Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
Correct Answer
B) As corroboration, with weighting still explained
Why this is correct: Close agreement among value indications from different approaches provides corroboration and strengthens confidence in the conclusion. However, the appraiser must still explain the reasoning and weighting given to each approach, as the indications could share a common error. Why the other choices are wrong: "As proof that the conclusion is beyond dispute" is wrong; appraisal is an opinion, not proof, and agreement does not guarantee accuracy. "As grounds for averaging the three indications" is wrong; value is a reasoned conclusion, not a mechanical average. "As a reason to omit the reconciliation section" is wrong; reconciliation and explanation are always required. Exam tip: Reconciliation requires explanation, not just averaging, even when indications are close.
Why This Is the Correct Answer
Why this is correct: Close agreement among value indications from different approaches provides corroboration and strengthens confidence in the conclusion. However, the appraiser must still explain the reasoning and weighting given to each approach, as the indications could share a common error. Why the other choices are wrong: "As proof that the conclusion is beyond dispute" is wrong; appraisal is an opinion, not proof, and agreement does not guarantee accuracy. "As grounds for averaging the three indications" is wrong; value is a reasoned conclusion, not a mechanical average. "As a reason to omit the reconciliation section" is wrong; reconciliation and explanation are always required. Exam tip: Reconciliation requires explanation, not just averaging, even when indications are close.
More Reconciliation Questions
Reconciliation of the approaches to value is best described as which activity?
Why should the reconciliation address the quantity of evidence as well as its quality?
How long must a report be retained compared with the workfile?
What distinguishes an appraisal review from an appraisal?
An appraiser reconciles to a value at the top of the indicated range because the client needs that figure. What has occurred?
What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
What should the reconciliation section explain to the reader?
How do the content obligations of the two report options differ with respect to the information analyzed?
The three approaches indicate $480,000, $495,000 and $610,000. What should the appraiser do first?
A client sends comments disputing the appraiser's adjustment for condition. What is the appropriate response?
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