ASTM E2135-10a(2017)

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.  
1.2 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

General Information

• Status: Historical
• Publication Date: 30-Apr-2017
• ICS: 01.040.97 - Domestic and commercial equipment. Entertainment. Sports (Vocabularies)
• Technical Committee: E53 - Asset Management
• Drafting Committee: E53.06 - Terminology

Relations

• Replaces: ASTM E2135-10ae2 - Standard Terminology for Property and Asset Management
• Effective Date: 01-May-2017
• Referred By: ASTM E2279-20 - Standard Practice for Establishing the Guiding Principles of Property Asset Management
• Effective Date: 01-May-2017
• Referred By: ASTM E2608-20 - Standard Practice for Equipment Control Matrix (ECM)
• Effective Date: 01-May-2017
• Referred By: ASTM E2605-13(2019) - Standard Practice for Receiving Assets
• Effective Date: 01-May-2017
• Referred By: ASTM E3341-22 - Standard Guide for General Principles of Resilience
• Effective Date: 01-May-2017
• Referred By: ASTM E2715-17 - Standard Practice for Moveable Property Storage
• Effective Date: 01-May-2017
• Referred By: ASTM E2672-16(2021) - Standard Practice for Identification and Categorization of Tooling
• Effective Date: 01-May-2017
• Referred By: ASTM E2453-19 - Standard Practice for Estimating the Life-Cycle Cost of Ownership of Property Assets
• Effective Date: 01-May-2017
• Referred By: ASTM E2936-20 - Standard Guide for Contractor Self-Assessment for U.S. Government Asset Management Systems
• Effective Date: 01-May-2017
• Referred By: ASTM E2499-18 - Standard Practice for Classification of Asset Location Information
• Effective Date: 01-May-2017
• Referred By: ASTM E2812-17 - Standard Practice for Uniform Data Management in Asset Management Records Systems
• Effective Date: 01-May-2017
• Referred By: ASTM E2631-20 - Standard Practice for Physical Placement of an Entity-Controlled Supplemental Identification Label
• Effective Date: 01-May-2017
• Referred By: ASTM E3173-18 - Standard Guide for Decommissioning and Disposal of Medical Equipment
• Effective Date: 01-May-2017
• Referred By: ASTM E2495-18 - Standard Practice for Prioritizing Asset Resources in Acquisition, Utilization, and Disposition
• Effective Date: 01-May-2017
• Referred By: ASTM E2606-18 - Standard Practice for Receipt Notification as a Result of Tangible Asset Movement
• Effective Date: 01-May-2017

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: E2135 − 10a (Reapproved 2017)
Standard Terminology for
Property and Asset Management
This standard is issued under the fixed designation E2135; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision.Anumber in parentheses indicates the year of last reapproval.A
superscript epsilon (´) indicates an editorial change since the last revision or reapproval.
1. Scope E2674Practice for Assessment of Impact of Mobile Data
Storage Device (MDSD) Loss (Withdrawn 2015)
1.1 This terminology covers traditional property manage-
E2675Practice for Property Management System Outcomes
mentdefinitionsandsomeofthetermsintroducedinadditional
E2811Practice for Management of Low Risk Property
asset management standards that are used most often and
(LRP)
considered most important. As new standards are developed,
E2812Practice for Uniform Data Management in Asset
newtermswillbeaddedtothisterminologyinfuturerevisions.
Management Records Systems
1.2 This international standard was developed in accor-
E2936Guide for Contractor SelfAssessment for U.S. Gov-
dance with internationally recognized principles on standard-
ernment Property Management Systems
ization established in the Decision on Principles for the
E2962Guide for Fleet Management
Development of International Standards, Guides and Recom-
E3015GuideforManagementofCustomer-OwnedProperty
mendations issued by the World Trade Organization Technical
Assets in Possession of Supplier, Contractor or Subcon-
Barriers to Trade (TBT) Committee.
