FASAB Federal Accounting Standards Advisory Board

Amendments to Accounting for

Property, Plant, and Equipment

- Definitional Changes -

Amending SFFAS No. 6 and SFFAS No. 8

 Accounting for Property, Plant, and Equipment

and

Supplementary Stewardship Reporting

Statement of Federal Financial Accounting Standards No. 11

October 1998

[Point of Contact: Rick Wascak, 202-512-7363, FAX 202-512-7366, email

wascakr.fasab@gao.gov.]
THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD

 The Federal Accounting Standards Advisory Board (FASAB or "the Board") was

established in October 1990 by the Secretary of the Treasury, the Director of the Office of

Management and Budget (OMB), and the Comptroller General. The nine-member Board was

created to consider and recommend accounting principles for the Federal Government.

 The Board communicates its recommendations by publishing recommended accounting

standards after considering the financial and budgetary information needs of congressional

oversight groups, executive agencies, and other users of Federal financial information. The

Board also considers comments from the public on its proposed recommendations, which are

published for comments as "exposure drafts." The Board's sponsors then decide whether to

adopt the recommendations. If they do, the standard is published by OMB and GAO and then

becomes effective.

 The following documents related to the establishment and mission of the Board are

available from the FASAB:

• "Memorandum of Understanding among the General Accounting Office, the

Department of the Treasury, and the Office of Management and Budget, on Federal

Government Accounting Standards and a Federal Accounting Standards Advisory

Board"

• "Mission Statement: Federal Accounting Standards Advisory Board"
Executive Summary i

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October 1998

EXECUTIVE SUMMARY

a The purpose of this Statement is to amend certain standards in

Statement of Federal Financial Accounting Standards No. 6,

Accounting for Property, Plant, and Equipment, (SFFAS No. 6),

which was issued in November 1995; and, Statement of Federal

Financial Accounting Standards No. 8, Supplementary

Stewardship Reporting, (SFFAS No. 8), which was issued in June

1996. The amendments specifically affect the definition in the

standards for Federal mission property, plant, and equipment

(PP&E) and the classification of space exploration equipment as

general PP&E in these two Statements.

b Rather than specifying types of PP&E, the original standards

defined Federal mission PP&E with a set of criteria. PP&E items

that met those criteria would be reported as Federal mission

PP&E. Those criteria, however, were subject to inconsistent

interpretations and appeared to be resulting in a broader

application of Federal mission PP&E than originally intended.

c To resolve this problem, the amendments eliminated the category

of Federal mission PP&E and created a new category for national

defense PP&E, which consists of: (1) the PP&E components of

weapons systems and support PP&E owned by the Department of

Defense or its component entities for use in the performance of

military missions, and (2) the vessels held in a preservation status

by the Maritime Administration's National Defense Reserve Fleet. 

As a result space exploration equipment shall be treated as

general PP&E.
Federal Accounting Standards Advisory Board

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Table of Contents iii

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TABLE OF CONTENTS

EXECUTIVE SUMMARY........................................................................................................... i

INTRODUCTION...................................................................................................................... 1

Purpose................................................................................................................................. 1

Background........................................................................................................................... 1

Effective date ........................................................................................................................ 2

AMENDMENTS TO SFFAS No. 6............................................................................................ 3

Introduction .......................................................................................................................... 3

National Defense

PP&E ..................................................................................................................................... 3

AMENDMENTS TO SFFAS No. 8............................................................................................. 8

Introduction.............................................................................................................................8

 National Defense

PP&E....................................................................................................................................... 8

APPENDIX A: BASIS FOR CONCLUSIONS............................................................................. 9

APPENDIX B: CROSS REFERENCES................................................................................... 17

APPENDIX C: GLOSSARY..................................................................................................... 19
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Introduction 1

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October 1998

INTRODUCTION

Purpose

1The purpose of this Statement is to amend certain standards contained

in Statement of Federal Financial Accounting Standards Number 6

(SFFAS No. 6), Accounting for Property, Plant, and Equipment,

and Statement of Federal Financial Accounting Standards Number

8 (SFFAS No. 8), Supplementary Stewardship Reporting.

2The amendments specifically affect the standards for:

• Federal mission property, plant, and equipment (PP&E) in SFFAS

No. 6, paragraphs 21 and 46 through 52, and in SFFAS No. 8,

paragraphs 52 through 59.

