Skip to content

The Client vs. The Intended User

May 29, 2013

This question comes up with a fair degree of frequency in the machinery and equipment appraisal world. What’s the difference between a client and an intended user?

Well, there’s a short answer to that and a long answer. The short answer is that the client is the party that requests the appraisal, and the intended user is, well, the intended user of the equipment.

To dig a little deeper, we’ll have to refer to the current USPAP. In the definitions section of USPAP, the term “client” is listed in the definitions section as follows: “The party or parties who engage, by employment or contract, an appraiser in a specific assignment.”

As far as “intended users” go: “Intended users are identified by the appraiser through communication with client and are not established based on who might receive or use the report.”

So in the context of USPAP’s definition of intended user, the fact that the IRS, the courts, an independent auditor, or others will use the report for review, audit, or other purposes does not automatically make them intended users. These parties receive the report through established processes of disclosure or regulation.

One way to think about this is to consider what the intended use is for each party. The appraiser must identify both the intended users and the intended use of the appraisal, because these two factors affect many aspects of the appraisal assignment, such as the appropriate scope of work and the appropriate type of report.

Parties who receive a copy of an appraisal, appraisal review, or appraisal consulting report as a consequence of disclosure requirements applicable to an appraiser’s client do not become intended users of the report unless they were specifically identified by the appraiser at the time of the assignment.

The NEBB Institute endorses and strives to observe the highest standards of professional ethics to preserve the public trust inherent in the professional appraisal practice. The Institute provides initial and monthly comprehensive education, ongoing support, and a dynamic international network, and certifies professionals in the art of machinery/equipment appraisal and brokerage.

By: NEBB Institute

 

Comments are closed.

%d bloggers like this: