ASTM E2131-16(2022)

This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the
Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
Designation: E2131 − 16 (Reapproved 2022)
Standard Practice for
Addressing and Reporting Losses of Tangible Property
This standard is issued under the fixed designation E2131; 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.
1. Scope E2279 Practice for Establishing the Guiding Principles of
Property Asset Management
1.1 This practice focuses on addressing and reporting losses
E2378 Practice for the Recognition of Impaired or Retired
of tangible property.
Property Assets
1.2 Loss occurrences are key aspects of risk management.
E2608 Practice for Equipment Control Matrix (ECM)
Projecting the possibility or probability of losses, discovering,
E3015 Guide for Management of Customer-Owned Property
disclosing, reporting, managing, and minimizing losses to a
Assets in Possession of Supplier, Contractor or Subcon-
reasonable extent is a critical economic factor in the success of
tractor
the owning or holding entity. This practice also establishes 3
2.2 ISO Standard:
acceptable levels of losses.
ISO 31000 Risk Management
1.3 Losses are often discovered as a result of an occurrence,
2.3 Federal Standard:
a physical inventory, property custodian or entity self-
FAR Federal Acquisition Regulations
assessment, or external audit.An actual loss occurrence can be
2.4 Other Document:
at any time during the property life cycle.
Risk Management Guide for DOD Acquisition, Sixth Edi-
tion
1.4 Assessing and determining financial liability for losses
isnotaddressedinthispractice;suchassessmentsaregenerally
3. Terminology
subject to individual contracts or other arrangements.
3.1 Definitions—For definitions relating to property and
1.5 This standard does not purport to address all of the
asset management, refer to Terminology E2135.
safety concerns, if any, associated with its use. It is the
3.2 Definitions of Terms Specific to This Standard:
responsibility of the user of this standard to establish appro-
3.2.1 acquisition cost, n—cost to buy goods, services, or
priate safety, health, and environmental practices and deter-
assets, minus discounts and adding relevant costs based upon
mine the applicability of regulatory limitations prior to use.
accounting standards.
1.6 This international standard was developed in accor-
3.2.2 entity, n—an agency, company, or institution.
dance with internationally recognized principles on standard-
ization established in the Decision on Principles for the
3.2.3 equipment, n—tangible item that is functionally com-
Development of International Standards, Guides and Recom-
plete for its intended purpose, durable, nonexpendable, and
mendations issued by the World Trade Organization Technical
needed for the performance of a contract. Equipment is not
Barriers to Trade (TBT) Committee.
intended for sale, and does not include material, real property,
special test equipment, or special tooling. FAR Part 45
2. Referenced Documents
3.2.4 loss of property, n—unintended, unforeseen or acci-
2.1 ASTM Standards:
dental loss, damage, or destruction of property that reduces the
E2132 Practice for Inventory Verification: Electronic and
expected economic benefits of the property.
Physical Inventory of Assets
3.2.4.1 Discussion—Loss of property does not include oc-
E2135 Terminology for Property and Asset Management
currences such as purposeful destructive testing, obsolescence,
normal wear and tear, or manufacturing defects. Loss of
1 property includes, but is not limited to:
This practice is under the jurisdiction of ASTM Committee E53 on Asset
Management and is the direct responsibility of Subcommittee E53.04 on Reutiliza-
tion and Disposal.
Current edition approved Aug. 1, 2022. Published August 2022. Originally Available from National Institute of Standards and Technology (NIST), 100
approved in 2001. Last previous edition approved in 2016 as E2131-16. DOI: Bureau Dr., Stop 1070, Gaithersburg, MD 20899-1070, http://www.nist.gov.
10.1520/E2131-16R22. Available from https://www.acquisition.gov/.