Background

3In SFFAS No. 6, Federal mission PP&E are defined as PP&E having at

least one characteristic from the group of characteristics related to

"use" and one characteristic from the group of characteristics

related to "useful life."

The "use" characteristics are:

• has no expected nongovernmental alternative uses; or

• is held for use in emergency, war, or natural disaster; or

• is specially designed for use in a program for which there is no

other program or entity (Federal or non-federal, governmental

or nongovernmental) using similar PP&E with which to compare

costs.

The "useful life" characteristics are:

• has an indeterminate or unpredictable useful life due to the

manner in which it is used, improved, retired, modified, or

maintained; or

• is at a very high risk of being destroyed during use or premature

obsolescence.
2 Introduction

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October 1998

The Board specifically identified two types of PP&E that met the

Federal mission PP&E definition: (1) the PP&E components of

national defense weapons systems, and (2) space exploration

equipment.

4Since SFFAS No. 6 was issued, however, many agencies have raised

questions about the applicability of the Federal mission PP&E

standard. Those questions indicate that the characteristics could

be interpreted by agencies in various ways and the resultant

applications could be either inconsistent or far broader than

originally intended. Some agencies held the view that the

characteristics are ineffectual as they would depend on subjective

judgment by financial statement preparers and auditors. To

prevent confusion, inconsistency, and unintended application, the

amendments replace the definition of Federal mission PP&E with

the definition of national defense PP&E and require that space

exploration equipment be accounted for and reported as general

PP&E.

Effective date

5The amending accounting standards in this statement are effective for

periods beginning after September 30, 1998, with earlier

implementation encouraged.
Amendments to SFFAS No. 6 3

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AMENDMENTS TO SFFAS No. 6

Introduction

6Accounting standards for national defense PP&E are presented in

paragraphs 8 through 14 that follow. The standards presented in

these paragraphs supersede designated paragraphs in SFFAS No.

6 as they relate to Federal mission PP&E. Other paragraphs in

SFFAS No. 6, which are not amended by this document, remain in

effect.

7Paragraphs 46 through 52 of SFFAS No. 6 are rescinded and replaced

by paragraphs 8 through 13 below. In addition, paragraphs 21, 53

and 55 of SFFAS No. 6 are amended by replacing the category

name "Federal mission property, plant, and equipment" with

"national defense property, plant and equipment." Paragraph 14

provides implementation guidance.

National Defense

PP&E

DEFINITION

8National defense property, plant, and equipment (PP&E) are (1) the

PP&E components of weapons systems and support PP&E owned

by the Department of Defense or its component entities for use in

the performance of military missions and (2) vessels held in a

preservation status by the Maritime Administration's National

Defense Reserve Fleet.

a "Weapons systems" are a combination of one or more weapons1 with

all related property, plant, equipment, materials, services,

personnel and means of delivery and deployment required for selfsufficiency.2

b "Military missions" are defined as the functions performed by the 

 

 

1Weapons are instruments of combat used to destroy, injure, defeat or threaten an enemy. Adapted from

Dictionary of Weapons and Military Terms.

 

2

Department of Defense Dictionary of Military and Associated Terms, Joint Publication 1-02, March 23,

1994.
4 Amendments to SFFAS No. 6

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Department of Defense or its component entities to prepare for the

effective pursuit of war and military operations short of war; to

conduct combat, peacekeeping, and humanitarian military

operations; and to support civilian authorities during civil

emergencies.

9 National defense PP&E components include: (a) Weapons Systems

PP&E, (b) Weapons Systems Support Principal End Items, (c)

Weapons Systems Support Real Property, and (d) Mission Support

PP&E. These components are intended to provide guidance in

identifying assets to be included in the overall national defense

PP&E category. There is no requirement to report on the assets

by component.

a Weapons Systems PP&E. Weapons systems PP&E is equipment

that launches, releases, carries, or fires a particular piece of

ordnance3 and/or carries weapons systems-related property,

equipment, materials, or personnel. Examples of weapons

systems PP&E include aircraft, ships, tracked combat vehicles,

and missiles.4 Ammunition and other types of munitions (i.e., small

and large caliber ammunition, rockets, grenades, mines, and other

explosives) should be excluded from this category.

b Weapons Systems Support Principal End Items. These are end

items5 and replacement assemblies6. These items are acquired to

support weapons systems and may ultimately be incorporated in

weapons systems. Examples of these items include aircraft

 

 

3

Ordnance is defined as explosives, chemicals, pyrotechnics, and similar stores, e.g., bombs, guns and

ammunition, flares, smoke, napalm. Department of Defense Dictionary of Military and Associated Terms, Joint

Publication 1-02, March 23, 1994.

