Brief Definition
The appraisal approach is the method used to determine the value of something. It involves using specific techniques and considering different factors to estimate its worth. Appraisers select an approach that best suits the situation and use it to gather information, analyze data, and arrive at a reliable valuation.
Further Explanation
An appraisal approach refers to the overall framework or methodology used to determine the value of an asset, property, or business. It is a systematic way of approaching the valuation process and involves considering various factors, data, and methods to arrive at a reliable estimate of value. The appraisal approach typically encompasses the selection and application of one or more valuation methods, such as the market approach, income approach, or cost approach, depending on the specific characteristics of the asset and the purpose of the appraisal. The chosen approach guides the appraiser in gathering relevant information, analyzing data, and applying appropriate valuation techniques to reach a credible and objective valuation conclusion.