tractor
2.2 Other Documents:
2. Referenced Documents
Auditing Standard No. 2AnAudit of Internal Control Over
2.1 ASTM Standards:
Financial Reporting Performed in Conjunction With an
E2221Practice for Administrative Control of Property
Audit of Financial Statements
(Withdrawn 2011)
Federal Acquisition Regulation (FAR) Part 45 Clause
E2306Practice for Disposal of Personal Property
52.245-1Government Property
E2452Practice for Equipment Management Process Matu- 6
GAO-12-331GGovernment Auditing Standards
rity (EMPM) Model
International Standard on Assurance Engagements (ISAE)
E2453Practice for Determining the Life-Cycle Cost of
3402Assurance Reports on Controls at a Service Organi-
Ownership of Personal Property 7
zation
E2495 Practice for Prioritizing Asset Resources in
OMB Circular A-123Management’s Responsibility for In-
Acquisition, Utilization, and Disposition 8
ternal Control
E2604Practice for Data Characteristics of EquipmentAsset
Record
3. Terminology
E2606Practice for Receipt Notification as a Result of
3.1 Terms and Definitions:
Tangible Asset Movement
E2607Practice for Cannibalization/Reclamation of Service-
abandon, v—to give up all and any future claim to rights or
ableEquipmentComponentstoSupportDemandRequire-
interest in property.
ments
abandoned property, n—property of any type over which the
E2608Practice for Equipment Control Matrix (ECM)
rightful owner has relinquished possession and any claim of
an ownership interest.
This terminology is under the jurisdiction of Committee E53 on Asset
Management and is the direct responsibility of Subcommittee E53.06 on Terminol-
ogy. Available from Public CompanyAccounting Oversight Board (PCAOB), 1666
Current edition approved May 1, 2017. Published May 2017. Originally K Street, NW, Washington, DC 20006-2803, http://www.pcaobus.org.
ɛ2
approved in 2001. Last previous edition approved in 2010 as E2135–10a . DOI: Available from U.S. General Services Administration (GSA), 1800 F Street,
10.1520/E2135-10AR17. NW Washington, DC 20405, http://www.gsa.gov/regulations.
2 6
For referenced ASTM standards, visit the ASTM website, www.astm.org, or Available from U.S. Government Publishing Office (GPO), 732 N. Capitol St.,
contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM NW, Washington, DC 20401-0001, http://www.gpo.gov.
Standards volume information, refer to the standard’s Document Summary page on Available from International Federation of Accountants (IFAC), 529 5th
the ASTM website. Avenue, New York, NY 10017, http://www.ifac.org.
3 8
The last approved version of this historical standard is referenced on Available from Office of Management and Budget (OMB), 725 17th Street,
www.astm.org. NW, Washington, DC 20503, http://www.whitehouse.gov/omb.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
E2135 − 10a (2017)
abatement, n—a reduction or cancellation of an assessed tax. accounting change, n—change in: (1) accounting principles
(such as a new depreciation method); (2) accounting esti-
ABC method, n—inventory management method that catego-
mates (such as a revised projection of doubtful accounts
rizes items in terms of importance. Thus, more emphasis is
receivable); or (3) the reporting entity (such as a merger of
placed on higher dollar value items (“A”s) than on lesser
companies). When an accounting change is made, appropri-
dollar value items (“B”s), while the least important items
ate footnote disclosure is required to explain its justification
(“C”s) receive the least time and attention. Inventory should
and financial effect, thereby enabling readers to make
be analyzed frequently when using the ABC method. The
appropriate investment and credit judgments. Proper justifi-
procedure for ABC analysis follows: (1) Separate finished
cation for a change in accounting principles may be the
goods into types (chairs of different models, and so on);
issuance of a new FASB pronouncement, SEC Accounting
separate raw materials into types (screws, nuts, and so on).
Series Release (ASR), or IRS regulation. Changes in esti-
(2) Calculate the annual dollar usage for each type of
mates are justified by changing circumstances such as a
inventory (multiply the unit cost by the expected future
greater degree of wear and tear of a fixed asset than
annual usage). (3) Rank each inventory type from highest to
originally anticipated. Generally, the consistent use of ac-
lowest, based on annual dollar usage. (4) Classify the
counting principles and procedures is essential in appraising
inventory as A—the top 20%; B—the next 30%; and
and entity’s activities and in the projection of future results;
C—the last 50% of dollars usage, respectively. (5) Tag the
however, changes in the reporting entity have to be retroac-
inventory with its appropriateABC classification and record
tively reflected for comparative purposes.
those classifications in the item inventory master records.
accretion, n—increase in economic worth through physical
abnormal spoilage, n—for government accounting under the
change,usuallysaidofanaturalresourcesuchasanorchard,
FAR, abnormal spoilage may or may not be allowable cost.
caused by natural growth. Contrast with appreciation.
