Like a gourmet chef that must know the type and quantity of ingredients and appropriate cooking instructions, an appraiser needs to know what assets are going to be valued, and the purpose of the appraisal to quote and execute the assignment correctly and efficiently.

Appraisers want to develop long-term client relationships and are diligent in trying to understand the scope and purpose of every appraisal assignment. An appraiser’s ultimate objective is to provide a work product that answers specific questions that are applicable to the purpose (reason) of the appraisal. Included below are two reasons why a comprehensive understanding of the scope is important to both the client and the appraiser:

1. Purpose of the Appraisal - Knowing the purpose of an appraisal assignment in advance is critical to meeting the client’s expectations and application of the results. An appraiser may be engaged to provide a report for financing, financial reporting, tax management, litigation, risk management, asset management or business planning purposes. Appraisal techniques, documentation and reporting can vary widely, and will depend on what the client plans to do with the report. If the purpose of the appraisal is fully understood before beginning the assignment, then the client is more likely to receive a final product appropriately suited to meet their needs.
    
2. Determine What Assets are Being Valued - It is important to have a clear and detailed understanding of what assets are going to be valued. The subject of the appraisal may include machinery and equipment, inventory, intangibles, or real estate; the geographical, physical location of the assets is also important. Correctly identifying the assets for inclusion in the appraisal assignment helps to ensure project staffing is appropriate with the correct number of professionals with the appropriate expertise. This ensures that the final work product is of the highest quality and accuracy; it will also help the valuation team to complete the engagement with the greatest efficiency.

Time is money! Intelligent business people want excellent service and a quality work product that facilitates the purpose of the service while managing costs. Appraisers recognize this, and in so doing endeavor to work with their clients to accurately scope all assignments in order to provide both service and quality efficiently. Having an accurate understanding of the scope and purpose of the valuation project at the time of engagement results in clients maximizing all aspects of the service provided. As the old adage says, “Failing to plan, is planning to fail”!

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About AccuVal
AccuVal provides a broad range of valuation, advisory and asset management solutions that contribute to growth or help ensure survival. We appraise the business enterprise and shareholder equity; bonds; intangibles and intellectual property; machinery and equipment; inventory; real estate and accounts receivables in over 100 industries worldwide. Learn more at www.accuval.net.