This is the original page. The revised page is being worked on at User:KTrimble/Sandbox/Extraordinary Assumptions and Hypothetical Conditions
A hypothetical condition is an assumption which is contrary to what exists but is supposed or assumed for the purpose of discussion or analysis.
Hypothetical conditions assume facts or conditions which are known to be contrary to known facts, whether about
Hypothetical conditions are distinguished from extraordinary assumptions which are assumptions made also for the purpose of discussion or analysis, but regarding facts or conditions which are merely uncertain or undetermined.
The distinction between hypothetical conditions and extraordinary assumptions can carry a legal consequence and are most important in analytical fields where calculations or representations of professional opinions based on such assumptions are communicated by a professional to a client or end user, such as through an attest function.
Examples of hypothetical conditions used in the course of analysis might include
Examples of extraordinary assumptions used in the course of analysis might include
The main example where the distinction between extraordinary assumptions and hypothetical conditions can be a matter of law or professional standards include the field of real estate appraisal where the distinction is codified in USPAP in the United States (although the concept is clearly applicable to all forms of valuation).
Under USPAP, a real estate appraisal may be predicated on extraordinary assumptions under certain conditions, including proper disclosure and description of the assumption on which results are based to the client and third parties. The use of any hypothetical conditions, in contrast, is considered professionally inappropriate unless the use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison. The purpose of the distinction is to avoid the communication of assignment results based on conditions contrary to facts which might mislead third party users of the results into believing the existence of conditions contrary to known facts.
This is the original page. The revised page is being worked on at User:KTrimble/Sandbox/Extraordinary Assumptions and Hypothetical Conditions
A hypothetical condition is an assumption which is contrary to what exists but is supposed or assumed for the purpose of discussion or analysis.
Hypothetical conditions assume facts or conditions which are known to be contrary to known facts, whether about
Hypothetical conditions are distinguished from extraordinary assumptions which are assumptions made also for the purpose of discussion or analysis, but regarding facts or conditions which are merely uncertain or undetermined.
The distinction between hypothetical conditions and extraordinary assumptions can carry a legal consequence and are most important in analytical fields where calculations or representations of professional opinions based on such assumptions are communicated by a professional to a client or end user, such as through an attest function.
Examples of hypothetical conditions used in the course of analysis might include
Examples of extraordinary assumptions used in the course of analysis might include
The main example where the distinction between extraordinary assumptions and hypothetical conditions can be a matter of law or professional standards include the field of real estate appraisal where the distinction is codified in USPAP in the United States (although the concept is clearly applicable to all forms of valuation).
Under USPAP, a real estate appraisal may be predicated on extraordinary assumptions under certain conditions, including proper disclosure and description of the assumption on which results are based to the client and third parties. The use of any hypothetical conditions, in contrast, is considered professionally inappropriate unless the use of the hypothetical condition is clearly required for legal purposes, for purposes of reasonable analysis, or for purposes of comparison. The purpose of the distinction is to avoid the communication of assignment results based on conditions contrary to facts which might mislead third party users of the results into believing the existence of conditions contrary to known facts.