 

4Missiles are unmanned, expendable, self-propelled flying vehicles with some form of guidance system that

allows it to steer towards, rather than be aimed at, the target. Included are surface-to-air, air-to-air, air-to-surface,

and surface to surface missiles.

 

5

An end item is defined as a final combination of end products, component parts, and/or materials that is

ready for its intended use, e.g., on a ship, tank, or aircraft. Adapted from Department of Defense Dictionary of

Military and Associated Terms, Joint Publication 1-02, March 23, 1994.

 

6

Replacement assembly is defined as an item forming a portion of an equipment, that can be provisioned and

replaced as an entity and which normally incorporates replaceable parts or groups of parts. Adapted from

Department of Defense Dictionary of Military and Associated Terms, Joint Publication 1-02, March 23, 1994.
Amendments to SFFAS No. 6 5

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engines, tank engines, aircraft radars, ship sonar, uninstalled

missile motors, missile control panels, gun mounts, gun turrets,

and guidance systems.

c Weapons Systems Support Real Property. Weapons Systems

Support Real Property is facilities and structures affixed to the land

that are integral to a weapons system. Weapons Systems Support

Real Property must be:

i. Of a permanent/fixed nature;

ii. Essential to the effective operation of a weapons system; and

iii. Currently utilized to support an active weapons system.

Examples include ammunition bunkers in active use and missile silos

in active use.

The land associated with Weapons Systems Support Real Property

shall not be included in this category. Land shall either be

classified as general PP&E or Stewardship land and accounted for

accordingly.

d Mission Support PP&E. Mission support PP&E is deployable7 PP&E

that:

i. Is essential to the effective operation of a weapons system or is

used by the Department of Defense or its component entities to

effectively perform their military missions;

ii. Has an indeterminate or unpredictable useful life8 due to the

manner in which it is used, improved, retired, modified, or

maintained; and

 

 

7

Possessing the characteristic of being positioned and ready for use in battle. Adapted from the Dictionary of

the Modern United States Military.

 

8

This may be evidenced by the ability (1) to retire the PP&E and later return it to service or (2) to continually

upgrade the PP&E to maintain its usefulness.
6 Amendments to SFFAS No. 6

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iii. Is at a very high risk of being destroyed during use or of

premature obsolescence.

Examples of mission support PP&E include: surveillance unmanned

air vehicles (UAVs), non-tactical vehicles (e.g., fuel tanker, combat

operations center, mess vehicles), field meteorological systems,

crypto systems, and field security systems.

10 Government Property in the Possession of Contractors. Property

and equipment in the possession of or acquired directly by the

Government and delivered or otherwise made available to a

contractor for use in accomplishing a contract is collectively

referred to as "Government property." Government property

should be accounted for based on the nature of the item

regardless of possession. For example, operating materials and

supplies remain operating materials and supplies subject to SFFAS

No. 3 standards; and general PP&E remains general PP&E subject

to SFFAS No. 6 standards.

11 National defense PP&E items may be delivered or otherwise

made available to a contractor either for repair or for other uses,

such as testing. These items are not to be excluded from national

defense PP&E simply because they are in the hands of the

contractors and are not being used directly by the Department of

Defense or its component entities.

12 Property Excluded. There are types of Government property that

generally do not meet the definition of national defense PP&E and,

therefore, are excluded. Examples of these types include:

Government Material - material which will become part of a

deliverable end item; Special Tooling - equipment and

manufacturing aids which are used in the development or

production of particular supplies or parts, or in the performance of

particular services; and Specialized Test Equipment - test

equipment which is used to accomplish special testing in

performing a contract.

13 Other Items Excluded. Other items that do not meet the PP&E

definition (pars. 17 through 20, SFFAS No. 6) are also excluded
Amendments to SFFAS No. 6 7

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from this category. For example, operating materials and supplies

and stockpiled materials should be accounted for in accordance

with SFFAS No. 3, Accounting for Inventory and Related Supplies.

