Art appraisals

ART APPRAISALS

Appraisals are important legal documents intended to establish the value of property and its current place in the market. Most collectors know the importance of art insurance coverage for protection of their assets but many do not know about the importance of obtaining proper documentation. The appraisal usually comes into the spotlight during moments of damage, fire, loss, or theft when the insurer carefully reviews the document to determine whether or not, and at what value, the client will be compensated for the work. It is important for collectors to take inventory of the artwork in their homes, offices, or storage spaces and update appraisals every 3-5 years, particularly during volatile fluctuations in the market. There are a number of different types of appraisals:

Insurance: To determine the Retail Replacement Value of an object in order to provide appropriate insurance coverage.
Damage and Loss: To determine the value of an object that has been lost or damaged and the amount of loss in value as a result of damage.
Donations: To determine the Fair Market Value of an object given to an institution and establish the donor's allowable income tax deduction.
Estates and Property Division: To determine the Fair Market Value of an object in connection with the preparation of estate tax returns, or to aid in asset distribution jointly owned by couples, by business associates, or corporations changing ownership.
Financial: To determine the Fair Market Value of an object for asset management, loan collateral and related financial and legal matters.
Informational and Market Related: To determine the Fair Market Value of an object in anticipation of a contemplated sale or under consideration for purchase.

WHAT'S IN AN APPRAISAL?

Properly prepared appraisals are individual written reports and are not simple lists of property with numbers attached. The specific content and format of each appraisal report varies according to the individual situation, but each appraisal should contain the following information (as outlined by the Appraisers Association of America):

Name and Address of Client
Purpose of the Appraisal Intended use: Donation, Estate, Equitable Distribution, Insurance, Etc.
Type of Valuation Used: Replacement Value, Fair Market Value, Marketable Cash Value, etc. and Definition.
Valuation Approach Used: Cost Estimate Approach, Income Approach, Market Data Comparison Approach, etc
Market in which valuation is applied: most common market (place).
Market Analysis Generic market History and possible projections for future activity.
How objects were acquired.
Curriculum Vitae of appraiser and consulting appraiser, if relevant.
Date of Preparation of Appraisal and date on which objects were viewed. Effective date of Appraisal.
Statement of physical inspection or method used in determining value.
Statement of "disinterest" on the part of the Appraiser.
Statement that the Appraiser has not been "disqualified" by the IRS (for IRS Appraisals).
Statement of Assumptions and Limiting Conditions.
Statement of Fee Structure
Statement of belief in authenticity that the appraised object(s) correspond to description(s) listed in the Appraisal.
Clear division of appraisal when one or more than one appraiser is involved.
Thorough description of appraised objects.
Brief biography of the artist when necessary.
Provenance, exhibition, and publication history (if available or any).
Statement of condition of appraised objects.
Comparables and related analysis.
Firm statement of value - not estimates, except when followed by detailed explanations of qualifications.
Signature of Appraiser(s) and Tax ID number(s) when appraisal is prepared for IRS purposes.
Statement of number of pages in appraisal.

USPAP COMPLIANCE

We offer independent appraisals that conform to the Uniform Standards of Professional Appraisal Practice (USPAP), prepared in accordance with the established technical, methodological, and ethical requirements of the Appraisers Association of America. We also offer valuation advice to private wealth managers, financial institutions and venture capitalists. Our area of specialization is Old Master Paintings.