ASTM E2378-13
(Practice)Standard Practice for the Recognition of Impaired or Retired Personal Property
Standard Practice for the Recognition of Impaired or Retired Personal Property
SIGNIFICANCE AND USE
5.1 Improves property accountability including avoiding abuse. Systematic depreciation of property generally serves to provide a fair presentation of an entity’s property and financial records for decision makers. Keeping fully depreciated items on the asset records and property management records when they no longer are used as originally intended may be misleading to decision makers and may result in excessive operating cost. Retiring items to administrative control when appropriate improves the efficiency, lowers operating cost without significantly reducing internal controls.
SCOPE
1.1 This practice covers guidance as to the proper treatment for accounting and accountability purposes when items are still retained, but need to be recognized as impaired or retired to administrative control. This practice is intended to be used in conjunction with Practice E2279, which provides various principles to improve the effectiveness and efficiency of the property management functions. These include the concepts of materiality, best value, reasonable detail, and reasonable assurance and proper reporting. During the life cycle of property management, appropriate action must be taken at the appropriate time to be in conformance with these principles. The objective, on behalf of the owner, is to maintain property accounting records that adequately represent the actual value of property and for accountability purposes apply the appropriate management and oversight.
1.2 This practice covers the recognition of depreciation of personal property that is critical to a fair representation of the entity’s property and financial records. For instances when items for accounting or property management purposes may no longer serve the purpose that was originally intended, it may be more appropriate to recognize impairments or retire these items for record keeping purposes.
1.3 Generally, entities formally record, account, and inventory personal property that meet certain criteria, as defined by the entity, based upon acquisition cost thresholds, expendability, or useful life policies. Accordingly, entities should establish recurring depreciation cycles so that the property eligible for depreciation is fairly and consistently recorded in the entity’s records in accordance with generally accepted accounting principles.
1.4 The percentage and frequency of depreciation is dependent on such factors as the nature of owned property, its useful life, and the frequency of property use in support of business-type activities of the entity.
1.5 This practice covers accepted practice of proper record keeping actions when items are fully depreciated for accounting purposes and should be retired from the accounting as well as property management purposes when the asset no longer serves 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 and responsible manner to provide stakeholders best value as provided in public law, regulations and generally accepted accounting practices.
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 of the user of this standard to establish appropriate internal tax guidelines and to determine the applicability of regulatory or statutory requirements prior to use.
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Designation: E2378 − 13
Standard Practice for
1
the Recognition of Impaired or Retired Personal Property
This standard is issued under the fixed designation E2378; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope 1.5 This practice covers accepted practice of proper record
keeping actions when items are fully depreciated for account-
1.1 This practice covers guidance as to the proper treatment
ing purposes and should be retired from the accounting as well
for accounting and accountability purposes when items are still
as property management purposes when the asset no longer
retained, but need to be recognized as impaired or retired to
serves the purpose that was intended but still remains on the
administrative control. This practice is intended to be used in
entities premises or continues to be under some form of
conjunction with Practice E2279, which provides various
control.
principles to improve the effectiveness and efficiency of the
1.6 Entities have a responsibility under their internal con-
property management functions. These include the concepts of
trols to operate effectively, efficiently, and in a reasonable and
materiality, best value, reasonable detail, and reasonable assur-
responsible manner to provide stakeholders best value as
ance and proper reporting. During the life cycle of property
provided in public law, regulations and generally accepted
management, appropriate action must be taken at the appropri-
accounting practices.
ate time to be in conformance with these principles. The
objective, on behalf of the owner, is to maintain property
1.7 This standard is limited to property management func-
accountingrecordsthatadequatelyrepresenttheactualvalueof
tions. This standard does not purport to address tax concerns,
property and for accountability purposes apply the appropriate
if any, associated with its use. It is the responsibility of the user
management and oversight.
of this standard to establish appropriate internal tax guidelines
and to determine the applicability of regulatory or statutory
1.2 This practice covers the recognition of depreciation of
requirements prior to use.
personal property that is critical to a fair representation of the
entity’s property and financial records. For instances when
2. Referenced Documents
itemsforaccountingorpropertymanagementpurposesmayno
2
2.1 ASTM Standards:
longerservethepurposethatwasoriginallyintended,itmaybe
E2135 Terminology for Property and Asset Management
moreappropriatetorecognizeimpairmentsorretiretheseitems
E2279 Practice for Establishing the Guiding Principles of
for record keeping purposes.
