concurring in part and dissenting in part:
I basically agree with the Court’s opinion, except for portions of part II.A.2, regarding the extra-sehedular rating. Specifically, I disagree with the majority’s conclusion that the Board of Veterans’ Appeals (BVA or Board) lacked authority to award an extra-schedular rating in the first instance but rather was required to refer that matter to *99the agency of original jurisdiction (AOJ).1 My reasons are similar to those in the Secretary’s August 30,1994, memorandum. Moreover, I believe the Court has reached out to decide this issue in dictum, and, in any event, has decided it prematurely.
A. Regulatory Interpretation
It is essential to consider the full text of the regulatory provision in question, 38 C.F.R. § 3.321(b)(1), which provides:
(b) Exceptional cases — (1) Compensation. Ratings shall be based as far as practicable, upon the average impairments of earning capacity with the additional proviso that the Secretary shall from time to time readjust this schedule of ratings in accordance with experience. To accord justice, therefore, to the exceptional case where the schedular evaluations are found to be inadequate, the Chief Benefits Director or the Director, Compensation and Pension Service, upon field station submission, is authorized to approve on the basis of the criteria set forth in this paragraph an extra-schedular evaluation commensurate with the average earning capacity impairment due exclusively to the service-connected disability or disabilities. The governing norm in these exceptional cases is: A finding that the case presents such an exceptional or unusual disability picture with such related factors as marked interference with employment or frequent periods of hospitalization as to render impractical the application of the regular schedular standards.
38 C.F.R. § 3.321(b)(1) (1995) (emphasis added).
At the outset, I acknowledge that the regulation is not totally clear insofar as the Board’s authority to award an extra-schedu-lar rating in the first instance. However, there is no doubt that all the adjudication regulations in part 3 of title 38 of the Code of Federal Regulations generally apply to the BVA in its adjudication of cases, even where a particular regulation does not specifically refer to the Board. See Douglas v. Derwinski, 2 Vet.App. 435 (1992) (en banc) (“the plain language of the statutory and regulatory provisions at issue demonstrates that Congress and [the Department of Veterans Affairs (VA) ] have ‘envisioned’ a [Board] bound by the regulations that bind the entire Department”, id. at 441). Of course, an exception to this general rule would be where a particular regulation expressly excluded the BVA. That is not the case here.
The regulation in question is broadly titled “Exceptional cases”, 38 C.F.R. § 3.321(b). In its first sentence it establishes the basic principle for all ratings: “Ratings shall be based as far as practicable, upon the average impairments of earning capacity ....” The Board is unquestionably governed by this basic rating principle.2 The next sentence is the particular provision at issue here. It states that the VA Chief Benefits Director *100(CBD) and the VA Director of the Compensation and Pension (C & P) Service have authority to evaluate the exceptional cases “upon field station submission”. That sentence does two things: First, it authorizes the CBD or the C & P Service Director to award an extra-schedular rating; and, second, it forbids a VA regional office (RO) from doing so. The majority reads' the sentence, incorrectly, as being an exclusive delegation to the named officials and therefore an implicit denial of that authority to the Board. The concluding sentence of the regulation then explains how an exceptional case is to be recognized — in terms of an “unusual disability picture with such related factors as marked interference with employment or frequent periods of hospitalization as to render impractical the application of the regular schedular standards.” 38 C.F.R. § 3.321(b)(1).
I can find no reason for concluding that the Board is not authorized to apply the first and third sentences of the regulation to provide, in the first instance, an extra-schedular rating where the criteria for such a rating are satisfied. Indeed, subject to the holding in Bernard v. Brown, discussed in note 9, infra, I believe that the Board is bound to do so when those circumstances are present. The regulatory scheme, as well as the statutory scheme addressed in part B, infra, does not support the majority’s conclusion that the Secretary has, by inference, limited the plenary adjudicative authority of the Board. Echoing the Board’s statutory grant of authority in 38 U.S.C. § 7104(a), the Secretary has provided in regulation that the Board has jurisdiction to decide “[a]ll questions of law and fact necessary to a decision ... under a [VA-administered] law”, specifically “[e]nti-tlement to, and benefits resulting from, service-connected disability or death (38 U.S.C. chapter 11)”. 38 C.F.R. § 20.101(a), (a)(1) (1995). That is, of course the very benefit involved in the instant case.