If the cost is deemed allowable, the cost would normally be
charged consistently with normal spoilage.
accumulated depreciation, n—sum of depreciation charges
taken to date on a fixed asset.Accumulated depreciation is a
accelerated cost recovery system (ACRS), n—system of
contra account to the fixed asset to arrive at book value. For
depreciation for tax purposes mandated by the Economic
example, on 1/1/2000 an auto is bought costing $10000,
Recovery Act (ERA) of 1981 and modified by the Tax
with a salvage value of $1000 and a life of 10 years. Using
Reform Act of 1986. The type of property determines its
straight-line depreciation, the accumulated depreciation on
class. Instead of providing statutory tables, prescribed meth-
12/31/2003 would be $3600 ($900 × 4).
ods of depreciation are assigned to each class of property.
For 3, 5, 7, and 10-year classed, the relevant depreciation
acquired property, n—property under the possession or con-
method is the 200% declining balance method. For 15 and
trol of an entity that is not deemed “furnished property” and
20-year property, the appropriate method is the 150%
was acquired for business operation purposes. E3015
declining balance method switching to the straight-line
acquisition, n—hardware, supplies or services through
methodwhenitwillyieldalargerallowance.Forresidential
purchase, lease, or other means, including transfer or
rental property (27.5 years) and nonresidential real property
fabrication, whether the supplies or services are already in
(31.5 years), the applicable method is the straight-line
existence or must be created, developed, demonstrated, and
method. A taxpayer may make an irrevocable election to
evaluated. E2607
treat all property in one of the classes under the straight-line
method. Property is statutorily placed in one of the classes.
activity-based depreciation, n—production method of depre-
The purpose of ACRS is to encourage more capital invest-
ciation.
mentbybusinesses.Itpermitsafasterrecoveryoftheasset’s
costandthusprovideslargertaxbenefitsintheearlieryears. actual cash value, n—the cost of replacing damaged property
See also modified accelerated cost recovery systems
with other property of like kind and quality in the physical
(MACRS). condition of the property immediately before the damage.
accelerated depreciation, n—any method of calculating de-
actual cost, n—an amount determined on the basis of cost
preciation charges where the charges become progressively
incurred including standard cost properly adjusted for appli-
smaller each period
cable variance.
accessory item, n—an item that facilitates or enhances the
adjusted basis, n—the basis used to compute gain or loss on
operation of equipment but is not essential for its basic
disposition of an asset for tax purposes. Also, see book
operation.
value.
accountability, n—individualordepartmentalresponsibilityto
administratively controlled property, n—the property assets
perform a certain function. Accountability may be dictated
that are controlled at the discretion of asset managers
orimpliedbylaw,regulation,oragreement.Forexample,an
managing the inventories of individual operational units.
auditor will be held accountable to financial statement users
E2221
relying on the audited financial statements for failure to
uncover corporate fraud because of negligence in applying ad valorem tax—levy imposed on the value of property. The
generally accepted auditing standards (GAAS). most common ad valorem tax is that imposed by states,
E2135 − 10a (2017)
counties, and cities on real estate. Ad valorem taxes can, assessed value, n—value established by a government for real
however, be imposed on personal property. estate or other property as a basis for levying taxes. For
example, an individual receives a statement that, in the
agency-peculiar property, n—asusedinDoD,meansmilitary
judgment of the local tax assessor, the individual’s property
property and includes end items and integral components of
isworth$50000.Ifbylaw,propertiesinthisjurisdictionare
military weapons systems, along with the related peculiar
assessed at 80% of market value, the individual’s assessed
support equipment which is not readily available as a
value then is $40000 (80% of $50000) and property taxes
commercial item.
will be based on this assessed value.
allocate, v—to assign an item of cost, or a group of items of
asset, n—(1) anything owned having monetary value; (2)
cost, to one or more cost objectives.This term includes both
tangible or intangible items owned by an entity that have
direct assignment of cost and the reassignment of a share
probable economic benefits that can be obtained or con-
from an indirect cost pool.
trolled by the entity.
amortization, n—gradual reduction of an amount over time.
asset accountability unit, n—a tangible capital asset which is
Examples are amortized expenses on intangible assets and
acomponentofplantandequipmentthatiscapitalizedwhen
deferred charges.Assets with limited life have to be written
acquired or whose replacement is capitalized when the unit
down over the period benefited. For example, all intangible
is removed, transferred, sold, abandoned, demolished, or
assets must be amortized using the straight-line method not
otherwise disposed of.
exceeding 40 years; the amortization entry in that case is to
asset priority index (API), n—numericalvalueassignedtoan
debit amortization expense and credit the intangible asset.
asset reflecting its value to an entity’s mission or other
amortization, n—the gradual extinguishment of any amount
critical assignments as defined by the criteria set forth by
over a period of time through a systematic allocation of the
management. E2495
amount over a number of consecutive accounting periods
average age of inventory, n—number of days an average
such as the retirement of a debt by serial payments to a
inventory item takes to sell: For example, assume that
sinking fund.
average inventory is $47500 and cost of goods sold is
amortization, n—normally applies to intangibles whereas
$500 000. The average age of inventory is
depreciation applies to tangible assets.
