Proposal To Expand USPAP To Include A New Service Type: Valuation Of Information

[Meandering]

My information is probably worth a dollar on the dark web.

Did someone steal your identity and give it back?

 

[Joe Flacco]

Did someone steal your identity and give it back?

Maybe clearbox did cus they got some of my info.

 

[DWiley]

It looks like information or IP is typically not valued by licensed appraisers but is valued using the same market, cost, and income methods.

Correct on both. Intangible property is usually valued by specialist in that area. The ASA is the most widely recognized organization for that discipline in the US. The fundamental principles of valuation are the same, regardless of property type.

 

[Elliott]

I don't know if there are many who can handle the truth?

1. Is Social Security really a Ponzi Scheme?
2. Did Hillary use an unauthorized server and was grossly negligent in handling classified documents?
3. Did Michael Flynn not lie to the FBI?
4. Is the Trump--Russian Collusion claim without merit?

Who do I bill? : )

Y'know the reason we have surveyors who sign legal descriptions as an individual is because you can sue them for their mistakes.

 

[RCA]

Read further in USPAP. . STANDARDS 9 and 10 are often referred to as the business valuation standards, but they are actually the standards for appraisal of any type of intangible asset. What more is it that you are seeking?

I think it is one of those occasional weaknesses of USPAP where it is not clear what it is saying. Coming under "Business Appraisal", "intangible assets" is implicitly intangible assets related to business appraisal or at least "real property interests". But if you want to take USPAP literally, then you could well argue it applies to all intangible assets.

However, for USPAP to handle valuation of all types of information, then it would need to be expanded simply because in many cases additional measures and techniques are going to be needed. A case in point would be news. New organizations obtain and distribute to the public via subscriptions, statements that they purport represent fact. Their reputation, thus their market share, and then in turn their advertising revenue depend upon whether the public will rely on their statements as fact as opposed to being nothing more than opinion, or worse - political propaganda.

The behavior of news outlets like CNN and MSNBC, especially since about June of 2016, in reporting about Trump shows just how poorly the media can represent fact. For example, there was the statement by Trump that the Mexicans were bringing, ...., their rapists, .... across the border. The context was clear, Trump meant "their rapists". Yet, CNN and MSNBC converted that statement to him saying that "They (the Mexicans) are rapists" - as further proof that he was a racist. This is really shocking to many. This sort of truth twisting and worse has happened over and over since then. It is time to put a stop such behavior.

Now, if a network news program could say that its journalists are "Licensed Information Appraisers", or that its facts were certified by such, it would definitely have a better reputation and a much higher degree of belief than other news programs that could not provide such assurances.

So, what does this take? New organizations sell facts along with assurances of accuracy. That accuracy comes in various ways: (1) Certain words can indicate degrees of probability that certain statements are accurate or partially accurate, e.g. "possibly", "likely", "certainly", etc., (2) They could start attaching degrees of probability to statements as to whether they are true, e.g. there is a 10-20% probability that such and such a person is colluding with the Russians based on their information. Behind the scenes, they would have have Licensed Information Appraisers looking at evidence, constrained by confidentiality, then certifying its degree of accuracy based on generally accepted appraisal standards (which still have to be worked out in this case).

Now, there are certainly many other categories of information and appraisal problems that need to be dealt with. The foregoing is just one example.

 

[DWiley]

I think it is one of those occasional weaknesses of USPAP where it is not clear what it is saying. Coming under "Business Appraisal", "intangible assets" is implicitly intangible assets related to business appraisal or at least "real property interests". But if you want to take USPAP literally, then you could well argue it applies to all intangible assets.

However, for USPAP to handle valuation of all types of information, then it would need to be expanded simply because in many cases additional measures and techniques are going to be needed. A case in point would be news. New organizations obtain and distribute to the public via subscriptions, statements that they purport represent fact. Their reputation, thus their market share, and then in turn their advertising revenue depend upon whether the public will rely on their statements as fact as opposed to being nothing more than opinion, or worse - political propaganda.

The behavior of news outlets like CNN and MSNBC, especially since about June of 2016, in reporting about Trump shows just how poorly the media can represent fact. For example, there was the statement by Trump that the Mexicans were bringing, ...., their rapists, .... across the border. The context was clear, Trump meant "their rapists". Yet, CNN and MSNBC converted that statement to him saying that "They (the Mexicans) are rapists" - as further proof that he was a racist. This is really shocking to many. This sort of truth twisting and worse has happened over and over since then. It is time to put a stop such behavior.

Now, if a network news program could say that its journalists are "Licensed Information Appraisers", or that its facts were certified by such, it would definitely have a better reputation and a much higher degree of belief than other news programs that could not provide such assurances.

So, what does this take? New organizations sell facts along with assurances of accuracy. That accuracy comes in various ways: (1) Certain words can indicate degrees of probability that certain statements are accurate or partially accurate, e.g. "possibly", "likely", "certainly", etc., (2) They could start attaching degrees of probability to statements as to whether they are true, e.g. there is a 10-20% probability that such and such a person is colluding with the Russians based on their information. Behind the scenes, they would have have Licensed Information Appraisers looking at evidence, constrained by confidentiality, then certifying its degree of accuracy based on generally accepted appraisal standards (which still have to be worked out in this case).