The Secretary has made broad delegations of authority both to the Board Chairman (and Vice Chairman) “in addition to authority vested by law ... regulations and manuals”, to authorize “assumption of appellate jurisdiction of adjudicative determination which has not become final” as well as to the CBD and supervisory or adjudicative personnel within VA’s Veterans Benefits Administration to make “findings and decisions under applicable laws, regulations, precedents, and instructions, as to entitlement of claimants to benefits under all [VA-administered] laws”. 38 C.F.R. §§ 2.66, 2.67 (1995) (emphasis added). However, whereas the CBD and the Veterans Benefits Administration have no direct statutory base of adjudicative authority, receiving all authority from the Secretary, the BVA, as the Secretary’s delegation clearly recognizes in the emphasized language, has an independent statutory base of authority, which the Secretary has no authority to limit. (That matter is discussed in part B., below.) In contrast, the Secretary can limit the adjudicative authority of the CBD and Veterans Benefits Administration personnel and has done so in the second sentence of § 3.321(b) as to the award of extra-schedular ratings3 by authorizing the CBD or the C & P Service Director to act as the AOJ when such a case is referred to the VA Central Office (VACO) by a field station.4
In view of the Board’s separate jurisdictional statutory base, I believe that any limitations on the BVA’s jurisdiction sought to be imposed by the Secretary by regulation would need to be express or at least clearly indicated and certainly should not be found by implication. Cf. 38 C.F.R. § 20.101(b) (1995) (specifically identifying types of medical determinations that are not adjudicative matters and “are beyond the Board’s jurisdiction”); Darrow v. Derwinski, 2 Vet.App. 303, 305-06 (1992) (holding that Board lacks jurisdiction to review exercise of Secretary’s unfettered discretionary authority under 38 U.S.C. § 503(a) to award equitable -relief in order to remedy “administrative error”).
*101Moreover, the majority ignores the question of affording deference to the Secretary’s interpretation of his own regulations. This interpretative principle was the linchpin of the Court’s recent reconsideration opinion in Tallman v. Brown, 7 Vet.App. 453, 463-65 (1995), appeal filed, No. 96-7006 (Fed.Cir. October 20, 1995). See also Combee v. Principi, 4 Vet.App. 78, 91 (1993), rev’d on other grounds, 34 F.3d 1039 (1994). Given the reasonableness of the Secretary’s interpretation of his own delegations and procedural regulations dealing with internal allocations of responsibility within the Department, that interpretation is entitled to considerable deference in this Court.
As a matter of regulatory interpretation, binding precedent of the U.S. Court of Appeals for the Federal Circuit contradicts the majority’s conclusion (ante at 96) that the Secretary’s regulatory silence on whether the BVA must, as clearly AOJs must, refer the extra-schedular question to the VACO should be construed as imposing a limit on the BVA’s authority. First, the Federal Circuit has expressly concluded that the same canons of construction that apply to statutes apply to regulations. See Smith (William) v. Brown, 35 F.3d 1516, 1523 (Fed.Cir.1994). In Smith, the Federal Circuit articulated a very strong adherence to “[t]he canon of expressio unius est exclusio alterius (‘the expression of one thing implies the exclusion of others’)”. Id. at 1524. The court there applied that canon in determining that the regulatory reference to AOJs in 38 C.F.R. § 3.104(a) does not also include the BVA in the absence of express reference to the Board. Ibid. That is exactly the situation before us in the instant ease where the regulation specifically delegates authority to the CBD and the C & P Director “upon field station submission” only. 38 C.F.R. § 3.321(b). Hence, the limitation on field station authority in § 3.321(b) does not limit the Board’s plenary jurisdiction.
