Assumption
A short, practical note on assumption, with the public definition from IVS / Red Book (effective 31 January 2025).
In my practice, an assumption is something I accept as true without verifying it, because the client and I agreed I would not — for example, that the title is clean or that there is no contamination. It must be consistent with the facts at the valuation date, reasonable and relevant to the purpose. Every significant assumption goes in the terms of engagement and in the report, so the reader knows exactly what the figure rests on and what to check if it matters.
“A supposition taken to be true. It involves facts, conditions or situations affecting the subject of, or approach to, a valuation that, by agreement, do not need to be verified by the valuer as part of the valuation process.”
Source: Red Book Global Standards, Part 2 Glossary («Assumption»)
“All significant assumptions must be reasonable under the circumstances, be supported by evidence and be relevant having regard to the intended use for which the valuation is required in order to provide an IVS-compliant valuation.”
Source: IVS 102 Bases of Value, para 50.04
Common confusion
Assumption ≠ special assumption: an assumption could be true at the date; a special assumption is known not to be.