Accounting for property, plant, and equipment Federal Financial

This is the original Standard file; please check for the most recent update in the FASAB Handbook at www.fasab.gov/pdffiles/handbook_sffas_6.pdf. Accounting for property, plant, and equipment Federal Financial Accounting Standards no. 6 ************************************************** Federal Accounting Standards Advisory Board (FASAB) ACCOUNTING FOR PROPERTY, PLANT, AND EQUIPMENT Statement of Federal Financial Accounting Standards No. 6 JUNE 1996 GPO # 041-001-00462-9 ($6.50) ************************************************** [NOTE 1: THE FOOTNOTES INCLUDED IN THIS DOCUMENT ARE OFTEN CRITICAL TO UNDERSTANDING THE STANDARDS. DUE TO THE LIMITATIONS ON TEXT PRESENTATION THE FOOTNOTES ARE PRESENTED AS ENDNOTES. PLEASE BE SURE TO REFER TO THESE ENDNOTES AS YOU REVIEW THE STANDARDS.] ************************************************** EXECUTIVE SUMMARY a This statement contains accounting standards for Federally owned property, plant, and equipment (PP&E); deferred maintenance on

PP&E; and cleanup costs. Each standard is summarized below. PROPERTY, PLANT, AND EQUIPMENT b The Federal Government's investment in PP&E exceeds $1 trillion [SEE NOTE 1] PP&E used for many different purposes. "PP&E" is defined as follows: Tangible assets that (1) have an estimated useful life of 2 or more years, (2) are not intended for sale in the ordinary course of business, and (3) are intended to be used or available for use by the entity. This is the original Standard file; please check for the most recent update in the FASAB Handbook at www.fasab.gov/pdffiles/handbook_sffas_6.pdf. c The diversity among Federal PP&E creates a need for meaningful categories of PP&E with different accounting standards for each category. The Board identifies four categories of PP&E. The categories are: - general PP&E are PP&E used to provide general government services or goods; - Federal mission PP&E are PP&E exhibiting specific characteristics set by the Board; - heritage assets are those assets possessing significant educational, cultural, or natural characteristics; and - stewardship land [SEE NOTE 2] (i.e., land other than that included in general PP&E). d Complete accounting standards for general PP&E are included in this document. e Federal mission PP&E, heritage assets, and stewardship land are the subject of a project on "Supplementary Stewardship Reporting." An exposure draft (ED) on this topic was issued in August 1995. The Supplementary Stewardship Reporting ED proposes accounting standards for these assets after their acquisition. The accounting standards in this document address (1) classification of PP&E in the categories, (2) accounting for the acquisition cost of PP&E falling into one of these three categories, and (3) implementation of these standards where it affects the basic financial statements. Because Federal mission PP&E, heritage assets, and stewardship land would be subject to supplementary stewardship reporting, they are referred to collectively as stewardship PP&E. This term is used for convenience only since each category has its own definition. GENERAL PP&E f The general PP&E category consists of items This is the original Standard file; please check for the most recent update in the FASAB Handbook at www.fasab.gov/pdffiles/handbook_sffas_6.pdf. that: - could be used for alternative purposes (e.g., by other Federal programs, state or local governments, or non-governmental entities) but are used by the Federal entity to produce goods or services, or to support the mission of the entity; or - are used in business-type activities; [SEE NOTE 3] or -...

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