STANDARD 10.

In reporting the results of a business appraisal an appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading.

Comment: Standard 10 is identical in scope and purpose to the appraisal reporting requirements in Standard 2.

Standards Rule 10-1.

Each written or oral business appraisal report must:

1. (a) clearly and accurately set forth the appraisal in a manner that will not be misleading.

   Comment: S.R. 10-1(a) is identical in scope and purpose to S.R. 2-1(a).

2. (b) contain sufficient information to enable the person(s) who receive or rely on the report to understand it properly.

   Comment: S.R. 10-1(b) is identical in scope and purpose to S.R. 2-1(b).

3. (c) clearly and accurately disclose any extraordinary assumption or limiting condition that directly affects the appraisal and indicate its impact on value.

   Comment: This rule requires a clear and accurate disclosure of any extraordinary assumptions or conditions that directly affect an analysis, opinion, or conclusion. Examples of such extraordinary assumptions or conditions might include items such as the execution of a pending lease agreement, atypical financing, infusion of additional working capital or making other capital additions, or compliance with regulatory authority rules.

   Standards Rule 10-2.

   Each written business appraisal report must comply with the following specific reporting guidelines:

4. (a) identify and describe the business enterprise, assets or equity being appraised.
5. (b) state the purpose of the appraisal.
6. (c) define the value to be estimated.

7. (d) set forth the effective date of the appraisal and the date of the report.

   Comment: Every business appraisal report must include information sufficient to identify what is being appraised, for what purposes, what type of value is being sought and the date as of which that value applies. If the appraisal concerns equity, it is not enough to identify the entity in which the equity is being appraised but also the nature of the equity, for example: how many shares of common or preferred stock. The purpose may be to express an opinion of value but the intended use of the appraisal must also be stated.

   Not only the type of value being sought - fair market value, value in use, etc. - must be stated but it must also be defined clearly. The report date is when the report is submitted; the appraisal date or date of value is the effective date of the value conclusion. This date cannot be later than the report date.

8. (e) describe the scope of the appraisal.
9. (f) set forth all assumptions and limiting conditions that affect the analyses, opinions and conclusions.
10. (g) set forth the information considered, the appraisal procedures followed, and the reasoning that supports the analyses, opinions and conclusions.

11. (h) set forth any additional information that may be appropriate to show compliance with, or clearly identify and explain permitted departures from, the requirements of Standard 9.

    Comment: S.R. 10-2(e)(f)(g)(h) are identical in scope and purpose to S.R. 2-2(f)(g)(h)(i).

12. (i) include a certification in accordance with S.R. 10-3;

13. (j) include a letter of transmittal signed by the person assuming technical responsibility for the appraisal.

    Comment: An appraisal report cannot be anonymous. The appraiser or the person assuming technical responsibility for the appraisal must sign the report. The person assuming technical responsibility for the appraisal must be the person under whose direct supervision the appraisal investigation was conducted and who had final responsibility for the conclusions and opinions of value in the appraisal report. Reports issued by a firm may be signed by the person authorized to sign on behalf of the firm, only if the person assuming technical responsibility for the appraisal also signs.

    Standards Rule 10-3.

    Each written business appraisal report must contain a certification that is similar in content to the following:

    I certify that to the best of my knowledge and belief:

    - the statements of fact contained in this report are true and correct.

    - the reported analyses, opinions, and conclusions are limited only by the reported assumption and limiting conditions, and are my personal, unbiased professional analyses, opinions, and conclusions.

    - I have no (or the specified) present or prospective interest in the property that is the subject of this report, and I have no (or the specified) personal interest or bias with respect to the parties involved.

    - my compensation is not contingent on an action or event resulting from the analyses, opinions, or conclusions in, or the use of, this report.

    - my analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

    - no one provided significant professional assistance to the person signing this report. (If there are exceptions, the name of each individual providing significant professional assistance must be stated.)

    Standards Rule 10-4.

    To the extent that it is both possible and appropriate, each oral business appraisal report (including expert testimony) must address the substantive matters set forth in S.R. 10-2.

    Comment: S.R. 10-4 is identical in scope and purpose to S.R. 2-4.

    Standards Rule 10-5.

    An appraiser who signs a business appraisal report prepared by another, even under the label "review appraiser," must accept full responsibility for the contents of this report.

    Comment: S.R. 10-5 is identical in scope and purpose to S.R. 2-5.

    Severability. If any of the above provisions of the Rules of Professional Conduct (Code of Ethics) or any part thereof, or any sentence, paragraph, clause, phrase or word thereof is construed by the courts to be invalid for any reason, it is the intention of the Board that the remainder shall continue in full force and effect; that is, it is the intention of the Board that each of the above provisions and/or any portion thereof, are severable.