ASTM E2453-05

Standard Practice for Determining the Life-Cycle Cost of Ownership of Personal Property

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 four 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.

General Information

• Status: Historical
• Publication Date: 30-Jun-2005
• ICS: 03.100.10 - Purchasing. Procurement. Logistics
• Technical Committee: E53 - Asset Management
• Drafting Committee: E53.03 - Financial Aspects Asset Management

Relations

• Replaced By: ASTM E2453-13 - Standard Practice for Determining the Life-Cycle Cost of Ownership of Personal Property
• Effective Date: 15-Jul-2013
• Referred By: ASTM E2675-22 - Standard Practice for Asset Management System Outcomes
• Effective Date: 01-Jul-2005
• Referred By: ASTM E2135-22 - Standard Terminology for Property and Asset Management
• Effective Date: 01-Jul-2005
• Referred By: ASTM E3210-20 - Standard Practice for Infrastructure Management
• Effective Date: 01-Jul-2005
• Referred By: ASTM E2604-21 - Standard Practice for Data Characteristics of Personal Property Asset Record
• Effective Date: 01-Jul-2005
• Referred By: ASTM E2279-20 - Standard Practice for Establishing the Guiding Principles of Property Asset Management
• Effective Date: 01-Jul-2005
• Referred By: ASTM E3140-19 - Standard Guide for Asset Management Career Development, Education, and Training
• Effective Date: 01-Jul-2005
• Referred By: ASTM E2811-17 - Standard Practice for Management of Low Risk Property (LRP)
• Effective Date: 01-Jul-2005

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: E2453 − 05
StandardPractice for
Determining the Life-Cycle Cost of Ownership of Personal
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 Practice E2219, given unique circumstances, there
may be more appropriate models 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.
1. Scope 2. Referenced Documents
2.1 ASTM Standards:
1.1 This practice covers the establishment of a process
consensus model for determining the life-cycle cost (LCC) of E2135 Terminology for Property and Asset Management
E2219 Practice forValuation and Management of Moveable,
personal property assets owned or used by an entity.
1.1.1 For businesses, these personal property assets are Durable Property (Withdrawn 2009)
required to achieve financial returns from producing and
3. Terminology
selling goods or services, or both.
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
deviation from a standard so as to ascertain the proper
1.2 Real and personal property assets may include capital
correction factors.
(fixed) assets and movable, durable assets including: customer-
3.1.2 life-cycle cost (LCC), n—sum of all known material
supplied assets, rental/leased assets, contract/project direct-
costs associated with an item or group of items and these costs
purchased assets, or expense items.
include not only the acquisition value, but also all activities
1.3 Asset service lives can be divided into four distinct
related to an item from acquisition through utilization and
stages, each with several separate yet interrelated substages:
disposition. Sometimes referred to as TCO (see 3.1.6).
budgetary/planning, acquisition, utilization, and disposition.
3.1.3 personal property, n—tangible property other than
These primary stages are not intended to be all encompassing,
land ; in law, the tangible, movable property of an individual,
but are offered as the basis for establishing LCC.
exclusive of land and including items such as automotive
1.4 This standard does not purport to address all of the
vehicles, boats, and money.
safety concerns, if any, associated with its use. It is the
3.1.3.1 Discussion—Software (tangible intellectual prop-
responsibility of the user of this standard to establish appro-
erty) is considered personal property.
priate safety and health practices and to determine the
applicability of regulatory limitations prior to use.
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’s Document Summary page on
This practice is under the jurisdiction of ASTM Committee E53 on Property the ASTM website.
Management Systems and is the direct responsibility of Subcommittee E53.03 on The last approved version of this historical standard is referenced on
Financial Management. www.astm.org.
Current edition approved July 1, 2005. Published July 2005. DOI: 10.1520/ Definition from Encarta World English Dictionary (North American Edition),
E2453-05. Microsoft Corp., 2004.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
E2453 − 05
3.1.4 preventative maintenance, n—regularly scheduled pe- 6.1.4 Disposition—Identification of idle or excess items or
riodic maintenance activities (within a year) on selected both, disposition determinations, actual disposal costs, and so
equipment that typically includes inspection, lubrication, and forth.
minor adjustment.
6.2 Assets—The four major stages in the life of an asset or
3.1.5 property, n—somethingoranumberofthingsinwhich
groupofassetsarefurtherdetailed(thisisnotintendedtobean
one has the rights and interests subject to ownership including
all inclusive listing):
both tangible and intangible property (see Terminology
6.2.1 Budgetary/Planning:
E2135).
6.2.1.1 Need identified,
3.1.5.1 Discussion—For the purposes of this practice, prop-
6.2.1.2 Concept planning,
erty includes, but is not limited to, capital (fixed) assets,
6.2.1.3 Resolution,
customer-supplied assets, rental/leased assets, contract/project
6.2.1.4 Funding,
direct-purchased assets, or expense items. Generally, property
6.2.2 Acquisition:
does not include finished goods, products, or services marketed
6.2.2.1 Design,
or sold or intangible property (such as intellectual property, 6.2.2.2 Develop,
patents, and so forth).
6.2.2.3 Purchase,
6.2.2.4 Receive,
3.1.6 total cost of ownership (TCO), n— analogous to LCC;
6.2.2.5 Identify, and
for clarity and consistency, this practice will use LCC exclu-
6.2.2.6 Record.
sively.
6.2.3 Utilization:
6.2.3.1 Set up integration as necessary and function check,
4. Summary of Practice
6.2.3.2 Training operators,
4.1 This practice provides for complete accountability and
6.2.3.3 Maintenance, rehabilitation, and metrology
financial control of personal property by separating the four
(calibration),
major life-cycle stages into more comprehensive substages and
6.2.3.4 Movement and storage,
then associating those stages and substages with the effort and
6.2.3.5 Physical inventories,
costs.
6.2.3.6 Reports,
4.2 Entities adhering to this practice will establish a demon-
6.2.3.7 Subcontractor control (for those assets at vendors),
strable and consistent methodology to ascertain the LCC for and
individual assets or groups of assets. Elements of the method-
6.2.3.8 Labor cost for operation.
ology will consider, at a minimum, those factors described in 6.2.4 Disposition:
this practice.
6.2.4.1 Disclosure as excess,
6.2.4.2 Approval/authority to dispose,
4.3 The costs, now identified, can be tracked and analyzed,
6.2.4.3 Disposition determination,
leading to a more comprehensive understanding of how assets
6.2.4.4 Value received/costs incurred for disposal, and
can be more effecti
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