ASTM E2453-19

Standard Practice for Estimating the Life-Cycle Cost of Ownership of Property Assets

SIGNIFICANCE AND USE
5.1 For agencies and institutions, measuring and managing the LCC of ownership of property may directly result in improved accountability, in the form of cost savings, increased asset utilization, extended asset life, and increased mission effectiveness.  
5.2 For companies, measuring and managing the LCC of ownership of property may directly result in cost savings, increased asset utilization, and, therefore, improved profit margins.  
5.3 Including LCC in the three stages is consistent with Practice E2279 under the reporting principle.
SCOPE
1.1 This practice covers the establishment of a process consensus model for determining the life-cycle cost (LCC) of property assets owned or used by an entity.  
1.1.1 For businesses, these property assets are required to seek to achieve financial returns from producing and selling goods or services, or both.  
1.1.2 For institutions and agencies, these property assets are required to accomplish their primary mission.  
1.2 Real and personal property assets may include capital (fixed) assets and movable assets including customer-supplied assets, rental/leased assets, contract/project direct-purchased assets, or expense items.  
1.3 Asset service lives can be divided into three distinct stages, each with several separate yet interrelated substages: acquisition, utilization, and disposition. These primary stages are not intended to be all-encompassing but are offered as the basis for establishing LCC.  
1.4 This practice is expected to be primarily used for considering the life-cycle cost of personal property, however, the concept can and should be used for various types of assets including personal, real, tangible, and intangible.  
1.5 This practice does not supersede applicable generally accepted accounting principles but is intended to be consistent with the accounting principles particularly in the area of internal controls (see the GAO Green Book) and processes and requirements for estimating. Some life-cycle cost estimating may be required for accounting purposes. (See AS 2501.)  
1.6 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and to determine the applicability of regulatory limitations prior to use.  
1.7 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: Published
• Publication Date: 30-Apr-2019
• ICS: 03.100.10 - Purchasing. Procurement. Logistics
• Technical Committee: E53 - Asset Management
• Drafting Committee: E53.03 - Financial Aspects Asset Management

Relations

• Replaces: ASTM E2453-13 - Standard Practice for Determining the Life-Cycle Cost of Ownership of Personal Property
• Effective Date: 01-May-2019
• Refers: ASTM E2135-10a(2017) - Standard Terminology for Property and Asset Management
• Effective Date: 01-May-2017
• Refers: ASTM E2279-15 - Standard Practice for Establishing the Guiding Principles of Property Asset Management
• Effective Date: 01-Jan-2015
• Refers: ASTM E2135-10ae1 - Standard Terminology for Property and Asset Management
• Effective Date: 15-Oct-2010
• Refers: ASTM E2135-10ae2 - Standard Terminology for Property and Asset Management
• Effective Date: 15-Oct-2010
• Refers: ASTM E2135-10a - Standard Terminology for Property and Asset Management
• Effective Date: 15-Oct-2010
• Refers: ASTM E2135-10 - Standard Terminology for Property and Asset Management
• Effective Date: 01-Jul-2010
• Refers: ASTM E2279-09 - Standard Practice for Establishing the Guiding Principles of Property Management
• Effective Date: 01-Aug-2009
• Refers: ASTM E2135-07e1 - Standard Terminology for Property and Asset Management
• Effective Date: 15-Jun-2007
• Refers: ASTM E2135-07 - Standard Terminology for Property and Asset Management
• Effective Date: 15-Jun-2007
• Refers: ASTM E2135-06 - Standard Terminology for Property and Asset Management
• Effective Date: 15-Feb-2006
• Refers: ASTM E2135-04 - Standard Terminology for Property and Asset Management
• Effective Date: 01-Sep-2004
• Refers: ASTM E2279-03 - Standard Practice for Establishing the Guiding Principles of Property Management
• Effective Date: 10-May-2003
• Refers: ASTM E2135-02 - Standard Terminology for Property and Asset Management
• Effective Date: 10-Aug-2002
• Refers: ASTM E2135-01 - Standard Terminology for Property and Asset Management
• Effective Date: 10-Feb-2001

Overview

ASTM E2453-19: Standard Practice for Estimating the Life-Cycle Cost of Ownership of Property Assets provides a consensus-based methodology designed to help organizations effectively determine the total cost of ownership (TCO), also referred to as life-cycle cost (LCC), for property assets. Developed by ASTM International, this standard is relevant to a broad range of asset types – including real, personal, tangible, and intangible property – and is applicable across industries, institutions, agencies, and businesses seeking to enhance asset management, financial stewardship, and operational decision-making.

