Q & A for Advisory Opinion 38

Advisory Opinion 38: Content of an Appraisal Report and Restricted Appraisal Report originally appeared in the Appraisal Standards Board 2019 Summary of Actions Related to USPAP Changes, April 17, 2019.

Q&A with a lightbulb. Here come some great answers!


Advisory Opinion 38 (AO-38) compares the reporting requirements under the revised Appraisal Report and Restricted Appraisal Report options. It also replaces Advisory Opinions 11 (Content of the Appraisal Report Options of Standards Rules 2-2 and 8-2) and 12 (Use of the Appraisal Report Options of Standards Rules 2-2 and 8-2).

Advisory Opinion 38 Foundations

AO-38 clarifies the appropriate content that appraisers must include in Appraisal Reports and Restricted Appraisal Reports. It also explains some assumptions made about the requirements of the Appraisal Report contents.

Standards Rules

You can find the minimum content requirements for Appraisal Reports and Restricted Appraisal Reports in Standards Rules 2-2, 8-2, and 10-2. These minimum requirements needed clarification beyond AO-11 and AO-12, and thus AO-38 was created to clarify the minimum requirements further.

Scope of Work Rule

The Disclosure Obligations section of the SCOPE OF WORK RULE is the basis for AO-38.

The report must contain sufficient information to allow the client and other intended users to understand the scope of work performed. The information disclosed must be appropriate for the intended use of the assignment results.

Disclosure Obligations section of the SCOPE OF WORK RULE

General Reporting Requirements in Standards

The General Reporting Requirements in Standards Rules 2-1, 8-1, and 10-1 state that each written or oral appraisal report must:

  • Clearly and accurately set forth the appraisal in a manner that will not be misleading;
  • Contain sufficient information to enable the intended user(s) of the appraisal to understand the report properly; and
  • Clearly and accurately disclose all assumptions, extraordinary assumptions, hypothetical conditions, and limiting conditions used in the assignment.


There are 13 main points of AO-38. Instead of listing the points, the following are common questions about appraisal reports answered by AO-38. Hopefully, this will help you understand what you should include in your reports.

Let’s get to it!

Is an appraiser permitted to be less thorough in developing an appraisal?

The choice of how to report an appraisal does not affect the USPAP requirements, but the development of appraisal results must meet STANDARDS 1, 7, and 9. An appraiser must not be less thorough in developing an appraisal but should be as detailed as needed to meet the standards and make the report clear to the client.

Does USPAP require appraisers to use specific labels on appraisal reports?

Other labels are allowed along with “Appraisal Report” and “Restricted Report.” Just be sure to include whether the report is an Appraisal Report or Restricted Report and add any other appropriate label as you deem fit.

Under what conditions does USPAP permit a Restricted Appraisal Report?

Standards Rules 2-2(b), 8-2(b), and 10-2(b) allow Restricted Appraisal Reports to be created for clients and for others who are identified by name in the report.

When may it be appropriate to issue a Restricted Appraisal Report?

A Restricted Appraisal Report may be appropriate if:

  1. The client understands the limited utility of this option;
  2. The intended use of the appraisal is suitable for a report which does not contain the supporting rationale for all of the opinions and conclusions outlined in the report; and
  3. The client (and, if applicable, named other intended users) do not need the level of information required in an Appraisal Report.


  1. The intended use is consultation for acquisition or disposition by a collector who is knowledgeable about the subject property.
  2. A real property owner wants to know the market value of their property but doesn’t need to know details about how the appraiser arrived at that conclusion.
  3. A business orders a regular appraisal of property that has been appraised many times in the past.
  4. The appraisal is for a preliminary hearing to dispute property taxes at the assessor’s office.
  5. The appraisal is limited to opinions and conclusions about simple classifications such as “the highest and best use is as-is, the overall condition is good, and the single-family home conforms to its neighborhood.”

What are the differences in required content between an Appraisal Report and a Restricted Appraisal Report?

In most cases, the difference is whether to summarize the information or state the data.

What is the difference between “state” and “summarize” in the context of a real property Appraisal Report? 

When an appraiser states sections of the Appraisal Report, he identifies the section of the USPAP code that explains the conclusions.

When summarizing parts of the Appraisal Report, the description is far more detailed, with thorough explanations and references to the source of the information.

How must the appraiser disclose restrictions on the use of a Restricted Appraisal Report?

Standards Rules 2-2(b), 8-2(b), and 10-2(b) state that the appraiser must disclose restrictions on the use of a Restricted Appraisal Report clearly and thoroughly.

When might an appraiser need to exceed the minimum requirements for an Appraisal Report or Restricted Appraisal Report?

Appraisers are free to provide further explanation and background in appraisals as they deem necessary. An appraiser must be sure that all information included in the report is clear and thoroughly descriptive.

Can an appraiser issue an Appraisal Report if she exceeds some of the minimum reporting requirements for a Restricted Appraisal Report but does not meet all of the needs for an Appraisal Report?

No. Although the appraisal exceeds the requirements for one type of report, if it does not include the requisite information of another kind of report, it cannot be used.

Is the appraiser required to make workfile retrieval arrangements with the client?

No, the appraiser is not required to do so.

Are there only two ways to report an appraisal?

No, there are may ways to report an appraisal. USPAP only sets minimum requirements but does not limit the options for reporting opinions of value.

What if a reviewer asks for additional information from the workfile, although the client was satisfied with the work?

To share assignment results with anyone else, you must receive approval from the client.

For oral reports, what is meant by substantive matters?

Standards Rules 2-4, 8-4, and 10-4 state that an oral appraisal report must “to the extent that it is both possible and appropriate” address the substantive matters outlined in Standard Rules 2-2, 8-2, and 10-2. Ultimately, the appraiser has to decide what “substantive matters” means.

Approval must be received from the client in order for the appraiser to share assignment results with anyone else.

13. For oral reports, what is meant by substantive matters?


Advisory Opinion 38 clarifies AO-11 and AO-12 and leaves little room for confusion over the minimum required content in Appraisal Reports and Restricted Appraisal Reports. As stated in the Opinion, “The minimum content requirements do not prohibit an appraiser from providing more extensive explanation and background.” As an appraiser, rely on professional judgment. There’s a reason you have to endure so much training. One piece of advice is to err on the side of caution and include more information instead of less.
Also, remember that USPAP sets the minimum standard local jurisdictions, but investors and clients can and often do impose additional requirements. Make sure to review the local jurisdiction and assignment-specific requirements for any other overlays.

Happy appraising!

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