ASTM_E_2378_-_13.pdf

Designation:E237813Standard Practice forthe Recognition of Impaired or Retired Personal Property1This standard is issued under the fixed designation E2378;the number immediately following the designation indicates the year oforiginal adoption or,in the case of revision,the year of last revision.A number in parentheses indicates the year of last reapproval.Asuperscript epsilon()indicates an editorial change since the last revision or reapproval.1.Scope1.1 This practice covers guidance as to the proper treatmentfor accounting and accountability purposes when items are stillretained,but need to be recognized as impaired or retired toadministrative control.This practice is intended to be used inconjunction with Practice E2279,which provides variousprinciples to improve the effectiveness and efficiency of theproperty management functions.These include the concepts ofmateriality,best value,reasonable detail,and reasonable assur-ance and proper reporting.During the life cycle of propertymanagement,appropriate action must be taken at the appropri-ate time to be in conformance with these principles.Theobjective,on behalf of the owner,is to maintain propertyaccounting records that adequately represent the actual value ofproperty and for accountability purposes apply the appropriatemanagement and oversight.1.2 This practice covers the recognition of depreciation ofpersonal property that is critical to a fair representation of theentitys property and financial records.For instances whenitems for accounting or property management purposes may nolonger serve the purpose that was originally intended,it may bemore appropriate to recognize impairments or retire these itemsfor record keeping purposes.1.3 Generally,entities formally record,account,and inven-tory personal property that meet certain criteria,as defined bytheentity,baseduponacquisitioncostthresholds,expendability,or useful life policies.Accordingly,entitiesshould establish recurring depreciation cycles so that theproperty eligible for depreciation is fairly and consistentlyrecorded in the entitys records in accordance with generallyaccepted accounting principles.1.4 The percentage and frequency of depreciation is depen-dent on such factors as the nature of owned property,its usefullife,and the frequency of property use in support of business-type activities of the entity.1.5 This practice covers accepted practice of proper recordkeeping actions when items are fully depreciated for account-ing purposes and should be retired from the accounting as wellas property management purposes when the asset no longerserves the purpose that was intended but still remains on theentities premises or continues to be under some form ofcontrol.1.6 Entities have a responsibility under their internal con-trols to operate effectively,efficiently,and in a reasonable andresponsible manner to provide stakeholders best value asprovided in public law,regulations and generally acceptedaccounting practices.1.7 This standard is limited to property management func-tions.This standard does not purport to address tax concerns,if any,associated with its use.It is the responsibility of the userof this standard to establish appropriate internal tax guidelinesand to determine the applicability of regulatory or statutoryrequirements prior to use.2.Referenced Documents2.1 ASTM Standards:2E2135 Terminology for Property and Asset ManagementE2279 Practice for Establishing the Guiding Principles ofProperty Management2.2GAO Document:3GAO Government Auditing Standards(The Yellow Book)20113.Terminology3.1 Definitions:For definitions relating to Property andAsset Management,refer to Terminology E2135.3.2 Definitions of Terms Specific to This Standard:3.2.1 abuse,nAbuse involves behavior that is deficient orimproper when compared with behavior that a prudent personwould consider reasonable and necessary business practicegiven the facts and circumstances.Abuse also includes misuseof authority or position for personal financial interests or those1This practice is under the jurisdiction of ASTM Committee E53 on AssetManagement and is the direct responsibility of Subcommittee E53.03 on FinancialManagement.Current edition approved July 15,2013.Published July 2013.Originallyapproved in 2005.Last previous edition approved in 2005 as E237805.DOI:10.1520/E2378-13.2For referenced ASTM standards,visit the ASTM website,www.astm.org,orcontact ASTM Customer Service at serviceastm.org.For Annual Book of ASTMStandards volume information,refer to the standards Document Summary page onthe ASTM website.3Available from the U.S.Government Accountability Office(GAO),441 G St.,NW,Washington,DC 20548,http:/www.gao.gov.Copyright ASTM International,100 Barr Harbor Drive,PO Box C700,West Conshohocken,PA 19428-2959.United States1 of an immediate or close family member or business associate.Abuse does not necessarily involve fraud or noncompliancewith provisions of laws,regulations,contracts or grant agree-ments.(From the GAO Yellow Boo