The primary goal of ASTM E2453-19 is to go beyond the traditional focus on acquisition costs, providing a comprehensive approach for assessing the full spectrum of costs associated with assets throughout their entire service life: from acquisition, through utilization, to disposition. Better understanding and management of asset life-cycle costs can result in significant cost savings, increased asset utilization, longer asset service life, and improved financial and mission outcomes.

Key Topics

• Life-Cycle Cost (LCC) Methodology:

  • Establishes a structured process for calculating and summing all known material costs associated with property assets.
  • Incorporates acquisition, utilization, and disposition stages to reveal the true cost of asset ownership.

• Comprehensive Asset Inclusion:

  • Applies to various types of property assets: capital (fixed) assets, customer-supplied assets, rental/leased assets, and direct-purchased assets.
  • Addresses both tangible (equipment, vehicles, facilities) and intangible (software, licenses) property.

• Internal Control and Consistency:

  • Designed to be consistent with generally accepted accounting principles and internal control frameworks such as the GAO Green Book.
  • Supports reliable financial reporting and auditability.

• Stakeholder Collaboration:

  • Emphasizes the role of teamwork across procurement, metrology, facilities, accounting, and operational departments in the LCC estimation process.
  • Recommends involvement of subject matter experts for accuracy.

• Decision-Making Enhancement:

  • Provides transparency for cost drivers, enabling more informed procurement, operational, and retirement decisions.
  • Supports post-acquisition and recurring cost analysis to optimize resource allocation and asset performance.

Applications

ASTM E2453-19 is widely applicable in scenarios where organizations aim to maximize the value derived from property assets and minimize total ownership costs:

• Government Agencies and Institutions

  • Tracks asset expenditures for increased accountability and cost savings.
  • Supports mission efficiency and extends the useful life of assets through informed budgeting and operational plans.

• Private Sector Companies

  • Enables comprehensive cost-benefit analysis for capital investments.
  • Improves profit margins by optimizing asset utilization and disposition timing.

• Facility and Property Management

  • Guides decision-makers in evaluating options such as lease vs. buy or upgrade vs. replace.
  • Assists with planning maintenance schedules, compliance costs, and end-of-life asset strategies.

• Accounting and Financial Reporting

  • Facilitates alignment with audit requirements and internal control standards.
  • Ensures that life-cycle cost estimates are prepared with due care and proper documentation.

Related Standards

Organizations using ASTM E2453-19 may also reference the following standards and guidelines to form a comprehensive property asset management strategy:

• ASTM E2135 – Terminology for Property and Asset Management
• ASTM E2279 – Practice for Establishing the Guiding Principles of Property Asset Management
• FASB ASC 410 – Asset Retirement and Environmental Obligation
• AS 2501 – Auditing Accounting Estimates
• GAO-14-704G – Standards for Internal Control in the Federal Government (the “Green Book”)
• ISO 55000 – Asset Management – Overview, Principles, and Terminology

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Adopting ASTM E2453-19 empowers organizations to make more informed, efficient, and responsible asset management decisions, driving improved financial and operational outcomes through comprehensive life-cycle cost analysis.

Standards Content (Sample)

