URGENT. IRS now requires that you be competent in USPAP for tax related appraisal work, i.e. decedent estate, gift tax, and charitable donation. In addition, the new International Financial Reporting Standards (IFRS) adopted by U.S. Regulatory Agencies is now being implemented. The New Standard will require all long-term assets (machinery, equipment, etc) to be stated as FAIR VALUE, FASB 157. CPAs sign off on an audited financial statement. Therefore, CPAs signing off on the audited statement will need to know the appraisal of Fair Value is realistically supported. You need to understand USPAP.

We have a few seats left for our Saturday/Sunday course – to register go to http://tinyurl.com/m3n9vf for an on-line form to email to ASA.Norcal@gmail.com or call Nancy Stacy at 925 939-4367.

Program Meeting

Narrative Appraisal Report Writing: Good, Bad & Ugly!

Thursday, October 8

6:30 pm (mixer) 7:00 (dinner)

Brief Board Meeting 6:00 all members are welcome to attend

Place: L’Olivier Restaurant, 465 Davis Court, San Francisco in the Club Room. (415-981-7824) The restaurant is easily accessible via BART (Embarcadero Station) and $5 valet parking is available.

NOTE: The dinner is being partly subsidized by the chapter, so the cost is a low $37 for members, candidates & spouses, $60 for non-members. RSVP NOW please to Secretary Jack Young at jack@norcalvaluation.com and let him know you are coming. Do not reply to the Newsletter address—Jack is the one who needs to know!

“Most narrative appraisal reports are a rambling elongated jumble of disjointed unsupported statements and assertions. Typically, such reports are filled with boilerplate, appraisal jargon, idiomatic expressions, and professional society dogma. All wrapped in a weighty package.

“It is common humor among appraisers that a gorged report is sold by the pound. Historically, the teaching of narrative appraisal report writing has been an enigma wrapped in an appraisal association’s mystical dogma.

“Appraisers take a myriad of courses and learn to walk-the-walk and talk-the-talk, but miss the importance of being bilingual, i.e. being able to communicate in the language of the reader. Appraisal classes, with few exceptions, do not teach students how to communicate with clients. One should not need an appraisal dictionary to puzzle through the narrative report.” – Roger Durkin

Writing the Narrative Appraisal is Roger Durkin’s fifth text book, and he has promised to bring some autographed copies. Previously, he published Marketing Appraisal Services, The Appraiser as Expert Witness, Personal Property Theory and Practice, and Introduction to Business Valuation for Real Estate Appraisers.

Certainly, everything changes. However, appraisal report writing has been slow to rid itself of dogma, jargon, and archaic boiler plate. USPAP mandates elements of a report, but has yet to mandate a format or require a particular flow. This failure adds confusion to Standard Rule 3 Reviews. If there is no uniform reporting standard then how does one objectively critique the content and rationale of an appraisal report?

The directional compass swings when you add to this issue the fact that there are additional standards including International Valuation Standards and a myriad of other professional association standards. Some improvement has come from the occasional court challenges, where a judge has criticized a report. Most appraisal reports continue to be rambling unconnected diatribe. Wisdom comes from experience. Experience from good judgment, good judgment from bad judgment. Appraisal is a life long study. The text is only a guide to gaining that experience.

Roger Durkin has been a multi-discipline/general practice appraiser for 35 years. He is also an attorney. The appraiser-side taught the attorney-side and visa versa. Seeing appraisal reports from both sides of the dispute adds considerable insight. As Einstein said about science, “the eureka is in comprehending.”

Durkin is a former investment banker and Member of the Philadelphia-Baltimore-Washington Stock Exchange. He has, for more than 30 years, appraised business enterprises involving decedent estate, gift tax, charitable donation, ESOPs, shareholder litigation, and buy-sell agreements. Among the projects were: the appraisal of the former Soviet Academy of Sciences Pharmaceutical facility in Riga Latvia, the Fore River Quincy Shipyard facility for the U. S. Maritime Administration, medical practices for acquisition by hospitals, and a wide range of enterprises.

In addition, Durkin is qualified in personal property—and has valued the art collection for the US Trust headquarters in Boston; and the art collection of Aetna Insurance and Phoenix Insurance companies, the Alexander Graham Bell museum, DAR Museum in Martha's Vineyard; all personal property at Babson College including the Sir Isaac Newton collection; artifacts for the U.S.S. Constitution Ship holdings. Durkin is the contract appraiser for the U.S. Customs Service relative to seizures of art, coins, jewelry, artifacts, and rugs in Port of Boston to Buffalo.

