# Deferred Maintenance Reporting for Federal Facilities: Meeting the Requirements of Federal Accounting Standards Advisory Board Standard Number 6, as Amended(2001)

## Chapter: Sample Calculation

« Previous: Simplified BMAR Algorithm
Page 37
Suggested Citation:"Sample Calculation." National Research Council. 2001. Deferred Maintenance Reporting for Federal Facilities: Meeting the Requirements of Federal Accounting Standards Advisory Board Standard Number 6, as Amended. Washington, DC: The National Academies Press. doi: 10.17226/10095.
×

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

DEFINITIONAL ISSUES AND POTENTIAL REVISIONS 37 CCF is the condition code factor CRV is the replacement cost of the facility n = the number of facilities in the real property database Condition Code 18 5 Excellent; no work required. 4 Good; less than 10 percent of components need repair. 3 Fair; more than 30 percent of components need repair. 2 Poor; greater than 30 percent of components need repair. 1 Unserviceable; failed system overall. System Weights 19 40% Structural 30% Mechanical 30% Electrical The condition code factor is assumed to be a decaying exponential function as the cost to repair increases dramatically with deteriorating condition: CCF = k1e { [k2 (1 ` NCC)]} Where: k1, k2 = constants, assumed to be 1; exp = âeâ or 2.718. and NCC= Net Condition Code (sum of condition codes times system weights for each sample facility averaged for sample size) Sample Calculation Parameters: Assume an inventory of 100 facilities, \$100M total current replacement value, and a 1 building sample. Mechanical assessment: Failing heating units, aging unreliable chillers. Condition Code = 3 Electrical assessment: 2 systems need replacement. Condition Code = 4 Net Condition Code (NCC)=((3 Ã 0.4)+(4 Ã 0.3)+(3 Ã 0.3))/1=3.3 CCF=exp(1-3.3)=0.10 (10%) Where: k1, k2 are assumed 1 for this example BMAR=(\$100M)(0.10)=\$10M 18 The condition code factors and parametric weights are provided for illustrative purposes only. Each agency would need to develop its own set of condition code factors/parametric weights. 19 The condition codes for system weights are provided for illustrative purposes only. Each agency would need to develop its own set of conditions codes.

Next: REFERENCES »
Deferred Maintenance Reporting for Federal Facilities: Meeting the Requirements of Federal Accounting Standards Advisory Board Standard Number 6, as Amended Get This Book
×

In 1996 the Federal Accounting Standards Advisory Board (FASAB) 1 enacted Standard Number 6, Accounting for Property, Plant, and Equipment (PP&E), the first government-wide initiative requiring federal agencies to report dollar amounts of deferred maintenance annually. The FASAB has identified four overall objectives in federal financial reporting: budgetary integrity, operating performance, stewardship, and systems and control. FASAB Standard Number 6, as amended, focuses on operating performance and stewardship. The FFC Standing Committee on Operations and Maintenance has prepared this report to identify potential issues that should be considered in any future amendments to the standard and to suggest approaches for resolving them. The committee's intent is to assist the CFO Council, federal agencies, the FASAB, and others as they consider how best to meet the objectives of federal financial reporting for facilities.

1. ×

## Welcome to OpenBook!

You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

Do you want to take a quick tour of the OpenBook's features?

No Thanks Take a Tour »
2. ×

« Back Next »
3. ×

...or use these buttons to go back to the previous chapter or skip to the next one.

« Back Next »
4. ×

Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

« Back Next »
5. ×

To search the entire text of this book, type in your search term here and press Enter.

« Back Next »
6. ×

Share a link to this book page on your preferred social network or via email.

« Back Next »
7. ×

View our suggested citation for this chapter.

« Back Next »
8. ×