Statement of Federal Financial Accounting Standards 35 

October 14, 2009 

Estimating the Historical Cost of General Property, Plant, and 

Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23 

Federal Accounting Standards Advisory Board 
Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

THE FEDERAL ACCOUNTING STANDARDS ADVISORY BOARD 

The Secretary of the Treasury, the Director of the Office of Management and Budget (OMB), 

and the Comptroller General, established the Federal Accounting Standards Advisory Board 

(FASAB or “the Board”) in October 1990. FASAB is responsible for promulgating accounting 

standards for the United States Government. These standards are recognized as generally 

accepted accounting principles (GAAP) for the Federal Government. 

An accounting standard is typically formulated initially as a proposal after considering the 

financial and budgetary information needs of citizens (including the news media, state and local 

legislators, analysts from private firms, academe, and elsewhere), Congress, Federal 

executives, Federal program managers, and other users of Federal financial information. The 

proposed standards are published in an exposure draft for public comment. In some cases, a 

discussion memorandum, invitation for comment, or preliminary views document may be 

published before an exposure draft is published on a specific topic. A public hearing is 

sometimes held to receive oral comments in addition to written comments. The Board considers 

comments and decides whether to adopt the proposed standard with or without modification. 

After review by the three officials who sponsor FASAB, the Board publishes adopted standards 

in a Statement of Federal Financial Accounting Standards. The Board follows a similar process 

for Statements of Federal Financial Accounting Concepts, which guide the Board in developing 

accounting standards and formulating the framework for Federal accounting and reporting. 

Additional background information is available from the FASAB or its website: 

• “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”, Exposure drafts, 

Statements of Federal Financial Accounting Standards and Concepts, FASAB newsletters, and 

other items of interest are posted on FASAB’s website at: www.fasab.gov. 

Federal Accounting Standards Advisory Board 

441 G Street, NW, Suite 6814 

Mail stop 6K17V 

Washington, DC 20548 

Telephone 202-512-7350 

FAX – 202-512-7366 

www.fasab.gov

This is a work of the U.S. Government and is not subject to copyright protection in the United 

States. It may be reproduced and distributed in its entirety without further permission from 

FASAB. However, because this work may contain copyrighted images or other material, 

permission from the copyright holder may be necessary if you wish to reproduce this material 

separately. 
Summary 3

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

Summary 

This standard amends Statement of Federal Financial Accounting Standard (SFFAS) 6, 

Accounting for Property, Plant, and Equipment, which was issued in November 1995. SFFAS 6 

provides implementation guidance and permits estimation of the amount to be capitalized but is 

not specific regarding allowable methods of estimation. 

This standard also amends SFFAS 23, Eliminating the Category National Defense Property, 

Plant, and Equipment, which was issued in May 2003. SFFAS 23 provides guidance for 

estimating historical cost and accumulated depreciation consistent with SFFAS 6, as amended, 

but offers more detail regarding permissible documentation and methods. 

This standard clarifies that reasonable estimates of original transaction data historical cost may 

be used to value general property, plant, and equipment (G-PP&E). The use of reasonable 

estimates is available to reporting entities that have not previously prepared financial reports but 

who may be required or elect to do so in the future and do not yet have adequate controls or 

systems to capture these costs. In addition, these amendments also apply in those cases where 

entities have decided to use estimates to determine the historical cost values of G-PP&E. 
Table of Contents 4

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

Table of Contents 

Summary......................................................................................................................... 3

Table of Contents............................................................................................................ 4

Introduction ..................................................................................................................... 5

Purpose ....................................................................................................................... 5

Materiality .................................................................................................................... 6

Effective Date .............................................................................................................. 6

Accounting Standard....................................................................................................... 7

Scope .......................................................................................................................... 7

Estimation of G-PP&E Historical Cost ......................................................................... 7

Adjustment to Cumulative Results of Operations ........................................................ 9

Appendix A: Basis for Conclusions ............................................................................... 11

Project History ........................................................................................................... 11

Initial Proposal for Implementation Guidance ............................................................ 12

Member Views........................................................................................................... 12

Exposure Draft........................................................................................................... 15

Board Approval.......................................................................................................... 16

