ASTM E2132-01

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Designation: E 2132 – 01
Standard Practice for
1
Physical Inventory of Durable, Moveable Property
This standard is issued under the fixed designation E 2132; 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 (ε) indicates an editorial change since the last revision or reapproval.
1. Scope valid and useful, complete the physical inventory by consis-
tently applying written procedures. As physical inventories
1.1 This practice covers the physical inventory of durable,
generally measure performance over a period of months or
moveable property. Physical inventory is a vital part of a
years and results are often trended, it is desirable to repeat past
property control system.
inventory practices in order to make results comparable.
2. Significance and Use 3.1.2 As physical inventories are generally efforts involving
significant time, resources, complexity, and personnel, appro-
2.1 Physical Inventory—The primary product of a physical
priate project management techniques should be employed.
inventory is a report identifying, at a minimum, which items
Address the elements in 3.2 through 3.13 when planning.
were located and which were not. The number and value of
3.2 Management and Accountability—Assign responsibil-
unlocated items constitute an organization’s loss experience,
ity, authority, and accountability for the conduct of physical
which is critical for assessing the organization’s property
inventory and for the results of the inventory.
control risk and success. Unlocated items that are capitalized
3.3 Key Results Required—Prior to planning an inventory,
on an organization’s financial records are generally written off
determinethedecisionsthatwillbemadebaseduponinventory
at the close of the inventory (and therefore physical inventories
results and the key results required to make these decisions.
are important to ensuring that public financial statements are
For example, a common decision is whether or not a control
accurate). Physical inventories have several byproducts as
system is effective; the find rate by value or number of items is
well. During the inventory, record deficiencies, such as incor-
often used as a key determinant. The number or percent of
rect locations or unrecorded property items are identified; these
unrecorded assets (overages) is an indicator of an organiza-
records are corrected as part of the process. Finally, physical
tion’s success at achieving control of inbound or newly
inventory serves as a deterrent to loss, theft, damage, and
fabricated assets. All subsequent elements of physical inven-
misuse as those responsible for property perceive that they will
tory planning must accommodate measurement of key results
be held accountable for it and be required to produce it on a
with sufficient accuracy and precision for decision-making.
periodic basis. In summary, physical inventories are conducted
3.4 Population:
to accomplish one or more of the following:
3.4.1 Determine the population to be inventoried. A popu-
2.1.1 Assess the accuracy of property records,
lation may be defined by equipment type, value, location, age,
2.1.2 Update property records,
controllingorganizationorprogram,usestatus,orothercontrol
2.1.3 Assess property loss experience,
categories.Determinewhethertoconductacompleteinventory
2.1.4 Provide the status of capital items for financial report-
of those categories or employ a sampling technique. If sam-
ing purposes, and
plingtechniquesareemployed,determinethesamplingmethod
2.1.5 Deter misuse, loss, damage, and theft of property.
and size before selecting a sample. The sample must be
Physical Inventory
adequate to yield data of sufficient accuracy to meet the desired
objectives. If find rates or other data are required for subsets of
3. Physical Inventory Planning
the population, for example by organization, then sample sizes
3.1 General:
must be sufficient to yield data for those subsets with sufficient
3.1.1 A physical inventory is an assessment or audit. An
accuracy and precision to be valid and useful.
effective physical inventory provides information of value that
3.4.2 The population to be inventoried should be set at the
equals or exceeds the cost of the activity. For the results to be
beginning of the inventory period and “frozen.” New receipts
after the beginning of the period should not be included, nor
should items transferred or disposed be excluded, from physi-
1
This practice is under the jurisdiction of ASTM Committee E53 on Property
cal inventory reconciliation and statistics. Establish clear
Management Systems and is the direct responsibility of E53.01 on Process
Management. policies for removal of items from the populati
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