($47500⁄$500000)×365days=34.7days.Seealso days to
sell inventory.AverageInventorydividedbyAverageAgeof
amortize, v—to write off a regular portion of an asset’s cost
Inventory = Cost of Goods Sold × 365 days.
over a fixed period of time. Examples are amortization
expense on an intangible asset and depletion expense on a
average inventory, n—amount equaling about half maximum
natural resource. See also sales return.
inventory when demand is relatively constant. For example,
if the maximum inventory is 500 units and depletion occurs
analytical hierarchy process (AHP), n—decision-making
at a fairly constant rate, the average inventory equals 250
model that reduces complex decisions to one on one com-
units (500/2).
parisons resulting in the ranking of a list of objectives or
alternatives. E2495
average life, n—estimated useful-life expectancy of a depre-
ciablegroupofassets.Seealso depreciation; economic life;
appraisal, n—the process of obtaining a valuation for an asset
useful life.
or liability that involves expert opinion rather than explicit
market transaction.
bailment, n—contractual transfer of dollars or personal prop-
ertyforaspecifiedobjective.Anexampleistheconsignment
appraisal method of depreciation, n—the periodic deprecia-
of goods from the consignor to consignee.Another example
tion charge is the difference between the beginning and
is a bank holding an asset of a borrower as collateral. In a
end-of-period appraised value of the asset if that difference
bailment,thedelivereriscalledthebailorandthereceiveris
is positive. If negative, there is no charge. Not generally
termed the bailee.
accepted.
bargain purchase, n—asset or goods acquired for materially
appreciation, n—increase in the value of an asset.
...

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.
´2
Designation: E2135 − 10a E2135 − 10a (Reapproved 2017)
Standard Terminology for
Property and Asset Management
This standard is issued under the fixed designation E2135; 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.
ε NOTE—Section 2 was updated and terms were placed in Section 3 editorially in July 2013.
ε NOTE—Section 2 was updated and terms were placed in Section 3 editorially in August 2016.
1. 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.
1.2 This international standard was developed in accordance with internationally recognized principles on standardization
established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued
by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
2. Referenced Documents
2.1 ASTM Standards:
E2221 Practice for Administrative Control of Property (Withdrawn 2011)
E2306 Practice for Disposal of Personal Property
E2452 Practice for Equipment Management Process Maturity (EMPM) Model
E2453 Practice for Determining the Life-Cycle Cost of Ownership of Personal Property
E2495 Practice for Prioritizing Asset Resources in Acquisition, Utilization, and Disposition
E2604 Practice for Data Characteristics of Equipment Asset Record
E2606 Practice for Receipt Notification as a Result of Tangible Asset Movement
E2607 Practice for Cannibalization/Reclamation of Serviceable Equipment Components to Support Demand Requirements
E2608 Practice for Equipment Control Matrix (ECM)
E2674 Practice for Assessment of Impact of Mobile Data Storage Device (MDSD) Loss (Withdrawn 2015)
E2675 Practice for Property Management System Outcomes
E2811 Practice for Management of Low Risk Property (LRP)
E2812 Practice for Uniform Data Management in Asset Management Records Systems
E2936 Guide for Contractor Self Assessment for U.S. Government Property Management Systems
E2962 Guide for Fleet Management
E3015 Guide for Management of Customer-Owned Property Assets in Possession of Supplier, Contractor or Subcontractor
2.2 Other Documents:
Auditing Standard No. 2 An Audit of Internal Control Over Financial Reporting Performed in Conjunction With an Audit of
Financial Statements
Federal Acquisition Regulation (FAR) Part 45 Clause 52.245-1 Government Property
GAO-12-331G Government Auditing Standards
International Standard on Assurance Engagements (ISAE) 3402 Assurance Reports on Controls at a Service Organization
This terminology is under the jurisdiction of Committee E53 on Asset Management and is the direct responsibility of Subcommittee E53.06 on Terminology.
Current edition approved Oct. 15, 2010May 1, 2017. Published November 2010May 2017. Originally approved in 2001. Last previous edition approved in 2010 as
ɛ1ɛ2
E2135 – 10a . DOI: 10.1520/E2135-10AE02.10.1520/E2135-10AR17.