2 5
For referenced ASTM standards, visit the ASTM website, www.astm.org, or Available from Defense Acquisition University, 9820 Belvoir Road, Fort
contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM Belvoir, VA 22060,
Standards volume information, refer to the standard’s Document Summary page on https://www.dau.edu/cop/pqm/DAU%20Sponsored%20Documents/
the ASTM website. 2006%20RM%20Guide%204%20Aug%2006Final.doc.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
E2131 − 16 (2022)
(1) Items that cannot be found after a reasonable search; the property’s owner and an internal corrective action request
(2) Theft; being issued.The timing and the resources used to locate items
(3) Damage resulting in unexpected harm to property not found is determined upon the facts and circumstances of
requiring repair to restore the item to usable condition; or the situation, including costs, schedule, criticality of identified
(4) Destruction resulting from incidents that render the use and business rhythm. In any event, practices and cost
item useless for its intended purpose or beyond economical should remain reasonable.
repair, and
3.2.8 reasonable, n—actionisreasonableif,initsnatureand
(5) Significant loss variances beyond contractual arrange-
amount, it does not exceed that which would be incurred by a
ments within a material management and accounting system.
prudent person in the conduct of competitive business.
Adapted from FAR Part 45.101
Adapted from FAR Part 31
3.2.5 low-risk property, n—assets that are monitored and
3.2.9 representation, n—statement made by one of two
controlled at the discretion of asset managers and typically
contracting parties to the other, before or at the time of making
consists of low risk tagged items, for example children of
the contract, in regard to some fact, circumstance, or state of
equipment,specialtools,andchildrenofspecialtestequipment
facts pertinent to the contract, which is influential in bringing
valued under $5000, excluding sensitive, controlled, customer
about the agreement. Black’s Law Dictionary
serially managed, or mission essential property.
3.2.10 risk, n—concept that denotes a potential negative
3.2.5.1 Discussion—Low-risk property does not include
impact.
expendable or expended material—in that these items are
3.2.11 risk assessment, n—determination of quantitative or
expected to be depleted during performance. (Be aware, the
qualitative value of risk related to a concrete situation and a
$5000 threshold may be increased based upon internal policy
recognized threat.
or arrangements with customers.) The definition and manage-
ment of low-risk property should be included in the entity’s
3.2.12 risk management, n—structured approach to manag-
property plan and procedures. Many factors may contribute for
ing uncertainty through risk assessment, developing strategies
an item to be determined low risk. For example, a $700.00
tomanageit,andmitigationofriskusingmanagerialresources.
laptop computer with its data appropriately encrypted and its
3.2.12.1 Discussion—A good primer on risk management
essentialdataproperlybackedupshouldbealow-riskproperty
that should be considered is the Risk Management Guide for
item. If, on the other hand, this item’s data are not encrypted or
DOD Acquisition.
backedup,itisprobablynotlow-riskpropertyandasitmaybe
sensitive property. Within a property plan, when discussing
4. Summary of Practice
low-risk or low-value property, entities may establish different
4.1 This practice pertains to the reporting of losses of
thresholds for entity property versus customer property.
tangible property. Owners of property are entitled to be
3.2.6 normal wear and tear, n—wear on a property item that
properly and accurately notified of losses to or of their
takes place with normal or reasonable use for which the item is
property. These reports are important for accounting, possible
intended or provided.
replacement, recovery, and managerial and owner decision
3.2.7 not found status, n—status of an item during an
making. For internal control purposes, accurate reporting is
inventory, or otherwise, that has not been located and a
necessary to achieve effective and efficient operations, reliable
reasonable reconciliation or search has not been performed and
financial and operational reporting, and compliance to appli-
thisdeterminationofwhenanitemchangesfroma“notfound”
cable laws and regulations.
status to a “loss” status is made by asset managers based upon
4.2 This practice recognizes the process by which an item is
facts,circumstances,schedule,materiality,andtheprofessional
neither accounted for nor lost but in a not found status until the
judgment and certainty of the asset manager.
item is found or determined lost.
3.2.7.1 Discussion—Items in a not found status (frequently
referred to with like type terms (for example, missing and
5. Significance and Use
cannot locate) are not a loss, nor should clerical errors or
5.1 Losses of property are indicators of the effectiveness of
omissions be reported as a loss
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