Appendix B: Abbreviations ............................................................................................ 17
Introduction 5

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

 

Introduction 

Purpose 

1. Statement of Federal Financial Accounting Standard (SFFAS) 6, Accounting 

for Property, Plant, and Equipment, was effective for periods beginning after 

September 30, 1997. SFFAS 6 provides implementation guidance and 

permits estimation of the amount to be capitalized but is not specific 

regarding allowable methods of estimation. SFFAS 23, Eliminating the 

Category National Defense Property, Plant, and Equipment, provides 

guidance for estimating historical cost and accumulated depreciation 

consistent with SFFAS 6, as amended, but offers more detail regarding 

permissible documentation and methods. SFFAS 23 was issued May 8, 

2003, and became effective in fiscal year 2003. 

2. This standard amends SFFAS 6 and 23 to clarify that reasonable estimates 

of original transaction data historical cost may be used to value G-PP&E. 

The objective of this amendment is to establish a cost effective method to 

comply with SFFAS 6. The use of reasonable estimates is available to 

reporting entities that have not previously prepared financial reports but who 

may be required or elect to do so in the future and do not yet have adequate 

controls or systems to capture these costs. In addition, these amendments 

also apply in those cases where entities have decided to use estimates to 

determine the historical cost values of general property, plant, and 

equipment (G-PP&E). 

3. Note that this amendment will not extend the effective date1

 of SFFAS 6 as 

amended, but will clarify that methods deemed acceptable by SFFAS 23 

continue to be acceptable. This amendment to SFFAS 6 clarifies that it is 

acceptable to use estimates to approximate the historical cost values of GPP&E. 

4. The Board encourages those federal entities that use estimates to 

approximate the historical cost values of G-PP&E to establish processes 

and practices (i.e., adequate systems and internal control practices) for 

future acquisitions that will capture and sustain transaction based data that 

meet the G-PP&E historical cost valuation requirements. 

1

 Thus, entities must comply with the provisions of SFFAS 6 as amended in order to obtain an unqualified 

audit opinion. This ensures comparability among federal reporting entities receiving unqualified audit 

opinions. 
Introduction 6

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

Materiality 

5. The provisions of this Statement need not be applied to immaterial items. 

The determination of whether an item is material depends on the degree to 

which omitting or misstating information about the item makes it probable 

that the judgment of a reasonable person relying on the information would 

have been changed or influenced by the omission or the misstatement. 

Effective Date 

6. The Statement will be effective upon issuance to ensure that any cost savings 

available are realized as soon as possible. 
Accounting Standard 7

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

Accounting Standard 

Scope 

7. This Statement amends SFFAS 6 and 23 to provide for reasonably 

estimating the historical cost and accumulated depreciation of G-PP&E. 

8. This Statement is also applicable to internal use software when the software 

meets the criteria for G-PP&E in accordance with SFFAS 10, Accounting for 

Internal Use Software, and provides for reasonably estimating the historical 

cost and accumulated amortization of that G-PP&E. 

Estimation of G-PP&E Historical Cost 

9. This standard amends SFFAS 6 and 23 to clarify that reasonable estimates 

of original transaction data historical cost may be used to value G-PP&E. 

Reasonable estimates may be used upon initial capitalization as entities 

implement G-PP&E accounting for the first time, as well as by those entities 

who previously implemented G-PP&E accounting. 

10. This standard clarifies that federal entities should report their G-PP&E 

based on historical cost information in accordance with the asset recognition 

and measurement provisions of SFFAS 6, as amended. However, 

reasonable estimates of historical cost may be used to value G-PP&E 

assets. 

11. This standard also allows the use of reasonable estimates when an entity 

determines it is necessary to revalue G-PP&E assets previously reported. 

12. The text of SFFAS 6, par. 40 and 45, and SFFAS 23, par. 10 through 18, is 

amended as shown below (original paragraph numbers are retained). 