IMPLEMENTATION GUIDANCE

14 For entities that implemented SFFAS No. 6 in prior years, any

adjustments caused by these amendments should be reflected

through a prior period adjustment.9

 

9SFFAS No.7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary

and Financial Accounting, paragraph 76.
8 Amendments to SFFAS No. 6

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AMENDMENTS TO SFFAS No. 8

Introduction

15 Accounting standards for national defense PP&E are presented

in paragraphs 16 through 18 that follow. The proposed standards

presented in these paragraphs supersede designated paragraphs

in SFFAS No. 8 as they relate to Federal mission PP&E. Other

paragraphs in SFFAS No. 8, which are not amended by this

document, remain in effect.

National Defense

PP&E

16 The category "Federal mission property, plant, and equipment"

referred to in paragraph 17, SFFAS No. 8 is replaced with "national

defense property, plant, and equipment."

17 The Standard inside the box on page 21 of SFFAS No. 8 is

amended by replacing the category name "Federal mission

property, plant, and equipment" with "national defense property,

plant and equipment." Paragraphs 52 through 59 of SFFAS No. 8

are rescinded.

DEFINITION

18 Refer to paragraphs 8 through 13 of this document.

The provisions of this statement need

not be applied to immaterial items.
Appendix A: Basis for Conclusions 9

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APPENDIX A: BASIS FOR CONCLUSIONS

19 This appendix summarizes the Board's considerations in

recommending modifications to amend SFFAS No. 6, Accounting

for Property, Plant, and Equipment, and SFFAS No. 8,

Supplementary Stewardship Reporting, as they relate to Federal

mission property, plant, and equipment (PP&E).

Background

20 The Board initially considered amendments to the definition of

Federal mission PP&E due to numerous requests for

interpretations to permit classifying certain property, plant, and

equipment as Federal mission PP&E. 

21 Based on review, presentations from affected entities, and

multiple deliberations by the Board, it decided to redefine and

rename Federal mission PP&E. This resulted in the elimination of

the characteristics related to the "use" and the "useful life" of

Federal mission PP&E and the classification of space exploration

equipment as general PP&E. The decisions by the Board to

redefine and rename Federal mission PP&E are discussed in the

following paragraphs.

Definition

SFFAS Nos. 6 and 8 Standards

22 The Board developed the Federal mission PP&E category for

"specific PP&E acquired to provide a unique good or service for

which there is not necessarily a periodic output against which to

match costs."10 The Board specifically identified the PP&E

components of weapons systems and space exploration

equipment for this category. However, the Board believed it

desirable to have "characteristics of Federal mission PP&E

because it recognizes that there are other types of PP&E, or PP&E

may be developed in the future that are similar to these two

 

 

10SFFAS No. 6, Accounting for Property, Plant, and Equipment, paragraph 128.
10 Appendix A: Basis for Conclusions

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items."11 The characteristics related to the "use" of the PP&E and

to the "useful life" when used as intended.

23 Experience with the characteristics, however, revealed that they

were creating confusion as to the appropriate use of the Federal

mission PP&E category. Therefore, through this amendment, the

Board strives to clarify which PP&E would be appropriate to

include in this category. Recognizing the limitation of criteria, the

Board sought more explicit means to limit the PP&E assignable to

the category. Since the type of activity in which the PP&E was

used would determine "whether there was a periodic output

against which to match costs", the Board specifically identified the

departments engaged in this type of activity. Thus, the new

definition of Federal mission PP&E should limit the category to the

PP&E components used in national defense.

Exposure Draft

24 In the development of a new definition for this classification of

PP&E, the definition was crafted to include only the PP&E

components of weapons systems and support PP&E owned by the

Department of Defense or its component entities 12 for use in the

performance of military missions. The DOD Board member and

DOD staff assisted the Board in shaping the proposed definition

by presenting DOD's definitions of specific types of assets that

might be weapons systems components and/or support PP&E. 

The Board used the definitions provided by the DOD as the

foundation for amending the definition of Federal mission PP&E. 

This was intended to assist in clarifying the definition and ease

implementation of the standards by using existing DOD

terminology where possible. Based on the new definition, the title

"Federal mission PP&E" was changed to "national defense PP&E"

to be more descriptive of what the standard was addressing.

