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Mercer’s Musings #1: USPAP and the Internal Revenue Service

Chris Mercer

This first musing relates to the need (or not) to comply with the Uniform Standards of Professional Appraisal Practice promulgated by The Appraisal Foundation in gift and estate tax appraisals prepared for the Internal Revenue Service. Regarding business appraisers, I cannot find a direct requirement that USPAP be followed.

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USPAP Standards Rule 9-4 Creates a Problem for Business Appraisers

Chris Mercer

There Is a Problem in Business Appraisal Land. There were significant changes in Standards Rule 9-4 of the Uniform Standards of Professional Appraisal Practice regarding the development of business appraisals between 2005 USPAP and 2006 USPAP. louis video when looking for a video marketing company.

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No Marketability Discounts or Discounts for Illiquidity for Controlling Interests of Companies

Chris Mercer

However, in most circumstances, transaction costs are not factored into the appraisal of the subject interest since the pricing information of frequently traded comparable securities is not adjusted for these factors.” Appraisers use transaction multiples from transactions in similar companies with the guideline transactions method.