ASTM E2131-01

Standard Practice for Assessing Loss, Damage, or Destruction of Property

SIGNIFICANCE AND USE
LDD analysis can be an indicator of the adequacy of the control and security exercised over the assets in the possession of or under the cognizance of a company, agency or institution. Excessive LDD can indicate weaknesses in awareness of control processes, physical security, procedures, and the like.
LDD creates concerns regarding effectiveness and efficiency indicating a negative impact on profitability or mission. Excessive LDD increases risk, and indicates at least a potential, if not real, weakness in procedures processes, and control.
SCOPE
1.1 This practice covers the assessment of loss, damage, and destruction (LDD) of property, assets, or material. LDD occurs when such property is found to be missing, damaged, or destroyed. Such discoveries often are made as a result of a physical inventory, an analysis of material used, or routine audits.
1.2 Some occurrences of damage and destruction are the result of natural disasters or other incidents beyond the control of the company, agency, or institution, and are not subject to the standards in paragraph 7. However, the reporting of such instances in accordance with paragraph 8 is still required.
1.3 Some occurrences of LDD are a result of natural degradation or other incidents of fair wear and tear and are not addressed as a part of this practice.
1.4 Loss, damage and destruction, while three completely different occurrences, are addressed as one in this standard. For the purpose of this standard, reporting and evaluating loss, damage and destruction are the same.
1.5 Loss, damage and destruction are key aspects of risk management. Projecting the possibility or probability of LDD, reporting and managing, and minimizing LDD is a critical and economic factor in the success of any endeavor.

General Information

• Status: Historical
• Publication Date: 09-Jan-2001
• ICS: 91.120.01 - Protection of and in buildings in general
• Technical Committee: E53 - Asset Management
• Drafting Committee: E53.04 - Reutilization and Disposal

Relations

• Replaced By: ASTM E2131-09 - Standard Practice For Addressing and Reporting Loss, Damage, or Destruction of Tangible Property
• Effective Date: 01-Sep-2009
• Referred By: ASTM E2132-17 - Standard Practice for Inventory Verification: Electronic and Physical Inventory of Assets
• Effective Date: 10-Jan-2001
• Referred By: ASTM E2452-12(2019) - Standard Practice for Equipment Management Process Maturity (EMPM) Model
• Effective Date: 10-Jan-2001
• Referred By: ASTM E2675-22 - Standard Practice for Asset Management System Outcomes
• Effective Date: 10-Jan-2001
• Referred By: ASTM E2676-09(2020) - Standard Practice for Tangible Property Mobility Index (MI)
• Effective Date: 10-Jan-2001
• Referred By: ASTM E2279-20 - Standard Practice for Establishing the Guiding Principles of Property Asset Management
• Effective Date: 10-Jan-2001
• Referred By: ASTM E2811-17 - Standard Practice for Management of Low Risk Property (LRP)
• Effective Date: 10-Jan-2001