(SFFAS 6) 

[40.] Although the measurement basis for valuing G-PP&E remains historical 

cost, reasonable estimates may be used to establish the historical cost of 

existing G-PP&E, in accordance with the asset recognition and 

measurement provisions herein. For existing general PP&E, if historical cost 

information necessary to comply with the above recognition and 

measurement provisions has not been maintained, estimates of historical 
Accounting Standard 8

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

cost are required. Estimates may shall be based on: 

• cost of similar assets at the time of acquisition, or

• current cost of similar assets discounted for inflation since the time of 

acquisition (i.e., deflating current costs to costs at the time of acquisition by 

general price index), or

• other reasonable methods, including those estimation methods specified 

in SFFAS 23 paragraph 12. 

Disclosure Requirements

 [45.] The following are minimum general G-PP&E disclosure requirements: 

 

 • the cost, associated accumulated depreciation, and book value by major 

class; 

 • the use and general basis of any estimates used;

 • the estimated useful lives for each major class; 

 • the method(s) of depreciation for each major class; 

 • capitalization threshold(s) including any changes in threshold(s) during 

the period; and 

 • restrictions on the use or convertability of general G-PP&E. 

(SFFAS 23) 

[10.] The initial capitalization amount for G-PP&E assets previously 

considered ND PP&E should be based on historical cost in accordance with 

the asset recognition provisions of SFFAS 6, as amended, and should be the 

initial historical cost for the base unit4A items, including any major 

improvements or modifications. 

[11.] This standard recognizes that determining initial historical cost for items 

acquired many years prior to the effective date of this standard in an 

environment in which the historical records were not required to be retained 

and may therefore be inadequate not be reasonable or practical. 

[12.] When establishing the historical cost of existing G-PP&E, in accordance 

with the asset recognition and measurement provisions of SFFAS 6, as 

 

4A "Base unit" refers to the level of detail considered in categorizing PP&E. Generally, the base unit is the smallest or least expensive item of 

property to be categorized. The term "base unit" may be used by others to have a different meaning--the meaning intended in this standard is 

limited to that specified above [from SFFAS 6 fn 25].
Accounting Standard 9

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

amended, reasonable estimates may be used. If obtaining initial historical 

cost is not practical, estimated historical cost may be used. Estimates may 

be based on Other information such as, but not limited to, budget, 

appropriations, or engineering documents, contracts, or and other reports 

reflecting amounts to be expended may be used as the basis for reasonably 

estimating historical cost. 

[13.] Alternatively, estimates of historical cost may be derived by estimating 

the current replacement costs of similar items and deflating those costs, 

through the use of price-level indexes, to the in-service acquisition year or 

estimated in-service acquisition year if the actual in-service year is unknown. 

Other reasonable approaches for estimating historical cost may also be 

utilized. For example, latest acquisition cost may be substituted for current 

replacement cost in some situations. 

[13A.] In estimating the year that the base unit was placed in service, if only 

a range of years can be identified then the mid-point of the range is an 

acceptable estimate of the in-service date. 

[14.] A contra asset account--accumulated depreciation--for the assets 

should be calculated under the provisions provided in paragraphs 41, 42, 

and 43 of SFFAS 6, as amended. 

[15.] For military equipment that is eligible for capitalization in service upon 

implementation of under this standard, cleanup cost liabilities should be 

adjusted, as needed.5 

Adjustment to Cumulative Results of Operations 

[16.] Initial application Changes to previously reported G-PP&E amounts 

resulting from the application of this standard by an entity previously 

reporting G-PP&E should be treated as a corrections of an error in 

accordance with SFFAS 21. The cumulative effect of adopting this 

accounting standard should be reported as a “change in accounting 

principle.” The adjustment should be made to the beginning balance of 

cumulative results of operations in the statement of changes in net position, 

for the period the change is made.

[17.] Prior year financial statements presented for comparative purposes 

should be presented as previously reported.

[18.] The nature of the changes in accounting principle and its effect on 

relevant balances should be disclosed in the current period. Financial 
Accounting Standard 10

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

statements of subsequent periods need not repeat the disclosures.6

[Footnotes:] 

[5]

 Under the provisions of SFFAS 6, paragraph 97, a portion of the estimated total 

cleanup costs shall be recognized as expense during each period that general G-PP&E is 

in operation and a liability accumulated over time as expense is recognized. This 

adjustment may be needed because the DoD may have already recognized the total 

estimated cleanup costs as a liability and expense for some military equipment per 

paragraph 101 of SFFAS 6, as amended. 

