the value concepts even parallel across the disciplines and do they add / relate properly? Does the reviewer even know how to review the work, or are they experienced only in one or another discipline but forced to handle the situation reviewing other disciplines as well as possible? To the user (the acquiring company) it does matter. Incorrect treatment may lead to the overstatement or understatement of earnings and skew return on investment analysis in the future. Further, the risk of future negative reflection due to financial reporting impairment analysis may be increased. SO THE SOLUTION TO THE PROBLEM IS AWARENESS THAT THIS IS A PROBLEM. THEN THE APPRAISAL SOCIETIES (PARTICULARLY THE AMERICAN SOCIETY OF APPRAISERS) SHOULD ESTABLISH A MULTI-DISCIPLINED DISCIPLINE. THE APPRAISAL COMPANIES SHOULD OFFER MULTI-DISCIPLINE TRAINING AND THE REVIEWING ACCOUNTING FIRMS SHOULD DO THE SAME. THE CURE IS AT LEAST 5 YEARS AWAY, IF EVER. BUT LET’S GET GOING. 
© Southeast Appraisal Resource Associates, Inc. 2015
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WE NEED MULTI-DISCIPLINE

APPRAISAL CAPABILITIES IMPROVED

Southeast Appraisal
The major appraisal / valuation practice areas are financial (including business valuation and intangible asset appraising), real property, machinery and equipment (called personalty), inventory, cost segregation and fine arts (also called personal property). This paper addresses only the industrial / commercial appraising area, that is, the aforementioned disciplines, but not fine arts. The way the appraisal societies are organized and the appraisal / accounting firms are structured leads to appraisers generally concentrating (or being “pigeonholed”) in their own particular discipline. There is little, if any, cross-discipline awareness training, and if any it usually is too shallow and general. This lack of cross-discipline awareness and training is unfortunate. The shortcoming becomes apparent particularly in a situation when an appraiser of a certain discipline must interact with other appraisal disciplines, for example, a personalty appraiser working on an assignment with a real property appraiser. The language of each discipline although appearing to be the same, is actually different in many areas (like American English compared to British English). Now with SFAS 141, 141R, 157 and 142 for financial reporting (as well as the ongoing area of asset purchase income tax reporting) the need for able multi-disciplined appraisers is increasing in importance. These appraisal applications / problems most often inter-relate the financial, realty, personalty and inventory appraiser, as well as perhaps the cost segregation appraiser. Further, the appraiser’s knowledge of