 

 

11SFFAS No. 6., paragraph 129.

 

12The terminology "Department of Defense or its component entities" was deliberately chosen by the Board

because many other departments and agencies provide some support to national defense. However, as explained in

later paragraphs, the Board determined that predominant use should be considered and that cost accounting would

support allocation of cost among multiple missions.
Appendix A: Basis for Conclusions 11

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October 1998

25 In connection with the Board's deliberations, the Department of

Transportation (DOT) request for interpretation was addressed. 

DOT had requested that the Maritime Administration's National

Defense Reserve Fleet (NDRF) and certain US Coast Guard

vessels and aircraft also be considered national defense PP&E. 

The NDRF consists of ships held in a preservation status. They

are activated only during a military crisis or national emergency. 

Their predominant use is to provide supplemental shipping

capacity that the United States can rely on during a military crisis

or national emergency.

26 The Board deliberated this issue and agreed that because of the

NDRF's preservation status and predominant use (i.e., to provide

additional shipping capacity only during military missions such as a

military crisis or national emergency), that depreciation of the cost

of the ships was not meaningful. Therefore, the Board believes

the NDRF ships should also be considered national defense

PP&E.

27 The US Coast Guard presented very difficult issues for the Board

and considerable time was devoted to discussion of appropriate

treatment. The Coast Guard has an important role in National

defense readiness. By law, the Coast Guard may be called on to

participate in times of war or national emergency and is thus

considered in military strategic planning. In fact,, one of Coast

Guard's four missions is "military preparedness." However, the

Coast Guard has substantial ongoing responsibilities for three nondefense missions: maritime law enforcement, maritime safety, and

maritime environmental protection for which operating performance

is the primary reporting objective.

28 The Board believed that, conceptually, an allocation of the

acquisition cost of vessels (over 65 feet) and aircraft between

national defense PP&E and general PP&E would be appropriate

given their multiple uses. However, based on information provided

by Coast Guard, the Board determined that it would not be costbeneficial to allocate acquisition costs between the two categories

of PP&E. Ultimately, the definition of national defense PP&E was

written to exclude Coast Guard's vessels and aircraft.

29 The Board based this exclusion on the need to have cost
12 Appendix A: Basis for Conclusions

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information to support assessment of operating performance for

the three non-defense missions. The exclusion provides

consistency with the full cost standards provided in SFFAS No. 4,

Managerial Cost Accounting Concepts and Standards for the

Federal Government, and with the treatment of multi-use heritage

assets discussed in later paragraphs. The Board indicated that

meaningful information would result if the depreciation expense on

these multi-use Coast Guard assets was allocated to each of the

missions served by the PP&E. This approach would be consistent

with requirements in SFFAS No. 4 and OMB's Form and Content

for cost information by responsibility segments and programs.

30 Also, during the discussions on national defense PP&E, the

Board agreed to a request made by National Aeronautics and

Space Administration to remove space exploration equipment from

this category for the following reasons: 1) NASA needs cost

information in performing joint missions with other countries and in

billing both government and non-government entities for

reimbursable services performed by NASA, and 2) The function

performed by NASA with its space exploration equipment is not a

unique Government function similar to defense.

Board Decision on the Definition

31 Respondents to the ED were very supportive of the revised

definition. Recommended changes were few. 

• One respondent suggested that the Board add a category for

National defense PP&E held for destruction, sale or

abandonment. The Board did not adopt this

recommendation because it believes DOD has the flexibility

to identify this as a major class if separate reporting is

desired.

• Responses to a question posed on the appropriateness of

including ammunition and munitions in this PP&E category

were mixed. The Board decided to exclude it from the

definition. This decision is explained more fully in a later

section of this appendix.

• The Board did not receive any responses from departments or

agencies that believed the definition should be broadened
Appendix A: Basis for Conclusions 13

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to include additional PP&E.

The Board adopted the definition largely as it was presented in

the ED.

AMMUNITION AND

MUNITIONS

Background

32 In discussions relating to national defense PP&E, it was 

suggested that ammunition and munitions are not currently

addressed in the Federal financial accounting standards. 

Therefore, questions were posed in the ED's QUESTIONS FOR

RESPONDENTS asking how ammunition and munitions should be

categorized for accounting and reporting purposes. Definitions for

these items were presented in the ED and are presented below. 