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.
Designation: E2453 − 19
Standard Practice for
Estimating the Life-Cycle Cost of Ownership of Property
Assets
This standard is issued under the fixed designation E2453; 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.
INTRODUCTION
The purpose of this practice is to establish organizational processes to achieve on high-value
property assets the outcome of reliable reporting of the life-cycle cost of property assets for good
decision-making purposes. Historically, and frequently, the financial and property management
communities have considered the “cost” of an item or group of items to be the acquisition value or
historical cost of the item(s). Unfortunately, when only acquisition cost is considered rather than an
estimated life-cycle cost of ownership, users may find other operating costs were not considered and
a new item may be too expensive or inconvenient to use. If operating cost is substantially less,
management may take the opportunity to plan and make further operational adjustments. Better asset
management decisions are made when estimated life-cycle costs are considered along with the
acquisition cost. However, for the purpose of this practice on life-cycle costing (LCC), one should
consider that in addition to the initial procurement costs, there are myriad costs (actual or estimated)
required to support, maintain, operate, and dispose of the item(s). This practice on LCC provides an
accepted methodology for calculating and summing those costs and provides a true total cost of
ownership that helps management make more informed and better acquisitions decisions.
1. Scope are not intended to be all-encompassing but are offered as the
basis for establishing LCC.
1.1 This practice covers the establishment of a process
consensus model for determining the life-cycle cost (LCC) of
1.4 This practice is expected to be primarily used for
property assets owned or used by an entity.
considering the life-cycle cost of personal property, however,
1.1.1 For businesses, these property assets are required to
the concept can and should be used for various types of assets
seek to achieve financial returns from producing and selling
including personal, real, tangible, and intangible.
goods or services, or both.
1.5 This practice does not supersede applicable generally
1.1.2 For institutions and agencies, these property assets are
accepted accounting principles but is intended to be consistent
required to accomplish their primary mission.
with the accounting principles particularly in the area of
1.2 Real and personal property assets may include capital
internal controls (see the GAO Green Book) and processes and
(fixed) assets and movable assets including customer-supplied
requirements for estimating. Some life-cycle cost estimating
assets, rental/leased assets, contract/project direct-purchased
may be required for accounting purposes. (See AS 2501.)
assets, or expense items.
1.6 This standard does not purport to address all of the
1.3 Asset service lives can be divided into three distinct
safety concerns, if any, associated with its use. It is the
stages, each with several separate yet interrelated substages:
responsibility of the user of this standard to establish appro-
acquisition, utilization, and disposition. These primary stages
priate safety, health, and environmental practices and to
determine the applicability of regulatory limitations prior to
This practice is under the jurisdiction of ASTM Committee E53 on Asset
use.
Management and is the direct responsibility of Subcommittee E53.03 on Financial
Management.
1.7 This international standard was developed in accor-
Current edition approved May 1, 2019. Published June 2019. Originally
dance with internationally recognized principles on standard-
approved in 2005. Last previous edition approved in 2013 as E2453–13. DOI:
10.1520/E2453–19. ization established in the Decision on Principles for the
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
E2453 − 19
Development of International Standards, Guides and Recom- procedures and use in processes and practices the appropriate
mendations issued by the World Trade Organization Technical uses of the term “asset.”
Barriers to Trade (TBT) Committee.
3.1.2 life-cycle cost (LCC), n—the sum of all known mate-
rial costs associated with an item or group of items and these
2. Referenced Documents
costs include not only the acquisition value, but also activities
2.1 ASTM Standards:
related to an item from acquisition through utilization and
