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FOGHORN
USPAP, developed by the Appraisal Standards Board of 
The Appraisal Foundation, sets the ethical and perfor-
mance standards for appraisers across the United States. 
For personal property like marine vessels, Standards 7 
(development) and 8 (reporting) govern the process. These 
ensure appraisals are objective, transparent, well-docu-
mented, and free from misleading statements. ASA, a lead-
ing multi-discipline professional organization, requires 
its members—particularly those holding the prestigious 
accredited senior appraiser (ASA) designation in machin-
ery and technical specialties (MTS)—to adhere to USPAP 
while applying specialized knowledge in marine assets.
The banking industry typically requires ASA certification 
on all vessel appraisals used for lending decisions. This stems 
from auditing, risk management, and regulatory needs. 
Banks rely on these standards to ensure collateral values are 
reliable for loan-to-value calculations, minimizing exposure 
in volatile markets. Non-compliant or experience-based 
opinions lacking methodological rigor are often rejected.
THE THREE APPROACHES TO VALUE:
USPAP Requirements
USPAP Standards Rule 7-4 mandates that appraisers analyze 
all three traditional approaches to value for credibility: the 
sales comparison (market) approach, the income approach, 
and the cost approach. The appraiser must develop each as ap-
plicable or explain why one or more were excluded. The final 
opinion often reconciles a weighted combination, with the 
most relevant approach given primary emphasis depending 
on the vessel, market data, and intended use of the appraisal.
This framework applies directly to passenger vessels, which 
blend commercial utility with specialized features like pas-
senger capacity, safety systems, dining facilities, and enter-
tainment spaces.
1. Sales Comparison (Market) Approach
This approach is often primary for passenger vessels with 
active secondary markets. It estimates value by comparing 
the subject vessel to recent sales or listings of similar vessels, 
making adjustments for differences in age, size, condition, 
capacity, propulsion, amenities, and location.
For a typical 150-passenger dinner cruise vessel or short-
route ferry, appraisers typically gather data on comparable 
sales through brokers, industry databases, public records, 
and networks. Adjustments might account for:
• Physical characteristics: Length overall (LOA),  
beam, draft, passenger capacity, deck configurations, 
and ADA compliance.
• Condition and maintenance: Recent dry-docking,  
engine overhauls, hull coatings, and compliance with U.S. 
Coast Guard standards or Subchapter T/K requirements.
• Economic and locational factors: Operating region 
(e.g., inland rivers vs. coastal), route profitability, and 
seasonal demand.
• Equipment and upgrades: Modern navigation,  
propulsion efficiency (e.g., hybrid or LNG), Wi-Fi, 
HVAC, and accessibility features.
In practice, true identical comparables are rare for passen-
ger vessels due to custom builds. A 10-year-old catamaran 
ferry might be adjusted against a similar monohull or new-
er build. Market data in the passenger sector can be thinner 
than for tugs or barges, requiring broader adjustments and 
reconciliation with other approaches.
Challenges in today’s market include post-pandemic recov-
ery, supply chain effects on newbuild costs, and decarbon-
ization pressures. A vessel compliant with emerging emis-
sions rules (e.g., IMO or local low-sulfur/EPA standards) 
may command a premium. Appraisers must document all 
adjustments transparently per USPAP to allow intended 
users (e.g., lenders or buyers) to understand the reasoning.
The banking industry  
typically requires ASA 
certification on all vessel 
appraisals used for lending 
decisions. This stems from 
auditing, risk management, 
and regulatory needs. 
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