No comments from respondents to the ED were received which

disputed or challenged their accuracy.

33 Ammunition. "Ammunition" is defined as a "device charged with

explosives, propellants, pyrotechnics, initiating composition, or

nuclear, biological or chemical material for use in connection with

defense or offense, including demolition." (from the Encyclopedia

of the U.S. Military)

34 Ammunition is portrayed as having the following characteristics:

• It is not held for sale at ammunition depots (unlike DoD

inventory, which is held for sale).

• It is held for use in a normal operating cycle or in reserve

for future use.

• It is not long-lived, it can be used or consumed only once.

35 Projectiles fired from a gun are the principal form of modern

ammunition. Projectiles are usually in the form of bullets or

artillery. Items commonly designated as ammunition include

small/medium caliber ammunition, mortar ammunition, tank
14 Appendix A: Basis for Conclusions

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ammunition, artillery ammunition, explosive mines, bombs,

torpedoes, and missiles. It should be noted that, while missiles

may be commonly designated as ammunition, they have been

included in the Weapons System PP&E (e.g., aircraft, ships,

tracked combat vehicles, and missiles. Paragraph 9 a) component

of national defense PP&E.

36 Munitions. "Munition" (singular) is defined as "a complete device

charged with explosives, propellants, pyrotechnics, initiating

composition, or nuclear, biological, or chemical material for use in

military operations, including demolitions." (from the Department of

Defense Dictionary of Military and Associated Terms) This

definition is almost exactly the same as the definition for

ammunition. Also, ammunition is referred to as munition (singular.)

37 Whereas, "munitions" (the plural of munition), is used in a broad

sense to refer to any and all supplies and equipment required to

conduct offensive and defensive war, including guns, machines,

ammunition, transport and fuel; but, excluding personnel and any

supplies and equipment used for purposes other than direct

military operations. In common usage, "munitions" (plural) can be

military weapons, ammunition, and equipment. (from the Dictionary

of Military Terms, A Guide to the Language of Warfare and Military

Institutions)

38 Based on feedback in comment letters for the ED, four options

for accounting and reporting ammunition and munitions were

considered by the Board. They were:

• Categorize it as operating materials for accounting and reporting

purposes.

• Categorize it so that it would be included in one of the

components of national defense PP&E.

• Categorize it so that it would be a separate and unique

component of national defense PP&E.

• Categorize it as a separate and unique asset recognized on the

balance sheet for accounting and reporting purposes.
Appendix A: Basis for Conclusions 15

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39 During deliberations by the Board, it was noted that ammunition

and munitions, although not specifically identified in the standard,

were considered an item of operating materials and supplies in the

development of SFFAS No. 3. SFFAS No. 3 was developed

through full due process and considered some unique operating

requirements of DOD. Included were provisions to categorize

operating materials and supplies between those used in a normal

operating cycle, those held in reserve for future use, and excess

and obsolete items. Provisions to use the purchases method of

accounting, instead of the consumption method of accounting,

were also included in the standards. That is, if the items are not

significant amounts, they are in the hands of the end user for use

in normal operations, or it is not cost-beneficial to apply the

consumption method.

40 Those respondents to the ED who addressed the issue were

generally more in favor of categorizing ammunition and munitions

as some component of national defense PP&E. Their argument

was that ammunition and munitions are essential to the operations

of or an integral part of weapons systems. Therefore, it seemed to

these respondents that the information provided about national

defense PP&E and ammunition and munitions should be the

same.

41 The Board, however, did not agree with this argument and

decided that ammunition and munitions should be categorized as

operating materials and supplies. By categorizing ammunition and

munitions as operating materials and supplies, the cost of these

items would be recognized in the period they were consumed

unless the conditions described in paragraph 40 of SFFAS No. 3

were met. The Board also noted that by following SFFAS No. 3 for

ammunition and munitions, entities would provide similar treatment

for the consumable items used each period such as training

supplies and fuel.
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Appendix B: Cross References 17

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APPENDIX B: CROSS REFERENCES

FROM PARAGRAPHS IN SFFAS NO. 6 AND NO. 8

TO PARAGRAPHS IN THESE AMENDMENTS

Table I: References Related to Standards in SFFAS No. 6

PAR. NUMBERS IN SFFAS NO 6 STATUS AND REFERENCE TO

PARAGRAPHS IN THESE

AMENDMENTS

PP&E categories, par. 21, 53 and 55 Par. 7

Federal mission PP&E, par. 46 through 52 Par. 8 through 13

All other paragraphs in SFFAS No. 6 Not changed

Table II: References Related to Standards in SFFAS No. 8

PAR. NUMBERS IN SFFAS NO 8 STATUS AND REFERENCE TO PARAGRAPHS

IN THESE AMENDMENTS

The category name Federal mission property,

plant, and equipment" in paragraph 17 is replaced

with "national defense property, plant, and

equipment."