He is qualified in real property as a former review appraiser for the Massachusetts Office of Inspector General and the MBTA. He has five designations from the American Society of Appraisers, served 6 years on International Ethics (Peer Review) Committee, various other committees, and an ASA’s International Governor. He is a Senior Professional Appraiser with the National Association of Professional Appraisers, on the panel of arbitrators of the American Arbitration Association, a Licensed Certified General Real Property Appraiser, and a licensed Attorney. He served a 6-year term as hearing officer for the Massachusetts Bar of Overseers. He has taught USPAP since 1992 and has taught in Mexico, at ASA conferences, and at Kaunas Technological University in Lithuania. His appraisal practice is litigation support. His legal practice is appraisal malpractice, consumer protection, estates, copyright, art law, and torts.

President’s Message

By Doug Baxter

“Anca Mosoiu’s talk on Internet marketing was the best I have ever heard on the topic…” Jim Brown, ASA, former Governor, District 5

The Northern California ASA Chapter’s September dinner program featured MIT graduate and professional Web developer Anca Mosoiu of Tech Liminal. Ms. Mosoiu brought a wealth of information perfectly tailored to appraisers and small businesses.

Using the recent developments in our own ASA online marketing campaign, Ms. Mosoiu analyzed the most useful and relevant issues relating to appraisers of all disciplines. Key areas presented in her 45 page PowerPoint presentation included:

Facebook used as a professional page or personal communication tool
Twitter’s mixed reviews and very limited size
LinkedIn’s growing network of millions
Blogs and Blogger which can be used in conjunction with all the above
Webpage navigation and metrics related to analyzing users searches

An interesting point related to Google’s analytics which help analyze web traffic relates to key word searches. What you might think is great text, may in fact be placing you below your competitors in page rankings. Do you know exactly how people found your business site? What words in your online content work for you and how do they relate to demand for your services? How much do you have to pay to get more online traffic? Ms. Mosoiu had surprisingly inexpensive answers to some of these questions and is available for private consultation at very competitive rates.

Are you to busy to attend a lecture? How can you afford to miss them! Remember that CE (continuing education) credits are available for each meeting and the second meeting you attend is potentially worth 4 CE credits.

Doug Baxter, ASA

Northern California Chapter President

Cell 415-377-0444

Upcoming Events

15-Hour National USPAP Course

Saturday and Sunday, October 3-4, 8:00 – 5:30

San Francisco Marriott, Fisherman’s Wharf

Sponsored by ASA NorCal Chapter – 4 seats left!

What is the potential liability for practicing appraisal without being current with USPAP or having an understanding of how USPAP applies?

The IRS regulatory mandate, the OCC rattling swords about asset based lending, the new auditing requirements, review requirements in the mark-to-market changes, and more important, the rising civil liability. Appraisers are getting sued for $$$$$ and lots of it because of negligence! That includes not practicing in accordance with the national standards, i.e. the generally accepted appraisal standards.

Example: if the IRS mandates that the appraisal be done in accordance with USPAP... how in the world can an appraiser who took a USPAP class five years ago have any USPAP competency in practicing in accordance with USPAP today??? Amazing!!! Really is.

Either these appraisers give USPAP lip service and figure... “What the heck... there are no USPAP police... why do I need this?” CPA's have FASB; Lawyers have the Code of Professional Conduct, etc. The appraiser has USPAP! Ignore it at your peril! BANG!

After the appraiser is sued for the tort of negligence or malpractice... the lesson is much harder learned. "Buy an insurance policy against that possibility—stay current with USPAP—it may turn out to be a bullet proof vest!”

-Roger Durkin, JD, ASA

All-Discipline Expert Witness Appraiser Intensive

For all of our members and associates, our Northern California–Nevada chapter is offering a two part program as a base for becoming a better expert witness or being aware of what it entails. It is applicable for all appraisal disciplines.

The first part is the all day seminar “Appraiser as Expert Witness” on Thursday, October 8, 2009 8AM to 5:30 PM at the Marriott Fisherman’s Wharf in San Francisco. It will be taught by Roger Durkin and Robert Podwalny. It covers:

1. Pre-engagement considerations

2. Interaction between expert and attorney

3. Discovery/investigation

4. Preparation of the expert’s report

5. Critique of opposing expert’s report

6. Trial preparation

7. Qualification as an expert

8. Conduct at trial

9. Do’s and don’ts while on the witness stand.

The tuition is $250.00 and includes the textbook, The Appraiser as Expert Witness, by Roger Durkin. A few seats left – call Nancy Stacy at 925 939-4367 to register, or go to http://tinyurl.com/m3n9vf for an on-line form to email to ASA.Norcal@gmail.com.

Judge Richard Livermore

The second part of our program will be presented by Richard Livermore, active Supervising Judge in the Superior Court of California, on “A Good Expert Witness and a Bad Expert Witness from a Judge’s Perspective” at the November 12 ASA dinner meeting sponsored by the BV discipline.

This will give you the input of what the Judge hears and how he sees expert witnesses, and gives you the opportunity to ask a judge about what you have learned. The fee is the $37 for members, candidates and spouses, $60 for non-members, and includes dinner. Be sure to RSVP in advance with Jack Young at jack@norcalvaluation.com (530 219-7900) as space may be limited.