E2135 Terminology for Property and Asset Management
disposition. Sometimes referred to as TCO (see 3.1.4). E2135
E2279 Practice for Establishing the Guiding Principles of
3.1.3 personal property, n—tangible property other than
Property Asset Management 7
land; in law, the tangible, movable property of an individual,
2.2 Other Documents:
exclusive of land and including items such as automotive
ASC 410 Asset Retirement and Environmental Obligation
vehicles, boats, and money.
AS 2501 Auditing Accounting Estimates
3.1.3.1 Discussion—Software (intellectual property) is con-
GAO-14-704G Standards for Internal Control in the Federal
sidered personal property.
Government (the “Green Book”), 2014
3.1.4 total cost of ownership (TCO), n—analogous to LCC;
ISO 55000 Asset management -- Overview, principles and
for clarity and consistency, this practice will use LCC exclu-
terminology
sively.
3. Terminology
4. Summary of Practice
3.1 Definitions:
4.1 Fordecision-makingpurposes,thispracticeprovidesfor
3.1.1 asset—the term for accounting purposes is generally
complete accountability and financial control of assets by
defined in an organization’s policy based on applicable ac-
separating the three major life-cycle stages into more compre-
counting standards. The term for asset management purpose
hensive substages and then associating those stages and sub-
should also be defined in an organization’s policy and may
stages with the effort and costs.
include the ISO 55000 definition of an asset: item, thing, or
4.2 Entities adhering to this practice will establish a demon-
entity that has potential or actual value to an organization.
strable and consistent methodology to ascertain the LCC for
3.1.1.1 Discussion—Value can be tangible or intangible,
individual assets or groups of assets. Elements of the method-
financial or nonfinancial, and includes consideration of risks
ology will consider, at a minimum, those factors described in
and liabilities. It can be positive or negative at different stages
this practice.
of the asset life.
3.1.1.2 Discussion—Physical assets usually refer to
4.3 The costs, now identified, can be tracked and analyzed,
equipment, inventory, and properties owned by the organiza-
leading to a more comprehensive understanding of how assets
tion.Physicalassetsaretheoppositeofintangibleassets,which
can be more effectively and efficiently used, especially from a
arenonphysicalassetssuchasleases,brands,digitalassets,use
cost standpoint.
rights, licenses, intellectual property rights, reputation, or
5. Significance and Use
agreements.
3.1.1.3 Discussion—A grouping of assets referred to as an
5.1 For agencies and institutions, measuring and managing
asset system could also be considered as an asset.
the LCC of ownership of property may directly result in
3.1.1.4 Discussion—Asset management generally supports
improved accountability, in the form of cost savings, increased
theaccountingarenainwhichtheaccountingrulesapply.Asset
asset utilization, extended asset life, and increased mission
management may operate and use the broader definition of
effectiveness.
asset management that may not only impact financial account-
5.2 For companies, measuring and managing the LCC of
ing reporting but also other organizational objectives and
ownership of property may directly result in cost savings,
commitments. Company management, who has the responsi-
increased asset utilization, and, therefore, improved profit
bility to establish adequate internal controls, should identify in
margins.
5.3 Including LCC in the three stages is consistent with
For referenced ASTM standards, visit the ASTM website, www.astm.org, or
Practice E2279 under the reporting principle.
contact ASTM Customer Service at [e-mail]. For Annual Book of ASTM
Standards volume information, refer to the standard’s Document Summary page on
6. Associated Costs
the ASTM website.
Available from Financial Accounting Standards Board (FASB), 401 Merritt 7,
6.1 Associated costs can be broken down into three distinct
P.O. Box 5116, Norwalk, Connecticut 06856-5116, https://www.fasb.org.
stages:
Available from the Public Company Accounting Oversight Board (PCAOB),
6.1.1 Acquisition—Budgetary/planning–concept, feasibility,
1666 K Street, NW, Washington, DC 20006-2803, https://pcaobus.org.
Available from U.S. GovernmentAccountability Office (GAO), 441 G St., NW,
studies, funding, lease/buy, make/buy, and so forth, and site
Washington, DC 20548, http://www.gao.gov. The GAO Green Book is based upon
acquisition, construction,
...

