July 16, 2009

The Appraisal foundation is a little known entity in the personal property community which includes the Machinery & Equipment appraisal community. Many of us recognize that it has something to do with USPAP. In these turbulent times with so much change coming at us, it is important for us to understand the foundation and its functions.

The Appraisal Foundation is mandated and funded by congress. The mandate of the foundation is to provide minimum standards and qualifications for all appraisers and is structured in such a way as to enhance the independence of the appraisal community. The foundation consists of the Board of Trustees (BOT), the Appraisal Qualifications Board (AQB), the Appraisal Standards Board (ASB) and several committees. The AQB sets the minimum qualifications for all appraisers and the ASB sets the minimum standards for appraisal process and reporting (USPAP).

The Appraisal Foundation Advisory Committee (TAFAC) is made up of all interested parties who have any interest appraisal activity. The committee members include associations who certify appraisers (about 150 of them), government bodies such as IRS, Justice Department, Fannie Mae & Freddie Mac. The TAFAC committee makes recommendations to the foundation to address changes and current circumstances in the appraisal universe.

The appraisal community breaks down into two major groups, real estate and personal property. The real estate community accounts for about 95% of all the appraisal activity, The personal property community which includes fine arts, jewellery, personal estate and of course M & E accounts for the rest of the activity. As a consequence the interests of the personal property community are not always at the top of the agenda. However thanks to the efforts of Nate Arnold and others, the personal property interests are being raised higher on the agenda.

In addition to dealing with current issues, the foundation reviews and updates USPAP on a two year cycle. The current cycle from 2010 to 2011 will review standard 7 & 8 of USPAP which are the personal property standards. The personal property working group will be making recommendations to the TAFAC committee to make improvements to these two standards. The AMEA is represented on this working group as well as the TAFAC committee.

Because the Appraisal Foundation issues an updated version of USPAP every two years, we as appraisers have a responsibility to ensure that we are working to the current standards. The AMEA is very active in disseminating this information to our members. We do this through our MDNA chapter representatives and postings on our web page. There are substantial changes to the ethics rules in the upcoming version of USPAP. These are available in the Q & A section on the AMEA website.


In closing, every appraiser makes a statement in their appraisals “This report is written in compliance with USPAP”. It is the appraiser’s responsibility to be sure that this statement is accurate.

AMEA representatives as active participants in the Appraisal Foundation are Nate Arnold as Chairman of The Appraisal Foundation Advisory Council, and Casey Mulqueen and Brian Block as members who are fully capable of providing a solid foundation for the interests of personal property Appraisers.