Two ASA Members Serve as Panelists for the California Board of Equalization

On December 6, two Accredited Senior ASA appraisers – Garrett Schwartz and Jack Young – served as panelists at the California Board of Equalization meeting on “Assessment of Personal Property & Fixtures: Ensuring Accurate & Consistent Valuations & Application Methods.” Messrs. Schwartz and Young addressed the determination of life schedules for personal property fixtures and equipment and how the concept of one-size-fits all life schedules is not an adequate approach to equipment valuation for personal property taxation.

Any conclusion of value derived by using the assessor’s schedules must be reconciled to the market in order to reflect actual value. However, the tables used by tax assessors do not fully account for physical depreciation and don’t account for functional and economic obsolescence. Mr. Young recommends that the Board of Equalization include instructions in the Assessors’ Handbook directing county assessors in reconciling derived values to the market via listings, brokers, dealers, appraisers, industry experts, and market participants. Because all approaches to value – sales, cost, and income – are market approaches, it’s critical that assessors – as well as appraisers – always compare the value concluded using any valuation methodology to what is actually going on in the market and reconcile any disconnections.

Mr. Schwartz addressed specific problems with the current assessor methods in using life tables.  Such life tables are intended to be starting points for valuation but are not intended to be substituted for an appraiser’s professional judgment; they ignore functional and economic obsolescence and do not account for the value differences between manufacturers and models nor for differences in an assets condition. Mr. Schwartz reviewed information from ASA’s Estimated Normal Useful Life Study and recommended that the Board of Equalization assist appraisers in communicating with assessors about the differences between their mass appraisal techniques and the more precise results available from properly formulated and developed appraisals.

ASA values the contributions and expertise that our members provide to the appraisal profession. To view agenda or watch the video of the Board of Equalization meeting, please click here.