CGA Appraisal Methodology & Report Writing 2

Question 1

Which appraisal approach is most commonly used for unique gemstone jewelry where no direct comparable sales exist?

Accepted Answer

Replacement value approach

Answer

Replacement value approach estimates the cost to replace an item with one of similar kind and quality, making it practical for unique jewelry pieces.

Question 2

When appraising an estate piece for fair market value, the appraiser should consider:

Accepted Answer

What a willing buyer would pay a willing seller with neither under compulsion

Answer

Fair market value is defined by IRS standards as the price agreed upon between a willing buyer and willing seller, both having reasonable knowledge and neither being compelled to transact.

Question 3

A CGA preparing a damage appraisal for a ring that was broken during repair should base value on:

Accepted Answer

The difference in value before and after the damage

Answer

Damage appraisals measure diminution in value — the difference between the item's value in its undamaged state versus its damaged state.

Question 4

Which statement about retrospective appraisals is CORRECT?

Accepted Answer

They establish value as of a date in the past using market data from that time period

Answer

Retrospective appraisals establish value as of a past effective date using market conditions and data relevant to that historical period.

Question 5

In an insurance appraisal report, the term 'scheduling' refers to:

Accepted Answer

Listing specific items on an insurance policy with individual coverage limits

Answer

Scheduling means individually listing and insuring specific items on a policy, providing coverage up to the stated appraised value for each scheduled piece.

(CGA) Certified Gemologist Appraiser Practice Test

(CGA) Certified Gemologist Appraiser Practice Test

CGA Appraisal Methodology & Report Writing 2