Appraisal Institute Annual Meeting
Valuation for Financial Reporting
August 2014
Panelists
Louis Yorey, MAI, AM, MRICS – Managing Director, PwC – New York, NY
Randi S. Rosen, MAI, MRICS – Principal, KPMG – San Diego, CA
David Swanson, MAI – Senior Manager, Deloitte – Los Angeles, CA
Kyle Redfearn, MAI – Managing Director, CBRE – Dallas, TX
Eric B. Garfield, MAI, CCIM – Managing Director, WTAS LLC – Los Angeles, CA
Moderator
Format for 2014 Presentation
1.
2.
3.
4.
5.
6.
Review 2013 Presentation Key Concepts
Overview/Key Issues – Louis Yorey, MAI
USPAP Standards in VFR (Purpose, Intended Use, Client) – David Swanson, MAI
Impact of Obsolescence in VFR – Randi S. Rosen, MAI
Report Formats and Audit Review Survival – Kyle Redfearn, MAI
Questions & Answers for the Panel
a. How do I get this work?
b. How do I increase my competency for VFR?
c. Is State Licensing required for VFR?
d. Does an Audit Reviewer perform a USPAP Std. 3 Review of my work?
e. What is AI doing to prepare us for “The Avalanche” --- work in VFR?
f. What’s in it for SRAs?
Review from 2013 Presentation
•
VFR as it pertains to Real Estate, Tangible Assets, Goodwill, Combinations and
Long-Lived Assets is covered under the Financial Accounting Standards Board
(FASB) Standards (SFAS) 141R, 157, 142 and 144.
•
Definition of Fair Value:
“The Price that would be received to sell an asset or paid to transfer a liability
in an orderly transaction between market participant at the measurement
date.” (ASC 820 formerly known as SFAS 157)
“The amount at which an asset (or liability) could be bought (or incurred) or
sold (or settled) in a current transaction between willing parties, that is, other
than in a forced or liquidation sale.” (ASC 350)
Overview of Fair Value/Key Issues
Louis Yorey, MAI (PwC, Managing Director)
• Overview of Fair Value
• Key Issues:
– Value in Use/Exchange – In
Combination/Stand Alone
– Leases
– Customer Relationships
– Materiality
USPAP Standards in VFR
David Swanson, MAI (Deloitte, Sr. Mgr.)
• Appraisal Process Introduction
1. What is the Purpose?
2. What is the Intended Use?
3. Who is the Intended User?
4. Who is the Client?
• What Report Format is appropriate
for VFR?
• Discussion on Appraisal Review
Process
Impact of Obsolescence in VFR
Randi Rosen, MAI (KPMG, Principal)
• Obsolescence in VFR
1. When is Obsolescence
“Functional” in VFR?
2. When is Obsolescence “External”
in VFR?
3. Does “In Combination” address
Obsolescence?
4. What to do when Value-In-Use >
Value-In-Exchange.
5. What is expected by the reviewer
when presented with an RCNLD
calculation?
Report Formats and Audit Review
Kyle Redfearn, MAI (CBRE, Managing Dir.)
1. What is the “appropriate” report
format for VFR work?
2. Is there a “Hybrid” report format
for VFR?
3. How does Scope of Work factor
into the report format?
4. How do we report on intangibles
(i.e. above/below market leases)?
5. How do you deal with Exposure
Time in VFR reports?
6. How do you survive an Audit
Review?
Audit Review Checklist
• Dave Swanson’s least
favorite chart on VFR

Reviewers --- What do
you expect from the
Appraiser when reviewing
their work?
Q&A