[6]

SFFAS 21, Reporting Corrections of Errors and Changes in Accounting Principles, 

paragraphs 12 and 13.Recognition and Measurement

The provisions of this Statement need not be applied to immaterial items.
Appendix A: Basis for Conclusions 

_____________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

11

Appendix A: Basis for Conclusions 

This appendix discusses some factors considered significant by members in reaching 

the conclusions in this Statement. It includes reasons for accepting certain approaches 

and rejecting others. Some factors were given greater weight than other factors. The 

guidance enunciated in the standards – not the material in this appendix – should 

govern the accounting for specific transactions, events or conditions. 

Project History 

A1. At the FASAB September 2007 meeting, the Board discussed technical 

agenda options. During the discussion, members expressed support for an 

effort to reduce the cost expected to be incurred at the Department of 

Defense (DoD) as it establishes the historical cost for G-PP&E during the 

coming years. 

A2. The discussion documented a number of concerns relating to DoD 

accounting. In addition, concerns regarding group and composite 

depreciation have been raised since the meeting. Collectively, concerns 

regarding G-PP&E were summarized as follows: 

a. Continued use of estimates in the absence of a system 

b. Options for group/composite depreciation 

c. Accounting for assets deployed to a war zone 

d. Cost accounting (assignment of R&D, support and overhead to GPP&E) 

e. Evaluation of existing standards and the potential for adopting fair 

value as the measurement basis 

A3. In considering these issues, the Board agreed that issues a. through d., 

can and should be addressed quickly due to the potential that more costly 

solutions will be used in the absence of guidance. The Board agreed that 

these issues could be addressed without significantly affecting the Board’s 

ongoing projects. 

A4. With respect to issue e., evaluation of existing standards, the Board agreed 

that this issue should be considered when the Board makes decisions on 

its technical agenda. As noted by one of the members, considerable time 

has been devoted to the question of G-PP&E accounting. A project on this 

topic is likely to be controversial and demand staff and Board time. 

Therefore, undertaking the project should be considered in the broad 

context of agenda setting. In August 2008, the Board agreed to add a 
Appendix A: Basis for Conclusions 

_____________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

12

project regarding evaluation of existing standards and plans to address the 

PP&E standards as one component of that project. 

Initial Proposal for Implementation Guidance 

A5. Regarding the permissibility of estimates (issue a), the Board agreed that it 

should consider amending the standards. It is not unreasonable to read 

SFFAS 6, as amended, to provide for the use of the SFFAS 23 initial 

capitalization methods only when assigning cost to G-PP&E acquired 

before the effective dates of SFFAS 6 or 23. The Board agreed to clarify 

this through a relatively narrow amendment of SFFAS 23. A draft exposure 

draft (omitting the Board’s basis for conclusions) was presented at the 

December 2007 FASAB meeting. The draft (1) provided an additional five 

year window for the Department of Defense and a rolling five year window 

for agencies not previously producing financial reports to rely on SFFAS 23 

methods and (2) provided new guidance regarding estimation of the inservice date. Subsequent Board discussions discouraged a proposal that 

would establish a date-certain timeframe for the use of reasonable 

estimates when determining the historical cost values of G-PP&E. 

A6. Staff did not request immediate action by the Board on the draft ED. The 

Board generally supported the proposal so staff’s next steps were to 

inquire with selected agencies and members of the audit community to 

confirm that the guidance is needed. In addition, staff reviewed fiscal year 

2007 agency reports to determine if agencies other than the Department of 

Defense face similar challenges with respect to developing G-PP&E 

systems, using SFFAS 23 methods, and could be expected to incur 

significant costs to arrive at acceptable estimates absent explicit guidance. 

A7. With respect to the three remaining issues noted in par. A3., 

(group/composite depreciation, deployed assets, and cost accounting), 

staff recommended and the Board agreed to request that the Accounting 

and Auditing Policy Committee (AAPC) consider these issues. Staff 

suggested that a task force develop implementation guidance within the 

boundaries of the current standards. The AAPC has accepted the project 

and a task force is actively engaged in developing guidance. 

