Gempact Valuation
Diamond Grading is based on the Gemological Institute of America Natural Diamond Grading Scale, comprised of four aspects: Cut, Color, Clarity and Carat Weight.
Cut Grading analyzes the proportions and finish (Polish: quality of the surface of the stone and Symmetry, exactness of facet alignment) of round brilliant cut diamonds. Fancy Shapes, including princess, oval, emerald, heart, pear, cushion and all others, are graded according to symmetry, shape appeal, length to width ratio, and other considerations. Cut Grading, Polish and Symmetry are broken down into five sub categories:
Excellent
Very Good
Good
Fair
Poor
Diamond Color Grading is a process to determine the degree of color present, or more specifically, its absence in normal color diamonds. The scale is divided into an alphabetical grade from D to Z: Colorless, Near-Colorless, Faint, Very Light and Light, usually yellow or brown. Fancy Color Diamonds are more intensely saturated than the normal diamond color range, and are separated by degree of saturation, tone and hue.
Diamond Clarity Grading is performed under 10X magnification, determining the position, nature, size, visibility and number of inclusions, or flaws either from formation or treatment, within the stone; or with the exceptional case of the highest clarity grades, on the stone’s surface.
Flawless: No internal or external clarity characteristics under 10X
Internally Flawless (IF): No significant internal characteristics under 10X
Very Very Slightly Included (VVS1 and VVS2): Minute internal characteristics under 10X
Very Slightly Included (VS1 and VS2): Minor internal characteristics under 10X
Slightly Included (SI1 and SI2): Noticeable internal characteristics under 10X
Included (I1, I2 and I3): Obvious internal characteristics under 10X that may affect transparency and durability
Carat Weight is either determined by using a scale for loose stones, or using mathematical formulas based on measurements, proportions and weight correction factors for mounted stones. One Carat is equivalent to 0.2 grams, and is divided into one hundred points.
Diamond Fluorescence occurs in approximately ten to thirty percent of natural diamonds, usually blue but occasionally other colors, the result of diamond electrons activated by ultraviolet light releasing visible light when excited to higher orbit. The impact on a diamond’s face up appearance can be negligible if Faint or Medium, but can be significant if Strong or Very Strong. Colorless diamonds with strong fluorescence may appear cloudy or hazy, which may impact a stone’s value at a discount, while a faint to light normal color diamond (approximately J to Z color) with significant blue fluorescence may appear more colorless face up, and trade at less of a discount than its non-fluorescent equivalent.
Natural versus Synthetic Diamond separations can be complex, involving specialized machinery and advanced techniques. Currently, I use an ultraviolet light absorption screener which can separate Type Ia and Type IIa colorless diamonds. Ninety-eight percent of natural colorless diamonds happen to be Type Ia, and less than two percent of natural colorless diamonds are Type IIa. Currently, one hundred percent of synthetic manufactured colorless diamonds are Type IIa. While a natural versus synthetic call is limited by the technology used to detect it, as well as the experience level of the person interpreting the results, it can be definitive for many uses.
Diamond treatments and enhancements such as laser drilling, internal laser drilling and fracture filling are present within the trade and are detectable under magnification. Additional advanced enhancement techniques such as High Pressure High Temperature (HPHT) treatment and/or irradiation can alter inclusions and the stone’s body color, the detection of which is not always precise. Advanced laboratory analysis can conclusively determine treatments.
Natural Colored Stone Treatments are often disclosed in the market, but not always, though there are treatments considered standard to various gemstone species, and thus are assumed treated to acceptable degrees. Common color and clarity enhancements include low temperature or high temperature heating with or without chemical diffusion, fissure filling with lead-glass, oil, resin, dye, etc. as well as irradiation and other proprietary methods. Rubies are often heated, diffused and/or fissure-filled with a glass based material. Sapphires of all colors can be heated and diffused. Emeralds are often included, and these fissures or fractures are filled in with oil or resin materials, sometimes including dyes. Other Gemstones including Jadeite Jade, Pearls, Opals, Synthetic/Lab-Grown stones and other precious and semi-precious gems can and often are subject to additional enhancements.
Diamonds are valued according to the quality factors and terminology established by the trade, emphasizing diamond cut, the factor impacting a diamond's face up appearance most. Colored gemstone grading emphasizes color significantly more than the other factors. While factors such as cutting quality and clarity characteristics do have an integral affect on face up appearance, colored stone grading is less stringent than diamond grading. All other factors being equal, carat size will determine within what price level a given stone will be.
The Uniform Standards of Professional Appraisal Practice (USPAP) represents the generally accepted and recognized standards adopted and updated by The Appraisal Foundation since 1987, setting the Congressionally authorized standards for real estate appraisers and voluntarily compliant personal property appraisers.
Approaches to valuation include the cost approach, the sales comparison approach and the income approach (rarely used in personal property). Cost Approach involves determining the dollar amount required to reproduce an item new, less applicable depreciation. Sales Comparison Approach ascertains the amount of money that changed hands in the appropriate market for items of similar nature, quality or provenance. Income Approach determines the amount of money a property will produce as income from sale or lease over a certain time period. At times, accurate valuation requires a combination of approaches.