ASTM E2453-13
(Practice)Standard Practice for Determining the Life-Cycle Cost of Ownership of Personal Property
Standard Practice for Determining the Life-Cycle Cost of Ownership of Personal Property
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 personal property assets owned or used by an entity.
1.1.1 For businesses, these personal property assets are required 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 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 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 and health practices and to determine the applicability of regulatory limitations prior to use.
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Designation: E2453 − 13
Standard Practice for
Determining the Life-Cycle Cost of Ownership of Personal
1
Property
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 financial and property management 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. 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 required to support,
maintain,operate,anddisposeoftheitem(s).ThispracticeonLCCprovidesanacceptedmethodology
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 2. Referenced Documents
2
1.1 This practice covers the establishment of a process
2.1 ASTM Standards:
consensus model for determining the life-cycle cost (LCC) of
E2135 Terminology for Property and Asset Management
personal property assets owned or used by an entity.
E2279 Practice for Establishing the Guiding Principles of
1.1.1 For businesses, these personal property assets are
Property Management
required to achieve financial returns from producing and
selling goods or services, or both.
3. Terminology
1.1.2 For institutions and agencies, these personal property
3.1 Definitions:
assets are required to accomplish their primary mission.
3.1.1 calibration, n—actofstandardizingordeterminingthe
1.2 Real and personal property assets may include capital
deviation from a standard so as to ascertain the proper
(fixed) assets and movable, durable assets including: customer-
correction factors.
supplied assets, rental/leased assets, contract/project direct-
3.1.2 life-cycle cost (LCC), n—sum of all known material
purchased assets, or expense items.
costs associated with an item or group of items and these costs
1.3 Asset service lives can be divided into three distinct
include not only the acquisition value, but also activities
stages, each with several separate yet interrelated substages:
related to an item from acquisition through utilization and
acquisition, utilization, and disposition. These primary stages
disposition. Sometimes referred to as TCO (see 3.1.6).
are not intended to be all encompassing, but are offered as the
3.1.3 personal property, n—tangible property other than
basis for establishing LCC.
3
land; in law, the tangible, movable property of an individual,
1.4 This standard does not purport to address all of the
exclusive of land and including items such as automotive
safety concerns, if any, associated with its use. It is the
vehicles, boats, and money.
responsibility of the user of this standard to establish appro-
3.1.3.1 Discussion—Software (intellectual property) is con-
priate safety and health practices and to determine the
sidered personal property.
applicability of regulatory limitations prior to use.
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 E2453–05. DOI: Definition from Encarta World English Dictionary (North American Edition),
10.1520/E2453–13. Microsoft Corp., 2004.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
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E2453 − 13
3.1.4 preventative maintenance, n—regularly scheduled pe- rehabilitation/overhaul; calibration; environmental, health, and
riodic maintenance activities on selected equipment that typi- safety (EHS) compliance; American with Disabilities Act
cally includes inspection, lubrication, and minor adjustment. (ADA) compliance; and so forth; and
6.1.3 Disposition—Identification of idle or excess items or
3.1.5 property, n—somethingoranumberofthingsinwhich
both, disposition
...
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 − 05 E2453 − 13
Standard Practice for
Determining the Life-Cycle Cost of Ownership of Personal
1
Property
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 financial and property management 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. As detailed in PracticeThere are more appropriate E2219, given
unique circumstances, there may be more appropriate models models than the historical model for
valuing property. 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 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.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 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 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 fourthree distinct stages, each with several separate yet interrelated substages:
budgetary/planning, 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 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 and health practices and to determine the applicability of regulatory
limitations prior to use.
2. Referenced Documents
2
2.1 ASTM Standards:
E2135 Terminology for Property and Asset Management
E2219E2279 Practice for Valuation and Management of Moveable, Durable PropertyEstablishing the Guiding Principles of
Property Management (Withdrawn 2009)
3. Terminology
3.1 Definitions:
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 E2453–05.
DOI: 10.1520/E2453-05.10.1520/E2453–13.
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.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
1
---------------------- Page: 1 ----------------------
E2453 − 13
3.1.1 calibration, n—act of standardizing or determining the deviation from a standard so as to ascertain the proper correction
factors.
3.1.2 life-cycle cost (LCC), n—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 all activities related to an item from acquisition through utilization and disposition.
Sometimes referred to as TCO (see 3.1.6).
3
3.1.3 personal property, n—tangible property other than landland; ; in law, the tangible, movable property of an individual,
exclusive of land and including items such as automotive vehicles, boats, and money.
3
Definition from Encarta World English Dictionary (North American Edition), Mic
...
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