Only one approach could be credibly developed for an assignment. What does reconciliation involve then?
Correct Answer
C) Judging whether that single indication is credible
Why this is correct: Reconciliation is the process of weighing the credibility of the indications from the approaches used. When only one approach is credible, the appraiser must still assess and report on the reliability of that single indication and the data supporting it. Why the other choices are wrong: 'Nothing, since a single indication needs no weighing' is incorrect; the credibility of the single approach must still be evaluated. 'Averaging that indication with the client's estimate' is unethical and violates independence. 'Developing a second approach regardless of the data' would produce a non-credible result. Exam tip: Reconciliation is about judging the credibility of your evidence, not just choosing between multiple value indications.
Why This Is the Correct Answer
Why this is correct: Reconciliation is the process of weighing the credibility of the indications from the approaches used. When only one approach is credible, the appraiser must still assess and report on the reliability of that single indication and the data supporting it. Why the other choices are wrong: 'Nothing, since a single indication needs no weighing' is incorrect; the credibility of the single approach must still be evaluated. 'Averaging that indication with the client's estimate' is unethical and violates independence. 'Developing a second approach regardless of the data' would produce a non-credible result. Exam tip: Reconciliation is about judging the credibility of your evidence, not just choosing between multiple value indications.
More reconciliation Questions
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?
In appraising a hotel as a going concern, what must be allocated?
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?
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