ASTM E833-09a

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Designation:E833–09a
Standard Terminology of
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Building Economics
This standard is issued under the fixed designation E833; 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 base time, n—thedatetowhichallfutureandpastbenefitsand
costs are converted when a present value method is used
1.1 This terminology relates to the economic evaluation of
(usually the beginning of the study period) (syn. base date).
building construction as used in other standards under the
baseline laborhourbudget, n—a budget of direct labor hours
jurisdiction of ASTM Committee E06 on Performance of
created at the onset of a new construction project that
Buildings, and it does not necessarily correspond to the
approximates how many hours will be spent on any defined
terminology used in other areas of accounting and economics.
part of the project.
2. Referenced Documents
DISCUSSION—Thebudgetedhoursarefirstassignedtothetasksonthe
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2.1 ASTM Standards:
project, and can be summed to determine budgeted hours for any cost
code or for the entire project.
E2691 Practice for Job Productivity Measurement
baseline plan, n—an established scope, cost, schedule, and
3. Terminology
technical performance plan against which the status of
adjusted internal rate-of-return (AIRR), n—the compound
resources and the effort of the overall program or project
rate of interest that, when used to discount the terminal
activities are measured, assessed, and controlled.
values of costs and benefits of a project over a given study
benefit-cost analysis, n—a method of evaluating projects or
period, will make the costs equal the benefits when cash
investments by comparing the present value or annual value
flows are reinvested at a specified rate (syn. financial
of expected benefits to the present value or annual value of
management rate of return (FMRR)).
expected costs.
allowance, n—in construction design planning and estimating,
benefit-to-cost ratio (BCR), n—benefits divided by costs,
an allocation of money that is intended to be spent for a
where both are discounted to a present value or equivalent
specific purpose.
uniform annual value (syn. benefit-cost ratio).
break even analysis, n—a technique for determining that
DISCUSSION—An allowance is used in the absence of precise knowl-
value of a variable which results in benefits (savings) just
edge, and estimated, to be of one’s knowledge, to ensure a full and
complete estimate. Allowances cover events and activities that are equal to costs.
normally directly controllable within a project plan.
building decision, n—a decision regarding the design, financ-
ing, engineering, construction, management, or operation of
annual value, n—a uniform annual amount equivalent to the
a building.
project costs or benefits taking into account the time value of
building economics, n—the application of economic analysis
money throughout the study period (syn. annual worth,
to the design, financing, engineering, construction, manage-
equivalent uniform annual value).
ment, operation, ownership, or disposition of buildings.
annual worth, n—See annual value.
building system, n—an aggregation or assemblage of items
annually recurring costs, n—those costs that are incurred in
joined in regular interaction or interdependence in buildings
a regular pattern each year throughout the study period.
or building construction.
base date, n—See base time.
capital cost, n—the costs of acquiring, substantially improv-
ing, expanding, changing the functional use of, or replacing
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This terminology is under the jurisdiction of ASTM Committee E06 on
a building or building system.
Performance of Buildings and is the direct responsibility of Subcommittee E06.81
cash flow, n—the stream of monetary (dollar) values—costs
on Building Economics.
and benefits—resulting from a project investment.
Current edition approved Nov. 1, 2009. Published March 2010. Originally
approved in 1981. Last previous edition approved in 2009 as E833 – 09. DOI:
certainty equivalent technique, n—a technique used to adjust
10.1520/E0833-09A.
economic measures of project worth to reflect risk exposure
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For referenced ASTM standards, visit the ASTM website, www.astm.org, or
and risk attitude.
contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM
Standards volume information, refer to the standard’s Document Summary page on
the ASTM website.
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E833–09a
DISCUSSION—Estimated project returns are multi
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