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APPRAISAL
STANDARDS
STANDARDS
What are STANDARDS?
Recognized principles & concepts in valuation
Best practices in valuation services &
reporting
Accepted definitions
STANDARDS
Two Appraisal Standards Common in the Philippines
1. Philippine Valuation Standards: Adoption of
the IVSC Valuation Standards Under Philippine
Setting (PVS)
IPREA
All Government Assessors/appraisers
Private Appraisers
PARA
Private Appraisers
STANDARDS
PHILIPINE VALUATION STANDARDS
OFFICIAL NAME:
Philippine Valuation Standards : Adoption Of The IVSC
Valuation Standards Under Philippine Setting 1st Edition, 2009
Adopted by the Department of Finance Under DAO 37-09
Component
Parts
COMPONENT
of the
PVS
PARTS
OF
THE PVS
1)
2)
3)
4)
COMPONENT
PARTS OF THE PVS
5) Applications
Valuation for Financial Reporting
Valuation for Secured Lending Purposes
Valuation for Public Sector Assets for
Financial Reporting
COMPONENT
PARTS OF THE PVS
6) Guidance Notes
Real Property Valuation
Valuation for Lease Interests
Valuation for Plant,
Machinery, and Equipment
Valuation for Intangible
Assets
Valuation for Personal
Property
Business Valuation
Consideration of Hazardous
COMPONENT
PARTS OF THE PVS
Discounted Cash Flow (DCF) Analysis for
Market Valuations and Investment Analyses
Valuation of Agricultural Properties
Reviewing Valuations
Valuation of Trade Related Property
Mass Appraisal for Property Taxation
Valuation of Extractive Industries
The Valuation of Historic Property
7) GLOSSARY
COMPONENT
PARTS OF THE PVS
In the PVS (IVS) , the three principal elements
have equal weight: Standards,
Applications, and Guidance Notes.
The IVS is popular in Europe, and the British
Commonwealth.
It was officially adopted for use in the
Philippines since 2009
USPAP
1. Component
1)USPAP PRACTICE
Preamble
Definitions
Ethics Rule
Record Keeping Rule
Competency Rule
Scope of Work Rule
Jurisdictional Exception Rule
UNIFORM
STANDARD
PROFESSIONAL
APPRAISAL
PRACTICE (USPAP)
UNIFORM STANDARD
PROFESSIONAL APPRAISAL
PRACTICE (USPAP)
3) STATEMENTS ON APPRAISAL STANDARDS are authorized by
the by-laws of The Appraisal Foundation and are specifically for
the purposes of clarification, interpretation, explanation,
or elaboration of the Uniform Standards of Professional Appraisal
Practice (USPAP). Statements have the full weight of a
Standards Rule and can be adopted by the Appraisal Standards
Board only after exposure and comment
FREQUENTLY ASKED
QUESTIONS (FAQ)
USPAP Frequently Asked Questions
(USPAP FAQ) is a form of guidance issued
by the ASB to respond to questions raised by
appraisers, enforcement officials, users of
appraisal services and the public to
illustrate the applicability of USPAP in
specific situations and to offer advice
from the ASB for the resolution of appraisal
issues and problems.
USPAP FAQ is not part of USPAP and is
approved by the ASB without public
exposure and comment.
APPRAISAL ETHICS
APPRAISAL ETHICS
Ethics, also known as moral philosophy, is a
branch of philosophy that involves systematizing,
defending, and recommending concepts of right and
wrong conduct.
Code of Conduct (of Appraisers) :
1.
2.
3.