Now, there are certainly many other categories of information and appraisal problems that need to be dealt with. The foregoing is just one example.

Well, those who work under STD 9 and 10 do take it literally. Many appraise things that are not related to business interests or real property interests (real property interests fall under STD 1 and 2). Their subject properties might be copyrights, patents, logos, databases, or any other intangible asset.

Also, USPAP is about standards, not methodology. For example, commercial appraisers and residential appraisers typically do not use the same methods for applying the income approach, but they are still subject to the same standards.

What you are suggesting about the veracity of news items sounds to me more like verification than appraisal.

If you really want to explore the topic deeply, I suggest contacting the ASA (American Society of Appraisers).

 

[RCA]

Well, those who work under STD 9 and 10 do take it literally. Many appraise things that are not related to business interests or real property interests (real property interests fall under STD 1 and 2). Their subject properties might be copyrights, patents, logos, databases, or any other intangible asset.

Also, USPAP is about standards, not methodology. For example, commercial appraisers and residential appraisers typically do not use the same methods for applying the income approach, but they are still subject to the same standards.

What you are suggesting about the veracity of news items sounds to me more like verification than appraisal.

If you really want to explore the topic deeply, I suggest contacting the ASA (American Society of Appraisers).

The ASA does provide a credential specific to "Entity and Intangible Valuation" (http://www.appraisers.org/credentials/ceiv-certification), yet this really is more related to financial accounting.

USPAP does in fact deal with methodology and the terms "method(s)" and "methodology" appear throughout. In fact a search of "method" indicates 360 instances in the 2018 USPAP pdf (either alone or as a root of methods or methodology).

Verification is part of appraisal; for example, verification of comparative sales data is an absolute requirement in the sales approach.

However, having said that, verification as an end result might be considered more of a consulting task. However, that is the point - USPAP does needs to be expanded to handle new tasks that are coming along as the result of of our changing population, demographics, the increasing complexity of our society and economy resulting from accelerating technology and so on. Democracy is undergoing a transformation in the view of many.

Now, one might ask why not just create a new USPAP like standard, a new set of organizations and enforcement hierarchy for these new problems? - Because it would cost a hell of a lot more, take an enormous amount of time - and there is a better way to do it - just expand USPAP a tad bit.

 

[DWiley]

The ASA does provide a credential specific to "Entity and Intangible Valuation" (http://www.appraisers.org/credentials/ceiv-certification), yet this really is more related to financial accounting.

USPAP does in fact deal with methodology and the terms "method(s)" and "methodology" appear throughout. In fact a search of "method" indicates 360 instances in the 2018 USPAP pdf (either alone or as a root of methods or methodology).

Verification is part of appraisal; for example, verification of comparative sales data is an absolute requirement in the sales approach.

However, having said that, verification as an end result might be considered more of a consulting task. However, that is the point - USPAP does needs to be expanded to handle new tasks that are coming along as the result of of our changing population, demographics, the increasing complexity of our society and economy resulting from accelerating technology and so on. Democracy is undergoing a transformation in the view of many.

Now, one might ask why not just create a new USPAP like standard, a new set of organizations and enforcement hierarchy for these new problems? - Because it would cost a hell of a lot more, take an enormous amount of time - and there is a better way to do it - just expand USPAP a tad bit.

Yes, USPAP requires use of recognized methods, but the methods themselves are not addressed in USPAP (nor should they be) to the degree you are seeking.

I still do not see the need for the type of USPAP expansion your are talking about. But if you still want go down that road, then send your suggestions to the ASB. They are currently putting together their work plan.

Best wishes

 

[RCA]

Yes, USPAP requires use of recognized methods, but the methods themselves are not addressed in USPAP (nor should they be) to the degree you are seeking.

I still do not see the need for the type of USPAP expansion your are talking about. But if you still want go down that road, then send your suggestions to the ASB. They are currently putting together their work plan.

Best wishes

Well, I would agree that the ASA seems more willing to take on unusual appraisal tasks compared to say the Appraisal Institute. And, RICS is a bit too international.

Methodology for dealing with new information is probably to a large extent already worked out in various standards related to journalism. Unfortunately journalists are very biased as a group and resist any licensing effort or enforcement. Yet, nonetheless, they do have the methodology for verification largely worked out. USPAP would be referring to that methodology, just as it refers to DCF as an accepted method for income valuation. Using appraisers for verifying and even valuing information would provide an "unbiased" means of assessing news statements and assertions.

If you have any contacts or evidence that ASA is working towards an expansion of USPAP, please relay the information. I couldn't find any information in that direction.

 

[DWiley]

If you have any contacts or evidence that ASA is working towards an expansion of USPAP, please relay the information. I couldn't find any information in that direction.

Sorry, I have no such information. I have not worked with the ASA since my days on the ASB. I recommend approaching the ASB directly. They can tell you if anyone has approached them regarding the concept.