One report treats known contamination as already remediated; another presumes an unverified permit is valid. What distinguishes the hypothetical condition from the extraordinary assumption?
Correct Answer
D) A hypothetical contradicts known fact; an assumption treats the uncertain as true
Why this is correct: A hypothetical condition is an assumption contrary to known fact (e.g., treating known contamination as remediated). An extraordinary assumption treats uncertain information as true (e.g., presuming an unverified permit is valid). Both require disclosure. Why the other choices are wrong: The distinction is not based on land vs. improvements. Both are permitted with disclosure, not forbidden. Both require disclosure. Exam tip: Key question: Does it contradict a known fact (hypothetical) or address an uncertainty (extraordinary assumption)?
Why This Is the Correct Answer
Why this is correct: A hypothetical condition is an assumption contrary to known fact (e.g., treating known contamination as remediated). An extraordinary assumption treats uncertain information as true (e.g., presuming an unverified permit is valid). Both require disclosure. Why the other choices are wrong: The distinction is not based on land vs. improvements. Both are permitted with disclosure, not forbidden. Both require disclosure. Exam tip: Key question: Does it contradict a known fact (hypothetical) or address an uncertainty (extraordinary assumption)?
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
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In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
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