APPRAISAL ETHICS
THERE ARE THREE COMMON CODE OF
ETHICS FOR REAL ESTATE APPRAISERS IN
THE PHILIPPINES:
1. Code
of Ethics and Responsibilities for Real
Estate Service Practitioners
in The Philippines
2. Philippine Valuation Standards (
Philippine Valuation Standards
3. Uniform Standard Professional Appraisal
Practice
B. PHILIPPINE VALUATION
STANDARDS (PVS): ETHICS AND
COMPETENCE
In the Philippine Valuation Standards (1st Edition) this
is included in the Chapter called Code of Conduct
(COC), which must be followed by Valuers either by:
a) Choice
b) Requirements by law or regulation
c) Instruction of clients, intended users, and or national
societies or organizations.
B. PHILIPPINE VALUATION
STANDARDS (PVS): ETHICS AND
COMPETENCE
ETHICS:
Valuers should at all times maintain a
high standard of honesty and
integrity and conduct their activities
in a manner not detrimental to their
clients, the public, their profession,
or their respective national
professional valuation body.
4.
5.
6.
7.
CONFIDENTIALITY
A Valuer must at all times deal with clients affairs with
proper discretion and confidentiality
A Valuer must not disclose sensitive factual data
obtained from the client, or the result of an assignment
prepared for a client, to anyone other than those
specifically authorized by the client
COMPETENCE
Outside Assistance
When engaging the services of outside assistance
necessary to compliment the Valuers own skills, a Valuer
should first establish that those assisting have the requisite
skills and ethical principles.
The clients consent should be obtained when outside
assistance is required, and the identity of the assistants
and the extent of their role should be disclosed in the
Valuers report.
EFFICIENCY
AND DILIGENCE
B. PHILIPPINE
VALUATION
STANDARDS (PVS): ETHICS AND
1. Act promptlyCOMPETENCE
and efficiently in carrying out the clients
instructions
2. Instructions should be declined where circumstances
preclude sufficient diligent enquiry, quality of work, and
completion within reasonable time.
3. Before the valuation is reported, written instructions
should be received from the client and/or confirmed in
writing by a valuer
4. Diligent enquiries and investigations to ensure that the
data for analysis in the valuation are correct and can be
relied upon.
5. Prepare a work file for each assignment
6. work file for each assignment shall be retained for a
period of five years after completion of the assignment.
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL PRACTICE
ETHICS RULE :
An appraiser must promote
and preserve the public
trust inherent in appraisal
practice by observing the
highest standards of
professional ethics.
C. UNIFORM STANDARD
PROFESSIONAL APPRAISAL
PRACTICE
CONDUCT - An appraiser must perform assignments with
impartiality, objectivity, and independence, and without
accommodation of personal interests.
1. Must not perform an assignment with bias;
2. Must not advocate the cause or interest of any party or issue;
3. Must not accept an assignment that includes the reporting of
predetermined opinions and conclusions;
4. Must not misrepresent his or her role when providing valuation
services that are outside of appraisal practice;
5. Must not communicate assignment results with the intent to
mislead or to defraud;
6. Must not use or communicate a report that is known by the
appraiser to be misleading or fraudulent;
C. UNIFORM STANDARD
PROFESSIONAL APPRAISAL
PRACTICE
7. Must not knowingly permit an employee or other
person to communicate a misleading or
fraudulent report;
8. Must not use or rely on unsupported conclusions
relating to characteristics such as race, color,
religion, national origin, gender, marital status,
familial status, age, receipt of public assistance
income, handicap, or an unsupported conclusion
that homogeneity of such characteristics is
necessary to maximize value;
9. Must not engage in criminal conduct;
10.Must not willfully or knowingly violate the
requirements of the RECORD KEEPING RULE
C. UNIFORM STANDARD
PROFESSIONAL APPRAISAL
PRACTICE
10.Must not perform an assignment in a grossly
negligent manner.
11.If known prior to accepting an assignment, and/or if
discovered at any time during the assignment, an
appraiser must disclose to the client, and in the
subsequent report certification:
a) any current or prospective interest in the subject
property or parties involved; and
MANAGEMENT
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL
PRACTICE
1.
2.
