Designation:E2220–02StandardPracticeforEstablishingtheFullValuationoftheLoss/OveragePopulationIdentifiedDuringtheInventoryofMoveable,DurableProperty1ThisstandardisissuedunderthefixeddesignationE2220;thenumberimmediatelyfollowingthedesignationindicatestheyearoforiginaladoptionor,inthecaseofrevision,theyearoflastrevision.Anumberinparenthesesindicatestheyearoflastreapproval.Asuperscriptepsilon(e)indicatesaneditorialchangesincethelastrevisionorreapproval.1.Scope1.1Thispracticecoverstheassignmentofavaluetocategoriesandcompletepopulationsoflostordestroyedpropertyassetsforthepurposeofdeterminingthecompositecostofallsuchlossesonaperiodicbasis.Thispracticedoesnotaddressthevaluationofindividualpropertyassets.1.2Thereasonforassigningalossordestructionvalueistoestablishaneconomicbasisfortheallocationofresourcestomanagepropertyefficientlyandinacosteffectivemanner.1.3Thedirectcostoflost,damagedordestroyed(LDD)propertyhaslittletodowiththeacquisition,bookormarketvalueofsuchassets.Whileinmanyorganizations,thevalueofLDDpropertyisreflectedatacquisitioncostintheGeneralLedgeraccountsthisapproachisonlyappropriateforthefinancialreportingofpropertyassets.1.4ThecalculationofthecostoflossordestructionofpropertyforthepurposesofcomputinganecessaryfactortobeusedintheequationappliedunderPracticeE2219istobebasedupontheconsiderationofboththeriskofaninventoryshortageaswellasthebenefitsofinventorycontrolandoveragemanagement.1.5Thevaluationofpropertyforthepurposesofmanage-mentandcontrolistobebasedupontheconsiderationofboththeriskofaninventoryshortageandbenefitsofinventorymanagementascontainedinthisstandard.2.ReferencedDocuments2.1ASTMStandards:E2219PracticefortheValuationandManagementofMoveable,DurableProperty23.Terminology3.1DefinitionsofTermsSpecifictoThisStandard:3.1.1acquisitioncost—thepurchasepricepaidforpropertyandanysubsequentimprovementstoit.3.1.2agency—governmentorganization,regardlessoflevel(federal,state,orlocal).3.1.3company—afor-profitorganization.3.1.4institution—anot-for-profit...