Additionally, the Federal Circuit’s opinion in Gardner v. Brown rejecting the Secretary’s position therein did so in part on the ground that Congress had not expressly required the veteran to prove VA fault and had shown that it knew well “how to legislate expressly liability for fault and negligence.” Gardner, 5 F.3d 1456, 1459 (Fed.Cir.1993), aff'd, — U.S. -, 115 S.Ct. 552, 130 L.Ed.2d 462 (1994). Most tellingly, in Skinner v. Brown, over a pointed dissent, the Federal Circuit noted that Congress had specifically referred to three different sections of the Social Security Act (SSA) in the Re-' stored Entitlement Program for Survivors (REPS) statute, that such “express reference ... shows that Congress well knew how to incorporate the provisions of the [SSA]” and that “[i]f it had similarly intended to incorporate [other SSA sections into REPS], we presume it would have done so expressly.” Skinner, 27 F.3d 1571, 1574 (Fed.Cir.1994). Similarly, if the Secretary had wished to limit the Board’s plenary jurisdiction, he could and should have done so expressly (assuming the statutory authority to do so).5 Accordingly, the majority’s construction of the regulation in this case conflicts fundamentally with the Federal Circuit’s guidance on construction of statutory and regulatory provisions.
B. Statutory Interpretation
The majority suggests that its holding as to the meaning of § 3.321(b)(1) is “supported by the statute”; the majority cites 38 U.S.C. § 7104(a) and emphasizes the sentence requiring the Board to base its decisions on “applicable provisions of law and regulation”. Ante at 95. Of course, that statutory language provides no support whatsoever for the Court’s misinterpretation of § 3.321(b)(1) and is entirely tautological. The question of the regulation’s meaning still remains.6
*102On the question of the effect of the statute, there is no statutory basis for concluding that the Board cannot award an extra-sche-dular rating as part of the appeal to it of an increased-rating claim. To begin with, the concept of extra-schedular ratings is entirely extra-statutory; it derives solely from the Secretary’s general regulation-issuing authority pursuant to 38 U.S.C. § 1155 (direction to Secretary to establish rating schedule “based, as far as practicable, upon the average impairments of earning capacity”) and § 501(a) (general authority for Secretary to prescribe regulations necessary or appropriate to carry out VA-administered laws that are consistent therewith).7 With respect to increased-rating claims, a claimant presenting such a claim is presumed to be seeking the highest possible rating. See AB v. Brown, 6 Vet.App. 35, 38 (1993). The Court has repeatedly held that the Board is required to consider a claim under all applicable provisions of law and regulation whether or not the claimant specifically raises the applicable provision.8 Therefore, the Board was obligated in this case to consider § 3.321(b)(1) as part of the veteran’s claim for an increased rating.
That brings us to the holding in Bernard v. Brown not discussed by the majority (except in response to the ensuing discussion).9 In Bernard, the Court held that “the Board’s jurisdiction is limited to deciding questions in ‘appeals’ of ‘a matter which under section [511(a) ] of this title is subject to decision by the Secretary’ and which has been the subject of a decision by an AOJ.” Bernard, 4 Vet.App. 384, 391 (1993). In determining the Board’s jurisdiction under 38 U.S.C. § 7104(a), the Court in Bernard concluded that on a claim to reopen under 38 U.S.C. § 5108 the new-and-material evidence question and the merits question (steps one and two under Manio v. Derwinski, 1 Vet.App. 140, 145 (1991)) “relate to a single claim of entitlement to VA benefits” and “are components of a single ‘decision by the Secretary under a law that affects the provision of benefits by the Secretary’, as referred to in section 511(a)”. Bernard, 4 Vet.App. at 392. Bernard held that the Board had “appellate jurisdiction to review the veteran’s claim of entitlement to benefits under section 1110” and had authority “to decide all questions presented on the record before it that were necessary to its decision on that matter.” Ibid.10 Thus, even though the RO had denied reopening the claim because it had found that new and material evidence had not been submitted and, therefore, the RO had not issued a decision on the merits of the claim, the Court held that the Board had jurisdiction to review the claim on the merits and that the “Board’s inquiry was, therefore, not limited to the specific questions actually decided by the RO.” Ibid.
