The transom carries the engine on most outboard and sterndrive boats. On many it's a sandwich: fibreglass skins over a core of plywood or other material. Water gets into the core through every screw hole, the wood rots, and the transom starts to flex under the engine's thrust.
How a surveyor checks it
Sound it first. Soundings describes the test: tap with a hammer, and a wet area gives a deep, hollow sound and a weaker bounce. Its surveyor's line: "If you're hearing a deep thup, thup, thup, that's bad." Work in a grid so nothing's missed.
Look at the corners and round engine brackets, which Soundings names as the high-load areas. Darkly highlighted dirty cracks there may mean water is reaching the core. Check every fitting through the transom for failed sealant.
Then use the moisture meter on dry gelcoat to map the area, comparing with dry parts of the same transom. Finally load it: push the outboard up and down, or watch the transom with the engine in gear. Movement means the core has gone.
What decides the grade
Stiffness. A transom that flexes, or rotten core under the engine mounts, is an A. Wet core in a firm transom is a B, because it will soften. Slightly raised readings round one fitting are a C.