For referenced ASTM standards, visit the ASTM website, www.astm.org, or contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM Standards
volume information, refer to the standard’sstandard’s Document Summary page on the ASTM website.
The last approved version of this historical standard is referenced on www.astm.org.
Available from Public Company Accounting Oversight Board (PCAOB), 1666 K Street, NW, Washington, DC 20006-2803, http://www.pcaobus.org.
Available from U.S. General Services Administration (GSA), 1800 F Street, NW Washington, DC 20405, http://www.gsa.gov/regulations.
Available from U.S. Government Publishing Office (GPO), 732 N. Capitol St., NW, Washington, DC 20401-0001, http://www.gpo.gov.
Available from International Federation of Accountants (IFAC), 529 5th Avenue, New York, NY 10017, http://www.ifac.org.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
E2135 − 10a (2017)
OMB Circular A-123 Management’s Responsibility for Internal Control
3. Terminology
3.1 Terms and Definitions:
abandon, v—to give up all and any future claim to rights or interest in property.
abandoned property, n—property of any type over which the rightful owner has relinquished possession and any claim of an
ownership interest.
abatement, n—a reduction or cancellation of an assessed tax.
ABC method, n—inventory management method that categorizes items in terms of importance. Thus, more emphasis is placed
on higher dollar value items (“A”s) than on lesser dollar value items (“B”s), while the least important items (“C”s) receive the
least time and attention. Inventory should be analyzed frequently when using the ABC method. The procedure for ABC analysis
follows: (1) Separate finished goods into types (chairs of different models, and so on); separate raw materials into types (screws,
nuts, and so on). (2) Calculate the annual dollar usage for each type of inventory (multiply the unit cost by the expected future
annual usage). (3) Rank each inventory type from highest to lowest, based on annual dollar usage. (4) Classify the inventory
as A—the top 20 %; B—the next 30 %; and C—the last 50 % of dollars usage, respectively. (5) Tag the inventory with its
appropriate ABC classification and record those classifications in the item inventory master records.
abnormal spoilage, n—for government accounting under the FAR, abnormal spoilage may or may not be allowable cost. If the
cost is deemed allowable, the cost would normally be charged consistently with normal spoilage.
accelerated cost recovery system (ACRS), n—system of depreciation for tax purposes mandated by the Economic Recovery Act
(ERA) of 1981 and modified by the Tax Reform Act of 1986. The type of property determines its class. Instead of providing
statutory tables, prescribed methods of depreciation are assigned to each class of property. For 3, 5, 7, and 10-year classed, the
relevant depreciation method is the 200 % declining balance method. For 15 and 20-year property, the appropriate method is the
150 % declining balance method switching to the straight-line method when it will yield a larger allowance. For residential rental
property (27.5 years) and nonresidential real property (31.5 years), the applicable method is the straight-line method. A taxpayer
may make an irrevocable election to treat all property in one of the classes under the straight-line method. Property is statutorily
placed in one of the classes. The purpose of ACRS is to encourage more capital investment by businesses. It permits a faster
recovery of the asset’s cost and thus provides larger tax benefits in the earlier years. See also modified accelerated cost recovery
systems (MACRS).
accelerated depreciation, n—any method of calculating depreciation charges where the charges become progressively smaller
each period
accessory item, n—an item that facilitates or enhances the operation of equipment but is not essential for its basic operation.
accountability, n—individual or departmental responsibility to perform a certain function. Accountability may be dictated or
implied by law, regulation, or agreement. For example, an auditor will be held accountable to financial statement users relying
on the audited financial statements for failure to uncover corporate fraud because of negligence in applying generally accepted
auditing standards (GAAS).
accounting change, n—change in: (1) accounting principles (such as a new depreciation method); (2) accounting estimates (such
as a revised projection of doubtful accounts receivable); or (3) the reporting entity (such as a merger of companies). When an
accounting change is made, appropriate footnote disclosure is required to explain its justification and financial effect, thereby
enabling readers to make appropriate investment and credit judgments. Proper justification for a change in accounting principles
may be the issuance of a new FASB pronouncement, SEC Accounting Series Release (ASR), or IRS regulation. Changes in
estimates are justified by changing circumstances such as a greater degree of wear and tear of a fixed asset than originally
anticipated. Generally, the consistent use of accounting principles and procedures is essential in appraising and entity’s activities
and in the projection of future results; however, changes in the reporting entity have to be retroactively reflected for comparative
purposes.
accretion, n—increase in economic worth through physical change, usually said of a natural resource such as an orchard, caused
by natural growth. Contrast with appreciation.
accumulated depreciation, n—sum of depreciation charges taken to date on a fixed asset. Accumulated depreciation is a contra
account to the fixed asset to arrive at book value. For example, on 1/1/2000 an auto is bought costing $10 000, with a salvage
value of $1000 and a life of 10 years. Using straight-line depreciation, the accumulated depreciation on 12/31/2003 would be
$3600 ($900 × 4).