Property Management
1.3 Generally, entities formally record, account, and inven- 3
2.2 GAO Document:
tory personal property that meet certain criteria, as defined by
GAO Government Auditing Standards (The Yellow Book)
the entity, based upon acquisition cost thresholds,
2011
expendability, or useful life policies. Accordingly, entities
should establish recurring depreciation cycles so that the
3. Terminology
property eligible for depreciation is fairly and consistently
3.1 Definitions: For definitions relating to Property and
recorded in the entity’s records in accordance with generally
Asset Management, refer to Terminology E2135.
accepted accounting principles.
3.2 Definitions of Terms Specific to This Standard:
3.2.1 abuse, n—Abuse involves behavior that is deficient or
1.4 The percentage and frequency of depreciation is depen-
improper when compared with behavior that a prudent person
dent on such factors as the nature of owned property, its useful
would consider reasonable and necessary business practice
life, and the frequency of property use in support of business-
given the facts and circumstances.Abuse also includes misuse
type activities of the entity.
of authority or position for personal financial interests or those
1 2
This practice is under the jurisdiction of ASTM Committee E53 on Asset For referenced ASTM standards, visit the ASTM website, www.astm.org, or
Management and is the direct responsibility of Subcommittee E53.03 on Financial contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM
Management. Standards volume information, refer to the standard’s Document Summary page on
Current edition approved July 15, 2013. Published July 2013. Originally the ASTM website.
3
approved in 2005. Last previous edition approved in 2005 as E2378–05. DOI: Available from the U. S. GovernmentAccountability Office (GAO), 441 G St.,
10.1520/E2378-13. NW, Washington, DC 20548, http://www.gao.gov.
Copyright © ASTM Internatio
...
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. Because
it 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 version
of the standard as published by ASTM is to be considered the official document.
Designation: E2378 − 05 E2378 − 13
Standard Practice for
1
the Recognition of Impaired or Retired Personal Property
This standard is issued under the fixed designation E2378; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope
1.1 This practice covers guidance as to the proper treatment for accounting and accountability purposes when items are still
retained, but need to be recognized as impaired or retired to administrative control. This practice is intended to be used in
conjunction with Practice E2279, which provides various principles to improve the effectiveness and efficiency of the property
management functions including functions. These include the concepts of materiality, best value, reasonable detail, and reasonable
assurance. assurance and proper reporting. During the life cycle of property management, appropriate action must be taken at the
appropriate time to be in conformance with these principles. The objective objective, on behalf of the owner, is to maintain property
accounting records that adequately represent the actual value of property. property and for accountability purposes apply the
appropriate management and oversight.
1.2 This practice covers the recognition of depreciation of personal property that is critical to a fair representation of the entity’s
property and financial records. For instances when items for accounting or property management purposes may no longer serve
the purpose that was originally intended, it may be more appropriate to recognize impairments or retire these items for record
keeping purposes.
1.3 Generally, entities formally record, account, and inventory personal property that meet certain criteria, as defined by the
entity, based upon acquisition cost thresholds, expendability, or useful life polices.policies. Accordingly, entities should establish
recurring depreciation cycles so that the property eligible for depreciation is fairly and consistently recorded in anthe entity’s
records 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 the 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 for
accounting purposes and should be retired from the accounting as well as property management purposes when the asset no longer
serves 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 and
responsible manner and to provide stakeholders best value as provided in public law, regulations and generally accepted accounting
practices.
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 of the user of this standard to establish appropriate internal tax guidelines and to
determine the applicability of regulatory or statutory requirements prior to use.
2. Referenced Documents
2
2.1 ASTM Standards:
E2135 Terminology for Property and Asset Management
3
E2219 Practice for Valuation and Management of Moveable, Durable Property (Withdrawn 2009)
E2279 Practice for Establishing the Guiding Principles of Property Management
3
2.2 GAO Document:
GAO Government Auditing Standards (The Yellow Book) 2011
1
This practice is under the jurisdiction of ASTM Committee E53 on PropertyAsset Management Systems and is the direct responsibility of Subcommittee E53.03 on
Financial Management.
Current edition approved July 1, 2005July 15, 2013. Published July 2005July 2013. Originally approved in 2005. Last previous edition approved in 2005 as E2378–05.
DOI: 10.1520/E2378-05.10.1520/E2378-13.
2
For referenced ASTM standards, visit the ASTM website, www.astm.org, or contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM Standards
volume information, refer to the standard’s Document Summary page on the ASTM website.
3
The last approved version of this historical standard is referenced on ww
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