In our dojo Sensei hands out a form we fill in when he feels we're ready for testing. It's from Aikikai Honbu (I don't know if other aikikai-affiliated dojos use the same form so please forgive me if this is old information). On it there's a section marked "Method" (or similar) which has two choices:
o Testing
o Observation
So it looks like our grades can be awarded by observation alone, rather than by testing. I haven't seen it happen yet, though, and I don't know how often (if ever) it does...
-drin
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