1、Designation: E2378 05E2378 13Standard Practice forthe Recognition of Impaired or Retired Personal Property1This standard is issued under the fixed designation E2378; the number immediately following the designation indicates the year oforiginal adoption or, in the case of revision, the year of last
2、revision. A number in parentheses indicates the year of last reapproval. Asuperscript epsilon () indicates an editorial change since the last revision or reapproval.1. Scope1.1 This practice covers guidance as to the proper treatment for accounting and accountability purposes when items are stillret
3、ained, but need to be recognized as impaired or retired to administrative control. This practice is intended to be used inconjunction with Practice E2279, which provides various principles to improve the effectiveness and efficiency of the propertymanagement functions including functions. These incl
4、ude the concepts of materiality, best value, reasonable detail, and reasonableassurance. assurance and proper reporting. During the life cycle of property management, appropriate action must be taken at theappropriate time to be in conformance with these principles.The objective objective, on behalf
5、 of the owner, is to maintain propertyaccounting records that adequately represent the actual value of property. property and for accountability purposes apply theappropriate management and oversight.1.2 This practice covers the recognition of depreciation of personal property that is critical to a
6、fair representation of the entitysproperty and financial records. For instances when items for accounting or property management purposes may no longer servethe purpose that was originally intended, it may be more appropriate to recognize impairments or retire these items for recordkeeping purposes.
7、1.3 Generally, entities formally record, account, and inventory personal property that meet certain criteria, as defined by theentity, based upon acquisition cost thresholds, expendability, or useful life polices.policies. Accordingly, entities should establishrecurring depreciation cycles so that t
8、he property eligible for depreciation is fairly and consistently recorded in anthe entitysrecords in accordance with generally accepted accounting standards.principles.1.4 The percentage and frequency of depreciation is dependent on such factors as the nature of owned property, its useful life,and t
9、he frequency of property use in support of business-type activities of the entity.1.5 This standardpractice covers accepted practice as to of proper record keeping actions when items are fully depreciated foraccounting purposes and should be retired from the accounting as well as property management
10、 purposes when the asset no longerserves the purpose that was intended but still remains on the entities premises or continues to be under some form of control.1.6 Entities have a responsibility under their internal controls to operate effectively, efficiently, and in a reasonable andresponsible man
11、ner and to provide stakeholders best value as provided in public law, regulations and generally accepted accountingpractices.1.7 This standard is limited to property management functions. This standard does not purport to address tax concerns, if any,associated with its use. It is the responsibility
12、 of the user of this standard to establish appropriate internal tax guidelines and todetermine the applicability of regulatory or statutory requirements prior to use.2. Referenced Documents2.1 ASTM Standards:2E2135 Terminology for Property and Asset ManagementE2219 Practice for Valuation and Managem
13、ent of Moveable, Durable Property (Withdrawn 2009)3E2279 Practice for Establishing the Guiding Principles of Property Management2.2 GAO Document:3GAO Government Auditing Standards (The Yellow Book) 20111 This practice is under the jurisdiction of ASTM Committee E53 on PropertyAsset Management System
14、s and is the direct responsibility of Subcommittee E53.03 onFinancial Management.Current edition approved July 1, 2005July 15, 2013. Published July 2005July 2013. Originally approved in 2005. Last previous edition approved in 2005 as E237805.DOI: 10.1520/E2378-05.10.1520/E2378-13.2 For referencedAST
15、M standards, visit theASTM website, www.astm.org, or contactASTM Customer Service at serviceastm.org. For Annual Book of ASTM Standardsvolume information, refer to the standards Document Summary page on the ASTM website.3 The last approved version of this historical standard is referenced on www.ast
16、m.org.Available from the U. S. Government Accountability Office (GAO), 441 G St., NW,Washington, DC 20548, http:/www.gao.gov.This document is not an ASTM standard and is intended only to provide the user of an ASTM standard an indication of what changes have been made to the previous version. Becaus
17、eit may not be technically possible to adequately depict all changes accurately, ASTM recommends that users consult prior editions as appropriate. In all cases only the current versionof the standard as published by ASTM is to be considered the official document.Copyright ASTM International, 100 Bar
18、r Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States13. Terminology3.1 Definitions: For definitions relating to Property and Asset Management, refer to Terminology E2135.3.2 Definitions of Terms Specific to This Standard Standard:3.2.1 abuse, nAbuse involves behavior that is
19、deficient or improper when compared with behavior that a prudent personwould consider reasonable and necessary business practice given the facts and circumstances. Abuse also includes misuse ofauthority or position for personal financial interests or those of an immediate or close family member or b
20、usiness associate.Abusedoes not necessarily involve fraud or noncompliance with provisions of laws, regulations, contracts or grant agreements. (Fromthe GAO Yellow Book, 2011.)3.2.2 administratively controlled items, nitems not requiring formal property control and accountability by propertymanageme
21、nt and accounting functions.3.2.3 accountability, nthe concept of accountability of resources and authority is fundamental to an entitys governing andmanagement processes. Management and officials entrusted with public and private resources are responsible for carrying outpublic and private function
22、s and providing service to the public and owners effectively, efficiently, economically, ethically, andequitably within the context of their given situationas reflected in applicable laws, regulations, agreements, standards, andinternal policy and direction. Management and officials are responsible
23、for providing reliable, useful, and timely information asneeded. (Adapted from the GAO Yellow Book, 2011.)3.2.3.1 DiscussionEffective, efficient and economical efforts include assessments of cost and benefits of requirements and actions.3.2.4 internal control, nan organizations system of internal co
