What is required of an appraisal report under Standards Rule 2-2(a)(xiii)?

A comprehensive understanding of an appraisal report's requirements under Standards Rule 2-2(a)(xiii) emphasizes the importance of transparency in the appraisal process. This rule specifically mandates that an appraisal report must clearly state all extraordinary assumptions and hypothetical conditions used in the appraisal.

Extraordinary assumptions are conditions that are believed to be true for the purpose of the appraisal but may not be verified. Hypothetical conditions are defined as assumptions that are contrary to known facts but are made for the purpose of the appraisal. By documenting these elements, the appraiser ensures that users of the appraisal report are aware of any potential effects that these assumptions or conditions might have on the value conclusion. This transparency helps in evaluating the credibility and reliability of the appraisal itself.

Including extraordinary assumptions and hypothetical conditions safeguards against misinterpretation and provides clarity regarding the context in which the appraiser made their judgments, thus facilitating informed decision-making by intended users of the report.