C. UNIFORM STANDARD
PROFESSIONAL APPRAISAL
PRACTICE
c. the amount of a value opinion;
d. the attainment of a stipulated result (e.g., that the loan
closes, or taxes are reduced); or
e. the occurrence of a subsequent event directly related
to the appraisers opinions and specific to the
assignments purpose.
3.
4.
5.
6.
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL PRACTICE
CONFIDENTIALITY
1. An appraiser must protect the confidential nature of the appraiser-client relationship.
2. An appraiser must act in good faith with regard to the legitimate interests of the client
in the use of confidential information and in the communication of assignment results.
3. An appraiser must be aware of, and comply 273 with, all confidentiality and privacy
laws and regulations applicable in an assignment.
4. An appraiser must not disclose: (1) confidential information; or
the client
persons specifically authorized by the client
state appraiser regulatory agencies
third parties as may be authorized by due process of law
a duly authorized professional peer review committee except
when such disclosure to a committee would violate applicable
law or regulation.
5. A member of a duly authorized professional peer review committee must not disclose
confidential information presented to the committee.
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL PRACTICE
RECORDKEEPING RULE
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL PRACTICE
3. An appraiser must retain the workfile for a period of at least five years
after preparation or at least two years after final disposition of any
judicial proceeding in which the appraiser provided testimony related to
the assignment, whichever period expires last.
4. An appraiser must have custody of the workfile, or make appropriate
workfile retention, access, and retrieval arrangements with the party
having custody of the workfile. This includes ensuring that a workfile is
stored in a medium that is retrievable by the appraiser throughout the
prescribed record retention period.
5. An appraiser having custody of a workfile must allow other appraisers
with workfile obligations related to an assignment appropriate access
and retrieval for the purpose of:
a. Submission to state appraiser regulatory agencies;
b. Compliance with due process of law;
c. Submission to a duly authorized professional peer review committee; or
compliance with retrieval arrangements
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL PRACTICE
COMPETENCY RULE
An appraiser must:
(1) be competent to perform the assignment;
(2) acquire the necessary competency to perform
the assignment; or
(3) decline or withdraw from the assignment.
C. UNIFORM STANDARD
PROFESSIONAL
BEING COMPETENT
APPRAISAL PRACTICE
The appraiser must determine, prior to accepting an
assignment, that he or she can perform the
assignment competently. Competency requires:
1.The ability to properly identify the problem to be
addressed; and
2.The knowledge and experience to complete the
assignment competently; and
3.Recognition of, and compliance with, laws and
regulations that apply to the appraiser or to the
assignment.
C. UNIFORM STANDARD
PROFESSIONAL
ACQUIRING COMPETENCY
APPRAISAL PRACTICE
If an appraiser determines he or she is not competent prior to accepting an
assignment, the appraiser must:
1. Disclose the lack of knowledge and/or experience to the client before accepting the
assignment;
2. Take all steps necessary or appropriate to complete the assignment competently; and
3. Describe, in the report, the lack of knowledge and/or experience and the steps taken to
complete the assignment competently.
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL PRACTICE
LACK OF COMPETENCY
C. UNIFORM STANDARD
PROFESSIONAL
APPRAISAL PRACTICE
SCOPE OF WORK RULE
1.
2.
3.
C. UNIFORM STANDARD
PROFESSIONAL
JURISDICTIONAL EXCEPTION RULE
APPRAISAL PRACTICE
1.
2.
3.
4.
ACTUAL SCENARIO
USPAP ADVISORY OPINIONS (P108)
Unacceptable Assignment Conditions in Real Property Appraisal
Assignments (P 160)
An Acceptable Scope of Work (P 207)
Assignments Involving More than One Appraiser (P 215)
Standards Rule 2-3 (P 43)
FREQUENTLY ASKED QUESTIONS (P 226)
Ethics Rule Conduct (P 237)
Management (P 248)
Confidentiality (P 256)
Record Keeping (P 267)
Appraisal Review (P 372)
Other Services (P 383)
THANK YOU