Member Views 

A8. SFFAS 6 was issued in November 1995 and was effective in fiscal year 

1998. In addition, SFFAS 23, Eliminating the Category National Defense 

PP&E, was issued in May 2003 and was effective in fiscal year 2003. In 

2002, the Accountability of Tax Dollars Act established a requirement for 

many agencies that did not previously produce audited financial statements 
Appendix A: Basis for Conclusions 

_____________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

13

to do so. As a result, in fiscal year 2003 many agencies were required to 

comply with SFFAS 6 for the first time. Therefore, certain entities were not 

afforded an implementation period because they began preparing financial 

statements after the effective date of SFFAS 6. 

A9. This Statement permits continued application of the SFFAS 23 initial 

capitalization guidance. The Statement’s primary objective is a cost 

effective method for attaining compliance with SFFAS 6 as amended. This 

method is available to reporting entities that have not previously prepared 

financial reports but who may be required or elect to do so in the future and 

do not yet have adequate controls or systems to capture these costs. In 

addition, these amendments also apply in those cases where entities 

decide to use estimates to determine the historical cost values of G-PP&E. 

A10. An entity may find that it is not practical to determine the historical cost of 

G-PP&E based on the original transaction data because it is either not cost 

effective to do so or documentation is inadequate. Cost effectiveness may 

be based on an analysis of various cost factors associated with 

determining those historical cost values. An entity may also determine it 

impractical when the original transaction data historical cost documentation 

has not been maintained or when the historical cost data has been 

maintained but not in a manner that facilitates the timely valuation of GPP&E. An entity’s inadequate systems and/or processes that do not 

facilitate the ready and timely collection of data for the valuation of G-PP&E 

may lead to an assessment that valuation based on original transaction 

data is not cost effective. 

A11. The Board initially included “cost effectiveness” and “practical” as the basic 

criteria to be met before the use of reasonable estimates when valuing GPP&E in accordance with the asset recognition and measurement 

provisions of SFFAS 6, as amended, would be permitted. The Board later 

decided against including the above basic criteria. Such criteria are open 

to interpretation and likely to lead to subjective and inconsistent 

application. 

A12. The Board stresses to federal entities that the measurement basis for GPP&E remains historical cost; however, reasonable estimates are allowed. 

The Board believes entities should use judgment regarding the decision to 

use estimated historical cost in lieu of original transaction based data. The 

Board also notes that estimates are widely used throughout the financial 

statements. In this case, estimates should provide a reasonable 

approximation of historical cost; the measurement basis required for GPP&E. 
Appendix A: Basis for Conclusions 

_____________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

14

A13. The Board is aware that these amendments will not resolve all the 

concerns surrounding accounting for G-PP&E. However, allowing 

estimates as entities are working towards implementing systems and 

processes that can capture historical data would be beneficial. The Board 

is also relying on other means, such as laws and regulations relating to 

systems and controls, to encourage entities to continue to develop 

adequate systems and processes. 

A14. The Board also debated at length whether to establish a date-certain time 

frame or have an open-ended approach for the use of reasonable 

estimates when determining the historical cost values of G-PP&E. The 

debate included both pros and cons to a date-certain approach. One of 

the pros to the date-certain approach is that entities will have a specific 

goal (i.e., time frame) to work towards. The con to the date-certain 

approach is that there is a risk that the benefits of the standard could be 

voided if the entity does not or cannot meet the date-certain time frame. 

The debate also included pros and cons to an open-ended approach. The 

pros include flexibility and the opportunity to test various methodologies 

when determining the best estimation method. The cons include the 

prolonged use of estimates when not appropriate. 

A15. The Board decided against a proposal that would establish a date-certain 

time frame for the use of reasonable estimates when determining the 

historical cost values of G-PP&E. The Board does not want to penalize an 

entity simply because it may take the entity longer to implement the 

necessary systems and processes to ensure the adequate capture of 

historical cost values. In addition, the Board believes that the use of 

reasonable estimates is proper given the appropriate disciplines 

surrounding the use of estimates. 

A16. The Board encourages those federal entities that use estimates to 

approximate the historical cost values of G-PP&E to establish processes 

and practices (i.e., adequate systems and internal control practices) for 

future acquisitions that will capture and sustain transaction based data that 

meet the G-PP&E historical cost valuation requirements. 