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 2131 – 01
Standard Practice for
Assessing Loss, Damage, or Destruction of Property
This standard is issued under the fixed designation E 2131; 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 3.1.1 agency—governmental agency, regardless of level
(federal, state, or local).
1.1 Thispracticecoverstheassessmentofloss,damage,and
3.1.2 company—for-profit organization.
destruction (LDD) of property, assets, or material. LDD occurs
3.1.3 institution—not-for-profit, non-governmental organi-
when such property is found to be missing, damaged, or
zation.
destroyed. Such discoveries often are made as a result of a
3.1.4 customer property—property in the possession of an
physical inventory, an analysis of material used, or routine
entity to which it does not have title, e.g., items received for
audits.
servicing, repair or refurbishment, or items received for inte-
1.2 Some occurrences of damage and destruction are the
gration into a higher assembly. Customer property does not
result of natural disasters or other incidents beyond the control
normallyincludeassetsunderalien,suchasland,towhichtitle
of the company, agency, or institution, and are not subject to
should or could eventually pass to the entity.
the standards in paragraph 7. However, the reporting of such
3.1.5 risk—the chance of loss, or the possibility of loss, or
instances in accordance with paragraph 8 is still required.
the probability of loss or the uncertainty of loss, damage,
1.3 Some occurrences of LDD are a result of natural
destruction or theft that surrounds an asset.
degradation or other incidents of fair wear and tear and are not
NPMA Standard Property Book
addressed as a part of this practice.
3.1.6 risk management—understanding the underlying prin-
1.4 Loss, damage and destruction, while three completely
ciples of risk, recognizing those instances where a risk exists
different occurrences, are addressed as one in this standard. For
and acting to control those risks based upon sound economic
the purpose of this standard, reporting and evaluating loss,
principles and practices. NPMA Standard Property Book
damage and destruction are the same.
3.1.7 high-risk property—that property either regulated by
1.5 Loss, damage and destruction are key aspects of risk
law (e.g. pharmaceuticals, medical supplies, firearms and
management. Projecting the possibility or probability of LDD,
ammunition, hazardous materials/waste) or in any way is
reporting and managing, and minimizing LDD is a critical and
potentially dangerous to public health or security.
economic factor in the success of any endeavor.
3.1.8 Risk degrees and factors:
2. Referenced Documents 3.1.8.1 high risk—significant, recurring LDD, immediate
corrective action is required. More than a 5 % variance.
2.1 Risk Matrix:
3.1.8.2 medium risk—significant LDD which does not re-
DLAD 5000.4, Chapter 7.1, Contract Property Management,
cur, or recurrent LDD of low value, corrective action is
May 2000
required. A 2 % to 5 % variance.
2.2 Risk Management:
3.1.8.3 low risk—isolated, low value instances of LDD,
The NPMA Standard Property Book, First Edition, July
continued monitoring is recommended. Less than a 2 %
variance.
2.3 Material Management and Accounting System
DLAD 5000.4
(MMAS):
242.72 and 252.242-7004 Department of Defense Federal
4. Significance and Use
Acquisition Regulation Supplement, January 1, 2000
4.1 LDD analysis can be an indicator of the adequacy of the
3. Terminology
control and security exercised over the assets in the possession
of or under the cognizance of a company, agency or institution.
3.1 Definitions of Terms Specific to This Standard:
Excessive LDD can indicate weaknesses in awareness of
control processes, physical security, procedures, and the like.
This practice is under the jurisdiction of ASTM Committee E53 on Property
Management Systems and is the direct responsibility of Subcommittee E53.04 on
Reutilization and Disposal.
Current edition approved Jan. 10, 2001. Published February 2001.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
E2131–01
4.2 LDD creates concerns regarding effectiveness and effi- 7.1.2 The acceptable LDD ratio for high-risk property is
ciency indicating a negative impact on profitability or mission. 0%.
ExcessiveLDDincreasesrisk,andindicatesatleastapotential, 7.2 The following are intended as guidelines against which
if not real, weakness in procedures processes, and control. individual policies and procedures may be modeled.
7.2.1 Customer-owned Property—This property is in the
5. Procedure custody of or otherwise under the control or under the
cognizance of a supplier (see 3.1.4). Such a situation could be
5.1 Upon discovering or determining LDD (e.g., vehicle
as simple as an automobile service center or dry cleaners, or as
damage, theft, negligence, misuse of property), report it as
complex as a multi-company effort to repair a very sophisti-
soon as possible, but not longer than 24 hours after the
cateditem.Anexampleofstandardssetforjustsuchasituation
occurrence. Report LDD to a cognizant functional area in the
appear in DLAD 5000.4, which defines risk assessment criteria
company or institution such as security.
for defense contractor’s property control systems (see 3.1).
5.2 If the situation warrants, investigate LDD and prepare a
These criteria, while subjective, are useful for evaluating LDD.
writtenreport.Submitthereportwithin30calendardays,when
DLAD 5000.4 also defines risk assessment criteria for physical
possible. If not all the facts have been established within 30
inventory results (see 3.1). Since LDD is most frequently
days, prepare an interim report and submit it to the cognizant
discovered as a result of inventories, these criteria may well be
functional area. (See Section 8.) A warranted situation should
applied to LDD standards. Another example is that of a
be determined in accordance with paragraph 5.4 and Section 7.
MaterialManagementandAccountingSystem(MMAS),under
5.3 Investigate excessive LDD, analyze the cause(s), and
which a 95 % inventory accuracy is required for an acceptable
implement corrective action. Factors affecting the investigation
MMAS (see 2.3).
include, but are not limited to, the circumstances surrounding
7.2.2 ABC Type Method—This method is a Pareto analysis
the LDD, the cost of repair or replacement, insurance consid-
performed upon the property to determine value density in the
erations, necessary corrective actions, and any other factors
inventory population. ABC does not stan
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