Why is it inappropriate to state that all three approaches were weighted equally when only one had adequate data?
Correct Answer
B) The statement misrepresents the basis of the opinion
Why this is correct: Reconciliation must accurately describe the reasoning behind the value conclusion. If one approach provided the primary support, stating that all three were weighted equally misrepresents the analytical process and is misleading. Why the other choices are wrong: "Equal weighting is prohibited by Standard 2" is not true; equal weighting is allowed if justified. "Equal weighting requires the client's approval first" is not a USPAP requirement. "Three approaches may never be developed together" is false; multiple approaches are often developed. Exam tip: The reconciliation narrative must truthfully reflect how the conclusion was reached.
Why This Is the Correct Answer
Why this is correct: Reconciliation must accurately describe the reasoning behind the value conclusion. If one approach provided the primary support, stating that all three were weighted equally misrepresents the analytical process and is misleading. Why the other choices are wrong: "Equal weighting is prohibited by Standard 2" is not true; equal weighting is allowed if justified. "Equal weighting requires the client's approval first" is not a USPAP requirement. "Three approaches may never be developed together" is false; multiple approaches are often developed. Exam tip: The reconciliation narrative must truthfully reflect how the conclusion was reached.
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?
Three approaches indicate $1.02 million, $1.05 million and $1.04 million. How should this be reported?
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