Par. 16

The Standard inside the box on page 21 of

SFFAS No. 8 is amended by replacing the

category name "Federal mission property, plant,

and equipment" with "national defense property,

plant and equipment."

Par. 17

All other paragraphs in SFFAS No. 8 Not changed
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Appendix C: Glossary 19

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APPENDIX C: GLOSSARY

AMMUNITION - A generic term that includes a great variety of devices designed and

constructed to inflict damage upon enemy personnel or material by action of an explosive,

pyrotechnic, or chemical agent.

ASSETS - Tangible or intangible items owned by the federal government which would have

probable economic benefits that can be obtained or controlled by a federal government entity.

(Adapted from Financial Accounting Standards Board, Statement of Concepts No. 6,

Elements of Financial Statements, and Kohler's Dictionary for Accountants.)

GENERAL PROPERTY, PLANT, AND EQUIPMENT (PP&E) - PP&E used to provide

government services or goods. The cost of general PP&E is capitalized, i. e. recorded as

assets on the balance sheet. For detailed characteristics of and accounting for general PP&E,

see paragraphs 23 through 34, SFFAS No. 6.

MILITARY MISSIONS - Functions performed by the Department of Defense or its component

entities to prepare for the effective pursuit of war and military operations short of war; to

conduct combat, peacekeeping, and humanitarian military operations; and to support civilian

authorities during civil emergencies. 

NATIONAL DEFENSE PROPERTY, PLANT, AND EQUIPMENT (PP&E) - The PP&E

components of weapons systems and support PP&E owned by the Department of Defense or

its component entities for use in the performance of military missions, and vessels held in a

preservation status by the Maritime Administration's National Defense Reserve Fleet.

PRINCIPAL END ITEMS - End Items and replacement assemblies acquired to support

weapons delivery systems and may ultimately be incorporated as integral parts in a weapons

delivery system. An end item is a final combination of end products, component parts, and/or

materials that is ready for its intended use. Replacement assembly is an item forming a

portion of an equipment that can be provisioned and replaced as an entity and which normally

incorporates replaceable parts or groups of parts.

SPACE EXPLORATION EQUIPMENT - Items that are intended to operate above the

atmosphere to explore space and any specially designed equipment to aid, service or operate

other equipment engaged in exploring space. 

STEWARDSHIP - The Federal Government's responsibility for the general welfare of the

nation in perpetuity.
20 Appendix C: Glossary

Federal Accounting Standards Advisory Board

Amendments to Accounting for PP&E

October 1998

USEFUL LIFE - The normal operating life in terms of utility to the owner.

WEAPONS - Instruments of combat used to destroy, injure, defeat or threaten an enemy.

(adapted from Dictionary of Weapons and Military Terms)

WEAPONS SYSTEMS - A combination of one or more weapons with all related property,

plant, equipment, materials, services, personnel and means of delivery and deployment

required for self-sufficiency. (Joint Chiefs of Staff, Department of Defense Dictionary of Military

and Associated Terms, Joint Publication 1-02, Mar. 23, 1994.)
FASAB Board Members

David Mosso, Chairman

Dr. Linda J. Blessing

James L. Blum

Philip T. Calder

Donald H. Chapin

Norwood J. Jackson

Gerald Murphy, through September 3, 1998

Donald Hammond, from September 4, 1998

James E. Reid

Nelson E. Toye

Wendy M. Comes, Executive Director

Project Staff:

Rick Wascak

Richard Mayo

Andrea Palmer

Special Assistance Provided by Steve Tabone, Department of Defense

Federal Accounting Standards Advisory Board

441 G Street N.W.

Suite 3B18

Washington, DC 20548

Telephone (202) 512-7350

FAX (202) 512-7366

www.financenet.gov/fasab.htm