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: E2453 − 13 E2453 − 19
Standard Practice for
DeterminingEstimating the Life-Cycle Cost of Ownership of
Personal PropertyProperty Assets
This standard is issued under the fixed designation E2453; 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.
INTRODUCTION
Historically, The purpose of this practice is to establish organizational processes to achieve on
high-value property assets the outcome of reliable reporting of the life-cycle cost of property assets
for good decision-making purposes. Historically, and frequently, the financial and property manage-
ment communities have considered the “cost” of an item or group of items to be the acquisition value
of the item(s), that is, the value/cost of an item is generally based upon the amount of money paid for
the item, irrespective of the many and varied costs associated with the full life cycle. There are more
appropriate models than the historical model for valuing property. or historical cost of the item(s).
Unfortunately, when only acquisition cost is considered rather than an estimated life-cycle cost of
ownership, users may find other operating costs were not considered and a new item may be too
expensive or inconvenient to use. If operating cost is substantially less, management may take the
opportunity to plan and make further operational adjustments. Better asset management decisions are
made when estimated life-cycle costs are considered along with the acquisition cost. However, for the
purpose of this practice on life-cycle costing (LCC), one should consider that in addition to the initial
procurement costs, there are myriad costs (actual or estimated) required to support, maintain, operate,
and dispose of the item(s). This practice on LCC provides an accepted methodology for calculating
and summing those costs and provides a true total cost of ownership that helps management make
more informed and better acquisitions decisions.
1. Scope
1.1 This practice covers the establishment of a process consensus model for determining the life-cycle cost (LCC) of personal
property assets owned or used by an entity.
1.1.1 For businesses, these personal property assets are required to seek to achieve financial returns from producing and selling
goods or services, or both.
1.1.2 For institutions and agencies, these personal property assets are required to accomplish their primary mission.
1.2 Real and personal property assets may include capital (fixed) assets and movable, durable movable assets including:in-
cluding customer-supplied assets, rental/leased assets, contract/project direct-purchased assets, or expense items.
1.3 Asset service lives can be divided into three distinct stages, each with several separate yet interrelated substages: acquisition,
utilization, and disposition. These primary stages are not intended to be all encompassing, all-encompassing but are offered as the
basis for establishing LCC.
1.4 This practice is expected to be primarily used for considering the life-cycle cost of personal property, however, the concept
can and should be used for various types of assets including personal, real, tangible, and intangible.
1.5 This practice does not supersede applicable generally accepted accounting principles but is intended to be consistent with
the accounting principles particularly in the area of internal controls (see the GAO Green Book) and processes and requirements
for estimating. Some life-cycle cost estimating may be required for accounting purposes. (See AS 2501.)
1.6 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility
of the user of this standard to establish appropriate safety safety, health, and healthenvironmental practices and to determine the
applicability of regulatory limitations prior to use.
This practice is under the jurisdiction of ASTM Committee E53 on Asset Management and is the direct responsibility of Subcommittee E53.03 on Financial Management.
Current edition approved July 15, 2013May 1, 2019. Published July 2013June 2019. Originally approved in 2005. Last previous edition approved in 20052013 as
E2453–05.–13. DOI: 10.1520/E2453–13.10.1520/E2453–19.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
E2453 − 19
1.7 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:
E2135 Terminology for Property and Asset Management
E2279 Practice for Establishing the Guiding Principles of Property Asset Management
2.2 Other Documents:
ASC 410 Asset Retirement and Environmental Obligation
AS 2501 Auditing Accounting Estimates
GAO-14-704G Standards for Internal Control in the Federal Government (the “Green Book”), 2014
ISO 55000 Asset management -- Overview, principles and terminology
3. Terminology
3.1 Definitions:
3.1.1 calibration, asset—n—act of standardizing or determining the deviation from a standard so as to ascertain the proper
correction factors.the term for accounting purposes is generally defined in an organization’s policy based on applicable accounting
standards. The term for asset management purpose should also be defined in an organization’s policy and may include the ISO
55000 definition of an asset: item, thing, or entity that has potential or actual value to an organization.
3.1.1.1 Discussion—
Value can be tangible or intangible, financial or nonfinancial, and includes consideration of risks and liabilities. It can be positive
or negative at different stages of the asset life.
3.1.1.2 Discussion—
Physical assets usually refer to equipment, inventory, and properties owned by the organization. Physical assets are the opposite
of intangible assets, which are nonphysical assets such as leases, brands, digital assets, use rights, licenses, intellectual property
rights, reputation, or agreements.
3.1.1.3 Discussion—
A grouping of assets referred to as an asset system could also be considered as an asset.
3.1.1.4 Discussion—
Asset management generally supports the accounting arena in which the accounting rules apply. Asset management may operate
and use the broader definition of asset management that may not only impact financial accounting reporting but also other
organizational objectives and commitments. Company management, who has the responsibility to establish adequate internal
controls, should identify in procedures and use in processes and practices the appropriate uses of the term “asset.”
3.1.2 life-cycle cost (LCC), n—the sum of all known material costs associated with an item or group of items and these costs
include not only the acquisition value, but also activities related to an item from acquisition through utilization and disposition.
Sometimes referred to as TCO (see 3.1.63.1.4). E2135
3.1.3 personal property, n—tangible property other than land; in law, the tangible, movable property of an individual, exclusive
of land and including items such as automotive vehicles, boats, and money.
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.
Available from Financial Accounting Standards Board (FASB), 401 Merritt 7, P.O. Box 5116, Norwalk, Connecticut 06856-5116, https://www.fasb.org.
Available from the Public Company Accounting Oversight Board (PCAOB), 1666 K Street, NW, Washington, DC 20006-2803, https://pcaobus.org.
Available from U.S. Government Accountability Office (GAO), 441 G St., NW, Washington, DC 20548, http://www.gao.gov. The GAO Green Book is based upon
Committee of Sponsoring Organizations of the Treadway Commission, Internal Control - Integrated Framework (New York: American Institute of Certified Public
Accountants, 2013).
Available from International Organization for Standardization (ISO), ISO Central Secretariat, BIBC II, Chemin de Blandonnet 8, CP 401, 1214 Vernier, Geneva,
Switzerland, http://www.iso.org.
Definition from Encarta World English Dictionary (North American Edition), Microsoft Corp., 2004.
E2453 − 19
3.1.3.1 Discussion—
Software (intellectual property) is considered personal property.
3.1.4 preventative maintenance, n—regularly scheduled periodic maintenance activities on selected equipment that typically
includes inspection, lubrication, and minor adjustment.
3.1.5 property, n—something or a number of things in which one has the rights and interests subject to ownership including both
tangible and intangible property (see Terminology E2135).
3.1.5.1 Discussion—
For the purposes of this practice, property includes, but is not limited to, capital (fixed) assets, customer-supplied assets,
rental/leased assets, contract/project direct-purchased assets, or expense items. Generally, property does not include finished goods,
products, or services marketed or sold or intangible property (such as intellectual property, patents, and so forth).
3.1.4 total cost of ownership (TCO), n—analogous to LCC; for clarity and consistency, this practice will use LCC exclusively.
4. Summary of Practice
4.1 For decision making purposes decision-making purposes, this practice provides for complete accountability and financial
control of personal property assets by separating the three major life-cycle stages into more comprehensive substages and then
associating those stages and substages with the effort and costs.
4.2 Entities adhering to this practice will establish a demonstrable and consistent methodology to ascertain the
...