24、ntrols that are designed to provide reasonable assurance ofachieving effective and efficient operations, reliable financial and performance reporting and compliance with applicable laws andregulations. (Adapted from the GAO Yellow Book, 2011.)4. Summary of Practice4.1 Entities should implement prope
25、rty management systems in accordance with Practice E2279.4.2 Property recorded in the entitys formal property system should be depreciated based upon internal or external standards.4.3 The net book value of items should be fairly represented and this includes the recognition of impairments as they o
26、ccur.Property management personnel have a vital role in the process of recognition of impairments.4.4 Because the actual drop in value of each asset may be difficult and time-consuming to compute, a standardized depreciationprocess may be used by entities to approximate depreciations. For example, o
27、ne process assumes that an asset depreciates by anequal percentage of its original acquisition value for each year that it is used resulting in the same deduction amount every year.Another process may assume that an asset depreciates at a larger rate in the first years and a much smaller depreciatio
28、n in lateryears.4.5 Irrespective of the depreciation method used, depreciation at some time stops. At this point, unless the item is identified asa sensitive item or perpetual control is necessary for other reasons, the status of the item may change from an accountable to anadministratively controll
29、ed item. If no accountability threshold is used by the organization, depreciation and accountability maycontinue as appropriate and at the discretion of the organization. This is especially appropriate when there has been a change inaccounting or property management thresholds, the item no longer se
30、rves the purpose as originally intended (it is retained forpurposes or causes such as salvage, standby, incidental use, unreasonable removal cost, and so forth) or operating costcosts (recordkeeping, insurance cost, inventory cost, and maintenance cost, and so forth) exceed the probable future benef
31、its provided by theitem. Identification tags may or may not be required to be removed from administratively controlled items, as determined bymanagement.4.6 Asset management and other personnel with operating knowledge of assets shall assist owners, management, andaccounting functions in the identif
32、ication of impaired items per entity policies.5. Significance and Use5.1 Improves property accountability including avoiding abuse. Systematic depreciation of property generally serves to providea fair presentation of an entitys property and financial records for decision makers. Keeping fully depre
33、ciated items on the assetrecords and property management records when they no longer are used as originally intended may be misleading to decisionmakers and may result in excessive operating cost. Retiring items to administrative control when appropriate improves theefficiency, lowers operating cost
34、 without significantly reducing internal controls.6. Recognition of Impaired or Retired Personal Property6.1 An entity has the discretion to set appropriate administrative, accountability or capitalization thresholds or both all threebased on factors unique to the entity.E2378 1326.2 Acquired proper
35、ty that is valued above an entitys accountability threshold and, if applicable, sensitive property, should berecorded to the organizations formal property accountability system. At the time of recordation, the recorded value of procuredproperty is usually based on its original acquisition value (OAV
36、). The OAV, although useful data that should be retained in theformal property records through the life of the asset, it should not be used as the sole value whenfor accounting, reporting, andreconciling inventory results. Property acquired via means other than procurement is usually recorded at a v
37、alue based on its fairmarket value. Most property assets will lose value over time because of wear and tear, or other factors. Periodic depreciation takesinto account all of these factors.6.3 Generally, property recorded toin a formal property accountability system is controlled and inventoried for
38、as long as theproperty remains onin the entitys property system. Property is periodically dropped from an entitys formal records as a result ofsuch actions as transfers, losses, consumption, disassembly, and,and for the purposepurposes of this practice, depreciation.6.4 Entities should only expend t
39、ime and resources to control and inventory property that supports the mission of theorganization or for other factors important to the owning entity. To accomplish this, a procedure should be established to assesseach property item or groups of items recorded on a formal property system periodically
40、 to ensure that values are adjusted basedon such factors as depreciation and, if warranted, appreciation. warranted (and is an allowable accounting practice), appreciation.6.5 The percentage and frequency of property depreciation is at the discretion of an entity and based primarily on the importanc
41、eof the property item to the mission of the organization.6.6 Practice E2219 defines three types of property that an organization may own:6.6.1 Type Aproperty anticipated to be necessary to generate profit or accomplish an entitys mission,6.6.2 Type Bproperty not anticipated to be necessary to genera
42、te profit or accomplish a mission, and6.6.3 Type Cproperty that poses a potential safety or environmental hazard.6.7 Accordingly, for Type B property, an entity may elect to initiate an across-the-board fixed annual depreciation rate, whereasTypes A and C property that are directly associated with p
43、rofit generation or mission success may be depreciated less frequentlyand at a lower rate. Sensitive property, as defined by an entity, is depreciated but may remain on the formal property recordsbecause of safety or security concerns.6.6 The process of depreciation will eventually result in most ac
44、countable property items falling below the entitys prescribedaccountability threshold. At this point, property managers may transition the status of the property from accountable toadministratively controlled thus saving time and resources that would otherwise be expended if the property remained ac
45、countable.7. Summary7.1 The objective of this practice is to ensure that the value recorded in an entitys property and financial records fairly reflectthe value of each recorded property item.7.2 Review of records is necessary to avoid unintentional and excessive operating cost in that the presence
46、of records in ofthemselves drives cost.8. Keywords8.1 abuse; accountability; depreciation; fair market value; internal controls; property; threshold;thresholds; valuationvaluationsASTM International takes no position respecting the validity of any patent rights asserted in connection with any item m
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