In appraising a hotel as a going concern, what must be allocated?
Correct Answer
B) The real property, personal property and intangibles
Why this is correct: The original explanation notes that a going concern includes real estate, personal property (furnishings), and intangible business value (e.g., brand, operating agreements). For a real estate appraisal, the value of the real property component must be allocated and isolated from the other components. Why the other choices are wrong: The value between land and the building alone is a cost approach allocation, not specific to a going concern. The income between the operator and the lender refers to income streams, not asset allocation. The depreciation across each building component is part of the cost approach, not the going-concern allocation. Exam tip: For a going concern, you must allocate value among real property, personal property, and intangibles.
Why This Is the Correct Answer
Why this is correct: The original explanation notes that a going concern includes real estate, personal property (furnishings), and intangible business value (e.g., brand, operating agreements). For a real estate appraisal, the value of the real property component must be allocated and isolated from the other components. Why the other choices are wrong: The value between land and the building alone is a cost approach allocation, not specific to a going concern. The income between the operator and the lender refers to income streams, not asset allocation. The depreciation across each building component is part of the cost approach, not the going-concern allocation. Exam tip: For a going concern, you must allocate value among real property, personal property, and intangibles.
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An appraiser is told the property has no environmental contamination and cannot verify it. How should this be handled?
Reconciliation of the approaches to value is best described as which activity?
Significant appraisal assistance from a person who does not sign the report must be treated how?
What does it mean to say an approach is not applicable to an assignment?
Which of the following is a written report option named in the current edition of USPAP?
What distinguishes qualitative from quantitative analysis in the sales comparison approach?
Why should the reconciliation address the quantity of evidence as well as its quality?
An appraisal report includes an addendum explaining the adjustment derivation. How does this affect compliance?
An extraordinary assumption proves false after the report is delivered. What follows?
How long must a report be retained compared with the workfile?
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