Valuation Advisories

Valuation Advisories are documents that offer voluntary guidance on recognized valuation methods and techniques. The Appraisal Practices Board (APB), an independent Board of The Appraisal Foundation that existed between 2010-2017, was instrumental in issuing a number of Valuation Advisories during those years.

The Business Valuation Resource Panel now releases Valuation Advisories focused on business valuation related methods and techniques. You can also read their Valuation Briefs, shorter papers focused on current topics, here .

Business Valuation Advisories

VFR Valuation Advisory #1: Identification of Contributory Assets and Calculation of Economic Rents
With changing financial reporting requirements, there is increased interest in the effect of valuation conclusions on financial statements. This document sets forth best practices for the identification of contributory assets and calculation of economic rents. A Toolkit, available for download here, has been provided as a companion piece to this Advisory to provide additional sample spreadsheets that illustrate application of typical calculations in which contributory asset charges are used.
VFR Valuation Advisory #2: The Valuation of Customer-Related Assets
This document is intended to provide helpful guidance for those who are preparing fair value measurements of customer-related assets. To accomplish this objective, this Advisory outlines best practices in the valuation of customer-related assets for financial reporting purposes, including but not limited to the following situations: business combinations, asset acquisitions, goodwill impairment testing, long-lived asset impairment testing, and reorganizations (i.e., fresh-start accounting).
VFR Valuation Advisory #3: The Measurement and Application of Market Participant Acquisition Premiums
This document presents helpful guidance on how to approach and apply certain aspects of the valuation process appropriate for measuring the fair value of controlling interests.
VFR Valuation Advisory #4: Valuation of Contingent Consideration
This document provides guidance on best practices in the valuation of contingent consideration for financial reporting purposes.

Real Property Valuation Advisories

Valuation Advisory #2: Adjusting Comparable Sales for Seller Concessions
This Advisory provides guidance for appraisers on how to identify, verify, analyze, and adjust sale comparables for both seller and financing concessions.
Valuation Advisory #3: Residential Appraising in a Declining Market
This Advisory provides guidance on generally accepted methods and techniques for appraisers to review when developing and reporting real estate appraisals in declining markets.
Valuation Advisory #4: Identifying Comparable Properties - Revised
This Advisory provides guidance on selecting and identifying comparable properties. The guidance includes a discussion of the terms and definitions associated with a comparable property, the characteristics generally considered for determining comparability, and the degree of suitability of a property as a comparable.
Valuation Advisory #5: Identifying Comparable Properties in Automated Valuation Models for Mass Appraisal
This Advisory provides guidance on the selecting and identifying comparable properties when using automated valuation and mass appraisal models. The guidance addresses the sales comparison method-direct market models using sales transactions. Also, the guidance examines appraisal uniformity based on the equity comparison method.
Valuation Advisory #6: Valuation of Green and High Performance Property: Background and Core Competency
This Advisory identifies the most prevalent characteristics associated with green buildings, and provides guidance on the background and core competency needed to value green, high-performance, or sustainable commercial and residential buildings as well as existing or new building stock.
Valuation Advisory #7: Valuation of Green and High Performance Property: One to Four-Unit Residential
This Advisory provides guidance on the appraisal of green and high-performance residential properties. The Advisory identifies areas where high-performance building features and market conditions impact the valuation assignment process, including scope of work, information gathering, and analysis techniques.
Valuation Advisory #8: Collection and Verification of Residential Data in the Sales Comparison Approach
This Advisory provides guidance to appraisers who are collecting and verifying data to be used in the sales comparison approach for residential properties. The Advisory contains an introduction to data, a limited discussion on scope of work and the collection of sales data, and a detailed discussion on the verification of sales data.

Valuation Advisory #9: Valuation of Green and High-Performance Property: Commercial, Multi-family, and Institutional Properties
This Advisory provides guidance on specific issues related to commercial, multi-family and institutional properties with the intent of identifying actions, skills, and knowledge necessary for developing and communicating such appraisal assignments.