ASTM E2135-02

Standard Terminology for Property and Asset Management

SCOPE
1.1 This terminology covers traditional property management definitions and some of the terms introduced in additional asset management standards that are used most often and considered most important. As new standards are developed, new terms will be added to this terminology in future revisions.

General Information

• Status: Historical
• Publication Date: 09-Aug-2002
• ICS: 01.040.97 - Domestic and commercial equipment. Entertainment. Sports (Vocabularies)
• Technical Committee: E53 - Asset Management
• Drafting Committee: E53.06 - Terminology

Relations

• Replaces: ASTM E2135-01 - Standard Terminology for Property and Asset Management
• Effective Date: 10-Aug-2002
• Replaced By: ASTM E2135-04 - Standard Terminology for Property and Asset Management
• Effective Date: 01-Sep-2004
• Referred By: ASTM E2608-20 - Standard Practice for Equipment Control Matrix (ECM)
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2631-20 - Standard Practice for Physical Placement of an Entity-Controlled Supplemental Identification Label
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2607-21 - Standard Practice for Cannibalization/Reclamation of Serviceable Equipment Components to Support Demand Requirements
• Effective Date: 10-Aug-2002
• Referred By: ASTM E3257-21 - Standard Practice for Asset Taxonomy
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2279-20 - Standard Practice for Establishing the Guiding Principles of Property Asset Management
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2675-22 - Standard Practice for Asset Management System Outcomes
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2812-17 - Standard Practice for Uniform Data Management in Asset Management Records Systems
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2378-19 - Standard Practice for the Recognition of Impaired or Retired Property Assets
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2811-17 - Standard Practice for Management of Low Risk Property (LRP)
• Effective Date: 10-Aug-2002
• Referred By: ASTM E3221-19 - Standard Guide for Motorized Equipment
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2708-21a - Standard Terminology for Accreditation and Certification
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2132-17 - Standard Practice for Inventory Verification: Electronic and Physical Inventory of Assets
• Effective Date: 10-Aug-2002
• Referred By: ASTM E2936-20 - Standard Guide for Contractor Self-Assessment for U.S. Government Asset Management Systems
• Effective Date: 10-Aug-2002

Standards Content (Sample)

NOTICE: This standard has either been superseded and replaced by a new version or withdrawn.
Contact ASTM International (www.astm.org) for the latest information
Designation: E 2135 – 02
Standard Terminology for
1
Property and Asset Management
This standard is issued under the fixed designation E 2135; 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 (e) indicates an editorial change since the last revision or reapproval.
1. Scope inventory with its appropriate ABC classification and record
those classifications in the item inventory master records.
1.1 This terminology covers traditional property manage-
abnormal spoilage—for government accounting under the
ment definitions and some of the terms introduced in additional
FAR, abnormal spoilage may or may not be allowable cost.
asset management standards that are used most often and
If the cost is deemed allowable, the cost would normally be
considered most important. As new standards are developed,
charged consistently with normal spoilage.
new terms will be added to this terminology in future revisions.
accelerated cost recovery system (ACRS)—system of depre-
2. Terminology ciation for tax purposes mandated by the Economic Recov-
ery Act (ERA) of 1981 and modified by the Tax Reform Act
2.1 Terms and Definitions:
of 1986. The type of property determines its class. Instead of
abandoned property—property of any type over which the
providing statutory tables, prescribed methods of deprecia-
rightful owner has relinquished possession and any claim of
tion are assigned to each class of property. For 3, 5, 7, and
an ownership interest, without assertion of an adverse right
10 year classed, the relevant depreciation method is the
to possession and control by the federal government. This
200 % declining balance method. For 15 and 20 year
would include property left at a government facility and
property, the appropriate method is the 150 % declining
unclaimed by the rightful owner following notice of intent to
balance method switching to the straight-line method when
dispose. This property is a type of seized property.
it will yield a larger allowance. For residential rental
abandonment—voluntary surrender of property, owned or
property (27.5 years) and nonresidential real property (31.5
leased, without naming a successor as owner or tenant. The
years), the applicable method is the straight-line method. A
property will generally revert to a person holding a prior
taxpayer may make an irrevocable election to treat all
interest or, in cases where no owner is apparent, to the state.
property in one of the classes under the straight-line method.
abatement—a reduction or cancellation of an assessed tax.
Property is statutorily placed in one of the classes. The
ABC method—inventory management method that catego-
purpose of ACRS is to encourage more capital investment by
rizes items in terms of importance. Thus, more emphasis is
businesses. It permits a faster recovery of the asset’s cost and
placed on higher dollar value items (“A”s) than on lesser
thus provides larger tax benefits in the earlier years. See also
dollar value items (“B”s), while the least important items
modified accelerated cost recovery systems (MACRS).
(“C”s) receive the least time and attention. Inventory should
accelerated depreciation—any method of calculating depre-
be analyzed frequently when using the ABC method. The
ciation charges where the charges become progressively
procedure for ABC analysis follows: (1) Separate finished
smaller each period. Examples are double-declining-balance
goods into types (chairs of different models, and so on);
and sum-of-the-years’-digits methods.
separate raw materials into types (screws, nuts, and so on).
accelerated depreciation—method recognizing higher
(2) Calculate the annual dollar usage for each type of
amounts of depreciation in the earlier years and lower
inventory (multiply the unit cost by the expected future
amounts in the later years of a fixed asset’s life. Some
annual usage). (3) Rank each inventory type from highest to
machines, for example, are more efficient early on and
lowest, based on annual dollar usage. (4) Classify the
generate greater service potential; matching dictates higher
inventory as A—the top 20 %; B—the next 30 %; and
depreciation expense in those years. Over time, depreciation
C—the last 50 % of dollars usage, respectively. (5) Tag the
expense moves in downward direction and maintenance
costs tend to become higher; thus the effect of accelerated
depreciation is fairly even charges to income. Greatest tax
1
This terminology is under the jurisdiction of Committee E53 on Property and
benefits from depreciation are enjoyed in the earlier years.
Asset Management and is the direct responsibility of Subcommittee E53.02 on Data
Management. (Examples include double decli
...