When using an extraordinary assumption, must an appraiser meet additional reporting requirements according to USPAP?

An extraordinary assumption is a specific type of assumption that the appraiser uses in their analysis to reach a conclusion. Under USPAP (Uniform Standards of Professional Appraisal Practice), when an appraiser relies on an extraordinary assumption, it is essential to provide a detailed explanation in the report. This requirement is in place to ensure transparency and allow users of the appraisal report to understand the basis for the assumption and the implications it may have on the value conclusion.

The need for a detailed explanation arises because extraordinary assumptions typically pertain to significant uncertainties or conditions that are not readily observable. By elaborating on these assumptions, the appraiser helps users assess the reliability of the appraisal results and the potential risks involved. Disclosures should include the rationale for the assumption, the impact it may have on the appraisal, and the potential for variability in the results if the assumption turns out to be incorrect. This thorough reporting aligns with the principles of credibility and transparency that USPAP emphasizes in professional appraisal practices.