In what scenario is an appraiser required to disclose their use of an extraordinary assumption in an appraisal report?

An appraiser is required to disclose their use of an extraordinary assumption in an appraisal report whenever they use such an assumption. This requirement is grounded in the ethical Standards and Guidelines of the Uniform Standards of Professional Appraisal Practice (USPAP).

Extraordinary assumptions are defined as assumptions that, if found to be false, could alter the appraiser’s opinions or conclusions. By disclosing these assumptions, the appraiser provides clarity and transparency about the basis upon which their appraisal is founded. This is vital for effective communication with clients and users of the appraisal report, ensuring that they are aware of the factors that could influence the appraisal's outcome.

Clarifying the circumstances surrounding the extraordinary assumption helps to manage client expectations and avoids potential misinterpretations of the appraisal findings. This requirement underscores the principle of transparency and accountability that is central to professional appraisal practice.

Other options, while they may relate to aspects of reporting, do not capture the specific and continual obligation to disclose extraordinary assumptions inherent in all appraisal reports.