Applying this holding from Bernard to the present facts, the Court should now hold that the question of an extra-schedular rating is a component of the veteran’s claim for an increased rating and thus is part of the same “matter” over which the Board has jurisdic*103tion under 38 U.S.C. § 7104(a) in the increased-rating case appealed to it. Indeed, the majority seems to concede this by stating that “the extra-schedular rating issue is always part of the same claim” (presumably meaning a claim for an increased rating), but then finds Bernard, inapposite because it did not address § 3.321(b). Ante at 96-97. Of course, Bernard did not decide the precise issue before the Court in the instant case. The question is whether the majority’s holding here is consistent with what the Court' held in Bernard as to the Board’s section 7104(a) jurisdiction. I believe it is not.11 The language of section 7104(a) requiring the Board to base its decisions on applicable provisions of law and regulations could not detract from the adjudicatory jurisdiction granted to the BVA by law, and the majority’s holding conflicts with this statutory delineation of the Board’s authority.
C. Advisory Opinion and Premature Adjudication
Finally, the Court reaches out to rule on whether the Board has authority to decide, in the first instance, the extra-schedular-rating question when resolution of that issue is not necessary to the disposition of this appeal. It is unnecessary because the majority is upholding the Board’s award of a 10% extra-schedular rating and because the Board’s error in failing to apply Bernard warrants a remand and moots the question because we do not know whether the Board would proceed to award the extra-schedular rating itself without referral to the AO J if it were first to comply with Bernard.
Although the Court declares that it “hold[sj” that the Board is precluded from awarding an extra-sehedular rating in the first instance, ante at 94, no amount of saying so makes it so; rather, the Court has digressed into an area of analysis that is pure dictum — an advisory opinion — on the question of the Board’s authority. A holding as to the Board’s lack of authority would compel the Court to direct the Secretary to withdraw the 10% rating that it awarded. Instead, the Court has concluded that because the veteran was not prejudiced by the award, it must affirm the Board’s decision granting the extra-schedular rating. Ante at 97. The majority fails to explain (1) how it can proceed to affirm the Board’s award after it has concluded that the Board erred in not abiding by the Bernard requirements to ensure due process; (2) how an award of a 10% extra-schedular rating cures any prejudice caused by the Board’s failure to apply Bernard and consequent failure to afford the appellant the opportunity to submit to the AOJ evidence or argument on the extra-schedular-rating issue; and (3) its authority for allowing to stand the Board’s award of a 10% rating (that is, by not declaring the award to be invalid), given the majority’s conclusion that the Board had no authority to award such a rating and that such action was in contravention of the Secretary’s own regulations.
*104Moreover, by contorting itself to avoid vacating the Board’s decision on the extra-schedular-rating issue in this case so as not to take the unprecedented action of stripping away the 10% additional rating that the Board had awarded on an extra-schedular basis in its May 1992 decision (see Green (John) v. Brown, 5 Vet.App. 83, 84-85 (1998) (per curiam order) (Kramer, J., dissenting from denial of en banc review)), the Court has rendered advisory in nature its entire analysis regarding the Board’s putative lack of authority to award such a rating in the first instance. That is because it makes no difference to the majority’s outcome, as to whether the extra-schedular rating awarded by the Board is permitted to stand, which interpretation of 38 C.P.R. § 3.321(b), as to the authority of the Board to award such a rating in the first instance, is applied. See U.S. Term Limits, Inc. v. Thornton, — U.S. -, - — , 115 S.Ct. 1842, 1851-52, 131 L.Ed.2d 881 (1995) (conclusion in prior opinion was a holding where it was “integral to [the Court’s] analysis and outcome”); United States v. Crawley, 837 F.2d 291, 292 (7th Cir.1988) (distinguishing between holding and dictum in terms of whether particular conclusion is based on facts of ca'se and is “essential to the outcome”); McLaughlin v. Bradlee, 803 F.2d 1197, 1204 (D.C.Cir.1986) (determination of issues which are “necessary to the outcome of the first action” forms basis of holding in that action with respect to those issues and is not “mere dictum” (quoting Parklane Hosiery Co. v. Shore, 439 U.S. 322, 331, 99 S.Ct. 645, 651, 58 L.Ed.2d 552 (1979), and Safir v. Dole, 718 F.2d 475, 482 (D.C.Cir.1983))).
