During development, acreage is uncertain as of the effective date. The appraiser uses a reasonably supported 5-acre premise that could affect conclusions. A later survey establishes 4.8 acres. How was the original uncertain-information premise classified?
Correct Answer
D) An extraordinary assumption; the new survey requires reassessing it
Classification depends on the appraiser’s knowledge regarding the effective-date information when using the premise. An assignment-specific uncertain fact whose falsity could alter opinions is an extraordinary assumption, not automatically an HC merely because later evidence disproves it. Meet the substantive use and disclosure conditions. On learning material contrary information, reassess the affected analysis and communication appropriately; do not continue presenting a known unsupported premise as though still uncertain.
Why This Is the Correct Answer
Option D is correct because USPAP defines an extraordinary assumption as an assignment-specific assumption, as of the effective date, about uncertain information that could alter the appraiser's opinions if found false. The 5-acre premise was uncertain and could affect conclusions, so it was an extraordinary assumption. Once the survey shows 4.8 acres, the appraiser should reassess the affected analysis and communication rather than keep presenting the premise as uncertain.
Why the Other Options Are Wrong
Option A: A hypothetical condition, simply because later evidence proved it false
Option A calls it a hypothetical condition simply because later evidence proved it false. Classification depends on the appraiser's knowledge when the premise was used; the acreage was uncertain then, so it was not a hypothetical condition.
Option B: Not an assignment condition, because USPAP has no such term
Option B says it is not an assignment condition because USPAP has no such term. USPAP does use the term assignment conditions, and extraordinary assumptions are among them.
Option C: A jurisdictional exception, because a survey now exists
Option C calls it a jurisdictional exception because a survey now exists. A jurisdictional exception arises from law or regulation conflicting with USPAP, and a new survey has nothing to do with that.
Judge it by what you knew
Classify a premise by what the appraiser knew when it was used: uncertain then means extraordinary assumption, even if proven false later.
How to use: Use this when later facts tempt you to relabel an earlier assumption.
Exam Tip
Focus on the appraiser's knowledge as of the effective date when the premise was used. Later discoveries trigger reassessment, not reclassification.
Common Mistakes to Avoid
- -Reclassifying an extraordinary assumption as a hypothetical condition after it proves false
- -Ignoring new material information once the report has been completed
- -Confusing jurisdictional exceptions with changes in available data
Concept Deep Dive
Analysis
This question tests how to classify a premise based on what the appraiser knew at the time it was used. The acreage was uncertain as of the effective date, and the assumed figure could affect conclusions, which matches the extraordinary assumption definition. A later survey proving it wrong does not change the original classification, but it does require reassessing the analysis.
Background Knowledge
An extraordinary assumption addresses uncertain information as of the effective date, while a hypothetical condition is contrary to what is known to exist. Both must meet specific use conditions and be disclosed, and new information can require the appraiser to revisit an assignment.
Real-World Application
An appraiser values rural land without a current survey and relies on a supported 5-acre figure from records, disclosing it as an extraordinary assumption. When a new survey shows 4.8 acres, she reviews whether the difference affects her analysis and addresses it appropriately.
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