ASTM E2453-19

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Designation: E2453 − 13 E2453 − 19
Standard Practice for
DeterminingEstimating the Life-Cycle Cost of Ownership of
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Personal PropertyProperty Assets
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 purpose of this practice is to establish organizational processes to achieve on
high-value property assets the outcome of reliable reporting of the life-cycle cost of property assets
for good decision-making purposes. Historically, and frequently, the financial and property manage-
ment 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. There are more
appropriate models than the historical model for valuing property. or historical cost of the item(s).
Unfortunately, when only acquisition cost is considered rather than an estimated life-cycle cost of
ownership, users may find other operating costs were not considered and a new item may be too
expensive or inconvenient to use. If operating cost is substantially less, management may take the
opportunity to plan and make further operational adjustments. Better asset management decisions are
made when estimated life-cycle costs are considered along with the acquisition cost. 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 (actual or estimated) 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 that helps management make
more informed and better acquisitions decisions.
1. 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 seek 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 movable assets including:in-
cluding customer-supplied assets, rental/leased assets, contract/project direct-purchased assets, or expense items.
1.3 Asset service lives can be divided into three distinct stages, each with several separate yet interrelated substages: acquisition,
utilization, and disposition. These primary stages are not intended to be all encompassing, all-encompassing but are offered as the
basis for establishing LCC.
1.4 This practice is expected to be primarily used for considering the life-cycle cost of personal property, however, the concept
can and should be used for various types of assets including personal, real, tangible, and intangible.
1.5 This practice does not supersede applicable generally accepted accounting principles but is intended to be consistent with
the accounting principles particularly in the area of internal controls (see the GAO Green Book) and processes and requirements
for estimating. Some life-cycle cost estimating may be required for accounting purposes. (See AS 2501.)
1.6 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 safety, health, and healthenvironmental practices and to determine the
applicability of regulatory limitations prior to use.
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This practice is under the jurisdiction of ASTM Committee E53 on Asset Management and is the direct responsibility of Subcommittee E53.03 on Financial Management.
Current edition approved July 15, 2013May 1, 2019. Published July 2013June 2019. Originally approved in 2005. Last previous edition approved in 20052013 as
E2453–05.–13. DOI: 10.1520/E2453–13.10.1520/E2453–19.
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