If you are interested in investing a day and one evening and a little bit of textbook review, you will have a good grounding in this sub-specialty of your discipline.

- John Barnet, AM

Governor’s Message

By Greg Ansel

September has been a busy month. Since my last correspondence, I have been on two BOG calls, a Budget and Finance call and the BV 302 vetting session. This letter will touch on those and few other items that I believe are important to the membership:

New ASA Executive Vice President (“EVP”)
ASA Web Site
CICBV (Canadian Institute of Chartered Business Valuators)
Education/Seminar

In August, Laurie Saunders resigned as EVP of ASA. The Executive Committee selected a multi-discipline committee to complete a search for a new EVP. On the September 2009 monthly BOG call, the search committee recommended Jane Grimm, ASA Director of Education and Accreditation, and the BOG approved her promotion. I have worked with Jane as part of the Board of Examiners and I have found her to be very responsive, professional and concerned with the success of the ASA. Please give her your full support.

The ASA web site – a number of concerns were raised and debated regarding the implementation and cost of the new ASA web site. First, the Web Site is a work in progress and HQ and the IT Committee are working hard to make the Web Site fully functional as soon as possible. The site is improving, but if you are experiencing any problems, please contact me or HQ. Equally important, the cost to implement the web site has been high and higher than anticipated. This was discussed in detail in the Budget and Finance Committee as well as the BOG. After much discussion, the BOG approved some additional funding, but less than requested with the requirement of monthly progress and cost reports.

The BOG approved a resolution signifying ASA’s support to create with CICBV an umbrella organization to expand ASA and CICBV internationally primarily through education. The Business Valuation Committee is enthusiastic regarding this proposal and the ASA overall believes that the International arena provides the ASA an opportunity to not only grow, but enable the ASA to influence appraisal standards internationally.

Finally, ASA offers tremendous education opportunities and I encourage you to take advantage of them. In our region alone, the MTS annual conference will be in San Francisco from October 4-7. The Northern California Chapter is putting on two seminars surrounding the conference – a USPAP class and an Expert Witness Class. The BVC is offering a Fair Value Summit on November 13also in San Francisco. As mentioned above, I also attended the BV 302 vetting session, which is a new course on advanced intangible asset topics that is expected to be introduced in 2010. Please check the ASA Web Site for education opportunities.

As always should you have any questions or concerns please contact your local chapter president or me directly (gansel@fscg.com).

Greg Ansel, ASA

Governor, Region 5

Events Calendar

OCTOBER 2009

3-4^th All-discipline 15-hr USPAP, SF Fisherman’s Wharf

4-7 MTS International Conference at Fisherman's Wharf, SF

8^th Appraiser as Expert Witness Seminar, SF Fisherman’s Wharf

8^th (Thur) Chapter Meeting, Roger Durkin: “Writing the Appraisal Narrative”

NOVEMBER 2009

12^th (Thur) Chapter Meeting, Judge Richard Livermore, Supervising Judge in the Superior Court of Ca: “A Good Expert Witness and a Bad Expert Witness from a Judge’s Perspective.”

DECEMBER 2009

10^th (Thur) Chapter Meeting, Tony Correia: “Vines & Wines: Market Trends”

*Merry Christmas & Happy Holidays!* Cherish your family.

JANUARY

14^TH Chapter Meeting

FEBRUARY

11^th Chapter Meeting

MARCH 2010

11-14 MTS 208, Marine Vessel Survey - SF

11^th Chapter Meeting

NorCal Officers & Directors

L to R:, Gil Mitchell, ASA, Treasurer; Robin Erdmann, ASA, Past President, Doug Baxter, President; Bob Lentz, Vice President; Jack Young, Secretary (not pictured)

L to R: Gil Mitchell, ASA, Treasurer; Doug Schnitzer, ASA; Nancy Stacy, ASA, G&J Director; Robin Erdmann, ASA, Past President; Doug Baxter, ASA, President; Roger Rapport, ASA, PP Director, Bob Lentz, ASA, Vice-President; Directors not pictured: John Barnet, AM, BV Director

Chapter Officers

Chapter President Douglas S. Baxter (ASA)

Chapter Vice President Robert P. Lentz III, ASA (BV)

Chapter Secretary Jack Young (MTS)

Chapter Treasurer Gil Mitchell, ASA (MTS)

Chapter Past Chair Robin J. Erdmann, ASA (RP)

Discipline Directors

Business Valuation John Barnet, AM

Gems & Jewelry Nancy Stacy, ASA*

Machinery & Technical (Orphan - Need a volunteer)

Real Property Ray Mattison, ASA

Personal Property Roger Rapport, ASA

International Officers

International President Mike Evans, ASA

Region 5 Governor Greg Ansel, ASA

Anyone interested in being an active participant in the chapter should contact Doug Baxter at DBaxter@hobartappraisals.com

Images:

Scenes from the September Meeting