A17. The Board believes that acknowledging the continuing appropriateness of 

estimates based on non-traditional documentation as provided by SFFAS 

23 is prudent under the current circumstances. Estimates that do not lead 

to material misstatements are acceptable without guidance from the Board. 
Appendix A: Basis for Conclusions 

_____________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

15

Exposure Draft 

A18. FASAB published the exposure draft (ED), Estimating the Historical Cost of 

General Property, Plant, and Equipment -- Amending Statements of 

Federal Financial Accounting Standards 6 and 23 on November 14, 2008.

Upon release of the ED, notices and/or press releases were provided to: 

The Federal Register, the FASAB News, the Journal of Accountancy, AGA 

Today, the CPA Journal, Government Executive, the CPA Letter, 

Government Accounting and Auditing Update, the Financial Statement 

Audit Network, the Federal Financial Managers Council, and committees of 

professional associations commenting on past exposure drafts. 

A19. Thirty-one comment letters were received from the following sources: 

FEDERAL 

(Internal) 

NON-FEDERAL 

(External) 

Users, academics, others 7 

Auditors 3 1 

Preparers and financial 

managers 

20 

A20. A majority of the respondents agreed with the Board that reasonable 

estimates may be used upon initial capitalization as entities implement GPP&E accounting for the first time, as well as by those entities who 

previously implemented G-PP&E accounting. 

A21. Based on comments received on the exposure draft, the Board agreed that 

internal use software, when the software meets the criteria for G-PP&E in 

accordance with SFFAS 10, Accounting for Internal Use Software, should 

also be included in the scope of this standard. SFFAS 10 specifies that if 

internal use software meets the criteria for G-PP&E it should be classified 

as G-PP&E and the costs should be capitalized. 

A22. Some ED respondents raised questions about the revaluing of G-PP&E 

that has previously been reported. The Board believes that there may be 

instances when the documentation for the original valuation is no longer 

available or it is not practical to revalue the reported cost of G-PP&E based 

on the original data because it is either not cost effective to do so or the 

documentation is inadequate. An entity may also determine it impractical 

when the original documentation has not been maintained or when the 

data has been maintained but not in a manner that facilitates the ready and 

timely valuation of G-PP&E. Therefore the Board agreed to allow the use of 
Appendix A: Basis for Conclusions 

_____________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

16

reasonable estimates when an entity determines it is necessary to revalue 

G-PP&E assets previously reported. 

Board Approval 

A23. This statement was approved for issuance by all members of the Board. 

The written ballots are available for public inspection at the FASAB’s 

offices. 
Appendix B: Abbreviations 17

____________________________________________________________________________________ 

Federal Accounting Standards Advisory Board 

Estimating the Historical Cost of General Property, Plant, and Equipment 

Amending Statements of Federal Financial Accounting Standards 6 and 23

October 14, 2009 

Appendix B: Abbreviations 

FASAB Federal Accounting Standards Advisory Board 

GAAP Generally Accepted Accounting Principles 

GAO Government Accountability Office (formerly General Accounting Office) 

G-PP&E General Property, Plant, and Equipment 

OMB Office of Management and Budget 

SFAC Statements of Financial Accounting Concepts 

SFAS Statements of Financial Accounting Standards 

SFFAC Statements of Federal Financial Accounting Concepts 

SFFAS Statements of Federal Financial Accounting Standards 

U.S. United States
FASAB Board Members 

Tom L. Allen, Chair 

Congressional Budget Office 

Robert F. Dacey 

John A. Farrell 

Nancy Fleetwood 

Norwood J. Jackson, Jr. 

James M. Patton 

Alan H. Schumacher 

Harold I. Steinberg 

Danny Werfel 

FASAB Staff 

Wendy M. Payne, Executive Director 

Project Staff 

Monica R. Valentine 

Federal Accounting Standards Advisory Board 

441 G Street NW, Suite 6814 

Mail Stop 6K17V 

Washington, DC 20548 

Telephone 202-512-7350 

FAX 202-512-7366 

www.fasab.gov