In view of the appellant’s having argued to the Court, in his December 12, 1994, memorandum, that the Board has no authority to make initial extra-schedular-rating determinations not previously addressed by the AOJ and that, in any event, the appellant should be given the opportunity to build a record before the AOJ on the extra-schedular-rating question before that question is decided in the first instance, it seems quite likely that if this matter were to be remanded for the Board to apply Bernard to this case, the Board would decide to allow the veteran to build such a record and present the case first to the AOJ. Such action by the Board would moot the question that the Court has extended itself to decide unnecessarily at this time — that is, whether the Board had authority to award the rating in the first instance. Hence, the Court should face this issue only if action by the Board on remand would require it to face that issue.
Finally, having affirmed the Board’s grant of an extra-schedular rating in this case, the majority then goes on to state: “If the Board does proceed in compliance with the correct regulatory procedures and the appellant then continues to appeal the extra-schedular rating aspect of this claim, the Board will be required to articulate its findings of fact and sufficient reasons or bases thereupon on the extra-schedular consideration issue.” Ante at 96-97. Given the majority’s affirmance of the rating, it is unclear how the Board is to “proceed in compliance” with any regulation or how the appellant can “eontinue[ ] to appeal” the.rating. The majority has not remanded the extra-schedular-rating issue under Bernard, as it should do, and so there is no basis on which the Board can proceed unless it decides sua sponte to reconsider the increased-rating claim after issuance of the Court’s mandate. The Court’s affirmance of the Board’s 10% rating otherwise brings this particular rating-increase claim to a close.
For the foregoing reasons, I respectfully dissent to the extent I have indicated above.
. In this case, no explicit Notice of Disagreement (NOD) was filed as to the question of an extras-chedular rating, and that question was not addressed by the Department of Veterans Affairs (VA) regional office (RO) in its December 1989 decision. See Veterans' Judicial Review Act, Pub.L. No. 100-687, 102 Stat. 4105, 4122, § 402 (found at 38 U.S.C. § 7251 note); 38 U.S.C. § 7105; see generally Hamilton v. Brown, 4 Vet.App. 528 (1993) (en banc), aff'd, 39 F.3d 1574 (Fed.Cir.1994). However, the February 1990 NOD (which did not itself expressly raise the § 3.321(b) extraschedular-rating question but said that the veteran's "service[-]connected jaw condition is more severe than the 10 percent you have assigned”, Record (R.) at 329) gives the Board of Veterans’ Appeals (BVA or Board), in the first instance, jurisdiction to decide the merits of the extraschedular-rating question and the Court jurisdiction to review such decision because the extraschedular-rating question was subsumed within the original increased-rating claim submitted by the veteran in August 1989. It is precisely on that basis that the Court in West v. Brown held that the NOD filed as to the RO’s denial of service connection was also an NOD as to the rating and effective-date matters which the RO had never addressed. West, 7 Vet.App. 329, 331 (1995) (en banc). In Isenbart v. Brown, the Court expressly validated an NOD as to an issue (total disability based on individual unemploya-bility) that the RO should have but did not address when it denied a claim for an increased rating. Isenbart, 7 Vet.App. 537, 541 (1995), reconsid. and en banc review den., 8 Vet.App. 147 (1995).
. See Fisher v. Brown, 4 Vet.App. 405, 407 (1993) (per curiam order) (Steinberg, J., concurring) (as to authority of Board to review or, in the first instance, adjudicate claims for special derivative individual unemployability benefits under 38 C.F.R. § 4.16(b)).
. See Fisher, 4 Vet.App. at 407 n. 2.
. See Malgapo v. Derwinski, 1 Vet.App. 397, 399 (1991) (quoting 38 U.S.C. § 7105(b)(1) in defining agency of original jurisdiction (AOJ) as "any [VA] activity ... 'which entered the determination with which disagreement is expressed' ”), overruled in part on other grounds, Hamilton, 4 Vet.App. at 538, 38 C.F.R. § 20.3(a) (1995).
