Contributor: Luis Rodriguez
American Society of Appraiser Certification
The American Society of Appraisers (ASA) is the largest multi-discipline organization representing appraisers nationwide. The society was founded in 1936 and is one of the eight major appraisal groups that founded The Appraisal Foundation. The ASA is a multi-discipline, non-profit, international organization of professional appraisers representing all appraisal disciplines including:
- Appraisal Review and Management
- Business Valuation
- Gems and Jewelry
- Machinery and Technical Specialties
- Personal Property
- Real Property
The Societies’ mission is to “foster the public trust of our members and the appraisal profession through compliance with the highest levels of ethical and professional standards.” Candidates to the ASA, who must have a four-year university degree or its equivalent, are eligible for the Accredited Senior Appraiser (ASA) designation after completing the following:
- Five years of documented appraisal experience.
- Testing in their field or specialty: (Consisting of several tests depending on the discipline.)
- The submission of two appraisal reports to the society’s International Board of Examiners for review.
- Successful completion of the Principles of Valuation education program.
- A successful completion of the 15-hour Uniform Standards of Professional Appraisal Practice (USPAP) course with examination. 
A lesser level of designation, Accredited Member (AM), requires only two years of documented appraisal experience in addition to all of the other requirements.
Appraisers in the ASA are subject to a mandatory re-accreditation process every five years. To re-certify they must provide proof of professional growth through continuing education, participation in society activities, and the completion of updated USPAP courses. Publishing articles in professional journals and valuation or specialty-related speaking engagements also provide ASA appraisers with re-certification points.
The Importance of ASA Certified Appraisals
The ASA’s “Valuing Machinery and Equipment: The Fundamentals of Appraising Machinery and Technical Assets, 3rd Edition” defines appraisals as follows: “Appraisals of machinery, equipment, and other business assets have a wide field of application. Appraisals are required for a variety of purposes, including allocation of purchase price; bankruptcy; condemnation; dissolutions of marriage, partnerships, and corporations; financing; insurance; leasing; management considerations; mergers and acquisitions; partnership formation and dissolution; transfer of ownership; various types of taxation and tax planning; and utility rate making. Each appraisal purpose requires that an appropriate level, type, or definition of value be selected. As discussed earlier, the client defines the intended use of the appraisal, but it is the appraiser’s responsibility to select or accept the proper definition of value associated with the intended use of the appraisal.”
Ad Valorem Property Tax
When it comes to ad valorem personal property taxes, the largest taxpayers in a tax jurisdiction may be and often are paying a disproportionate tax burden. If an appeal is warranted, property tax savings can be immediate and may even include prior year appeals. Successful appeals of personal property ad valorem tax can save businesses a considerable amount of money when industrial commercial equipment and machinery have been overvalued by the county tax assessor. And overvaluation may be more the rule than the exception: The National Taxpayers Union estimates between 30-60% of property is over-assessed.  A valuation of the property in question, obtained from an independent valuation provider, is critical to building an ad valorem case. To do this, a company may need to enlist multiple valuation experts to provide business enterprise valuations, personal property, and real estate valuations.
County assessors are not likely to adjust their values by considering economic fluctuations or market trends in a particular industry. And they certainly don’t base their equipment valuations on a particular type of equipment, taking into account condition, utility and remaining useful life as a qualified equipment appraiser will. A well-researched and competently presented USPAP(Uniform Standards of Professional Appraisal Practice) equipment appraisal report is an important tool in your appeal process.
When deriving fair market value (for real or personal property), an element of functional or economic obsolescence potentially exists if the property is not new. Functional obsolescence can reflect the loss in property value due to changes in current technology, discovery of new materials, or improved manufacturing processes. Economic obsolescence refers to the loss in value resulting from insufficient economic support that leads to insufficient earnings to support a status quo aggregation of assets. Economic obsolescence is caused by external forces such as governmental laws, technological improvements, or changes in demand.
Functional obsolescence determined by identify excess capacity or capital investment. One of the best ways to remove most functional obsolescence is to develop a replacement cost that addresses excess capacity and excess capital investment.
To determine whether or not economic obsolescence exists, a valuation professional values the components of a business enterprise then ascertains if the sum of the parts is equal to the business enterprise value (BEV). If the sum of the parts exceeds the BEV, economic obsolescence is present. To determine if functional obsolescence exists, a valuation professional will identify elements of under capacity or overcapacity in the subject’s machinery and equipment.
Valuation & Appraisal Services
CostQuest Associates (CQA) focuses on and utilizes its analysts experience in the disciplines of business, machinery and technical specialties, and personal property valuations. CQA has completed studies that have been used for mergers and acquisitions, financial analysis, regulatory efforts, fair market value determinations and tax appraisals. We perform studies ranging from complete business enterprise valuations, to unit method valuations, to individual asset valuations, and all of our certified appraisals are prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP).
CQA’s appraisers have both appraisal designations, and experience in many areas of property valuation including litigation defense. While we focus primarily on communication property, our team has also worked on power company properties, data center properties, and other special purpose properties.
 Uniform Standards of Professional Appraisal Practice: http://www.appraisalfoundation.org/imis/TAF/Standards/Appraisal_Standards/Uniform_Standards_of_Professional_Appraisal_Practice/TAF/USPAP.aspx?hkey=a6420a67-dbfa-41b3-9878-fac35923d2af