Appraisal Methodology & Report Writing Flashcards
7 cards from real CGA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Appraisal Methodology & Report Writing flashcards as text
When an appraiser uses comparable sales data from auction records to support a value conclusion, this is an example of which appraisal methodology?
Answer: Sales comparison approach
The sales comparison approach uses actual market transactions of comparable items to support value conclusions, and auction records are a recognized source of comparable sales data.
A client asks a CGA to inflate an appraisal value for insurance purposes. The correct response is to:
Answer: Decline and explain that inflating values is unethical and potentially fraudulent
Inflating appraisal values for insurance constitutes fraud; the appraiser must decline and may be required to report the request under applicable professional standards.
The term 'market level' in personal property appraisal refers to:
Answer: The tier of buyers and sellers in the distribution chain (retail, wholesale, secondary)
Market level identifies which point in the distribution chain is relevant — retail, wholesale, or secondary markets — each producing different value indications for the same item.
An appraiser is asked to provide a 'verbal appraisal.' Under USPAP, which statement is TRUE?
Answer: Verbal appraisals are acceptable but still require a work file
USPAP permits oral appraisal reports but requires the appraiser to maintain a work file documenting the basis for the conclusions communicated verbally.
Which component of a gemstone appraisal report provides the appraiser's professional credentials and qualifications?
Answer: The appraiser's certification and qualifications section
The appraiser's certification and qualifications section establishes the professional's credentials, education, and experience, lending credibility to the value conclusions.
When a CGA determines that a gemstone has been subjected to a previously undisclosed fracture filling treatment, the appraiser should:
Answer: Disclose the treatment in the report and adjust the value conclusion accordingly
All treatments that affect value must be disclosed in the appraisal report, and the value conclusion must reflect the stone's actual treated condition.
Which of the following is the primary reason appraisal values should be updated periodically?
Answer: Gemstone and precious metal markets fluctuate, making older appraisals potentially inaccurate
Market conditions for precious metals and gemstones change over time, so an appraisal that was accurate several years ago may no longer reflect current replacement or market values.