. See infra note 11.
. The majority’s circular analysis extends to citation of another, regulation, 38 C.F.R. § 19.9 (1995), to "support[ ]" its interpretation that the Board is precluded from awarding an extra-sche-dular rating in the first instance. Ante at 95-96. That regulation provides no such support since the question remains whether or not, under § 19.9, there was a "procedural defect” that needs to be corrected "for a proper appellate decision”. 38 C.F.R. § 19.9. That the Board is required to remand to the AOJ in certain cases to correct certain procedural defects does not assist in determining whether there is a defect in a particular case (or, indeed, whether it is "procedural”).
. See Johnson (Gary) v. Brown, 7 Vet.App. 95, 99 (1994); Butts v. Brown, 5 Vet.App. 532, 539 (1993) (en banc); see also Talley v. Derwinski, 2 Vet.App. 282, 287-88 (1992).
. See, e.g., Douglas v. Derwinski, 2 Vet.App. 435, 440 (1992) (en banc); Douglas v. Derwinski, 2 Vet.App. 103, 109 (1992); Schafrath v. Derwinski, 1 Vet.App. 589, 592-93 (1991); Akles v. Derwinski, 1 Vet.App. 118, 121 (1991); Payne v. Derwinski, 1 Vet.App. 85, 87 (1990).
. I agree with the majority that the other holding of Bernard, (that a claimant be given adequate notice of the need to submit evidence or argument on a question so as to ensure that his or her rights to "full and fair assistance and adjudication in the VA claims adjudication process” are protected) requires the Board to consider the procedural requirements and possible prejudice to the claimant of deciding the issue based on the evidence before the Board and that the Board erred in not considering such prejudice here before it awarded the 10% extra-schedular rating, Bernard v. Brown, 4 Vet.App. 384, 392-93 (1993). Ante at 96. However, as discussed in part C, infra, I believe that a remand is required to address the prejudice issue and that on remand the Board would be required to correct deficiencies in its statement of reasons or bases (under 38 U.S.C. § 7104(d)(1)) on this point. In doing so, the Board should also be required to address how it determined that an extra-schedu-lar rating of 10%, rather than some other percentage, was appropriate. R. at 10.
.This language, drawn from 38 U.S.C. § 7104(a), is echoed in regulation in 38 C.F.R. § 20.101(a) (1995).
. Given the Board's broad statutory jurisdiction to decide all matters in a claim appealed to it from an adverse decision by a VA field station, it might even be questioned whether the Secretary would have the authority, absent Bernard-type prejudice to the claimant (see supra note 9), to preclude the BVA from awarding an extra-sche-dular rating in the exercise of its jurisdiction over a case appealed to it under 38 U.S.C. § 7104(a). Of course, the majority might respond that what it is holding is only that the BVA cannot award the extra-schedular rating in the first instance. Nonetheless, if the Board's statutory jurisdiction in 38 U.S.C. § 7104(a) extends to this issue as part of the increased-rating-claim "matter", then even such a "first instance” limitation might be in conflict with the statute. This analysis illustrates why no such limitation should be inferred by the Court in the absence of some clear indication by the Secretary of an intent to impose it and why it is important that deference be accorded to the Secretary's reasonable interpretation of his own regulatory scheme (see supra part A). Of course, here the Secretary takes the position that the regulation "is a delegation of the Secretary’s authority to render initial adjudications under section 511(a)” and "does not require the BVA, in adjudicating a claim on appeal under 38 U.S.C. § 7104(a), to seek approval from the [Chief Benefits Director] or C & P [Service] Director of the Board's determinations with respect to extra-schedular ratings”, and "[w]hile a delegation of authority was considered necessary to establish the [Chief Benefits Director] and the C & P Director to approve extra-schedular ratings in initial adjudicative decisions, no delegation of authority is necessary to establish the BVA’s jurisdiction to review such decisions, because the BVA’s authority to review all initial decisions on claims for VA benefits is provided for by statute.” Secretary’s Memorandum at 5-6, 3.