Available from Office of Management and Budget (OMB), 725 17th Street, NW, Washington, DC 20503, http://www.whitehouse.gov/omb.
E2135 − 10a (2017)
acquired property, n—property under the possession or control of an entity that is not deemed “furnished property” and was
acquired for business operation purposes. E3015
acquisition, n—hardware, supplies or services through purchase, lease, or other means, including transfer or fabrication, whether
the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. E2607
activity-based depreciation, n—production method of depreciation.
actual cash value, n—the cost of replacing damaged property with other property of like kind and quality in the physical condition
of the property immediately before the damage.
actual cost, n—an amount determined on the basis of cost incurred including standard cost properly adjusted for applicable
variance.
adjusted basis, n—the basis used to compute gain or loss on disposition of an asset for tax purposes. Also, see book value.
administratively controlled property, n—the property assets that are controlled at the discretion of asset managers managing the
inventories of individual operational units. E2221
ad valorem tax—levy imposed on the value of property. The most common ad valorem tax is that imposed by states, counties,
and cities on real estate. Ad valorem taxes can, however, be imposed on personal property.
agency-peculiar property, n—as used in DoD, means military property and includes end items and integral components of
military weapons systems, along with the related peculiar support equipment which is not readily available as a commercial item.
allocate, v—to assign an item of cost, or a group of items of cost, to one or more cost objectives. This term includes both direct
assignment of cost and the reassignment of a share from an indirect cost pool.
amortization, n—gradual reduction of an amount over time. Examples are amortized expenses on intangible assets and deferred
charges. Assets with limited life have to be written down over the period benefited. For example, all intangible assets must be
amortized using the straight-line method not exceeding 40 years; the amortization entry in that case is to debit amortization
expense and credit the intangible asset.
amortization, n—the gradual extinguishment of any amount over a period of time through a systematic allocation of the amount
over a number of consecutive accounting periods such as the retirement of a debt by serial payments to a sinking fund.
amortization, n—normally applies to intangibles whereas depreciation applies to tangible assets.
amortize, v—to write off a regular portion of an asset’s cost over a fixed period of time. Examples are amortization expense on
an intangible asset and depletion expense on a natural resource. See also sales return.
analytical hierarchy process (AHP), n—decision-making model that reduces complex decisions to one on one comparisons
resulting in the ranking of a list of objectives or alternatives. E2495
appraisal, n—the process of obtaining a valuation for an asset or liability that involves expert opinion rather than explicit market
transaction.
appraisal method of depreciation, n—the periodic depreciation charge is the difference between the beginning and end-of-period
appraised value of the asset if that difference is positive. If negative, there is no charge. Not generally accepted.
appreciation, n—increase in the value of an asset. The asset may be real estate or a security. For example, an individual sold 100
shares of XYZ company’s stock for $105 per share that he bought 10 years ago for $25 per share. The amount of appreciation
was $8000 = ($105 − $25) × 100 shares.
assembly, n—a number of parts or subassemblies joined together.
assessed valuation, n—a dollar amount for real estate or other property used by a government as a basis for levying taxes. The
amount may or may not bear some relation to market value.
assessed value, n—value established by a government for real estate or other property as a basis for levying taxes. For example,
an individual receives a statement that, in the judgment of the local tax assessor, the individual’s property is worth $50 000. If
by law, properties in this jurisdiction are assessed at 80 % of market value, the individual’s assessed value then is $40 000 (80 %
of $50 000) and property taxes will be based on this assessed value.
asset, n—(1) anything owned having monetary value; (2) tangible or intangible items owned by an entity that have probable
economic benefits that can be obtained or controlled by the entity.
E2135 − 10a (2017)
asset accountability unit, n—a tangible capital asset which is a component of plant and equipment that is capitalized when
acquired or whose replacement is capitalized when the unit is removed, transferred, sold, abandoned, demolished, or otherwise
disposed of.
asset priority index (API), n—numerical value assigned to an asset reflecting its valu
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