How many appraisal methods should be used to properly value a business?
USPAP requires that all three approaches to value be considered in every appraisal assignment. If one or more of the standard appraisal approaches (Asset Based Approach, Market Approach, & Income Approach) are not utilized, the reasons why must be stated in the appraisal report. Within each appraisal approach, there are several different appraisal methods that can be considered. There is no authority that states how many methods must be used within an appraisal. The answer as to how many methods should be used depends upon the scope of the assignment. In general, utilization of more than one method within each of the three approaches tends to give added credence to an assignment; however, time and costs considerations often derive the type of appraisal that is to be conducted and the type of appraisal report to be prepared. USPAP states that sufficient methods should be utilized by the appraisal to ensure a creditable work product.
