This practice establishes a standard calculation representing the operational fluidity of assets used by an entity.

It is intended that this practice foster and enable additional practices related to or based on AMV information.

This practice enables effective and consistent communication and trend tracking over time regarding AMV.

Calculating, recording, tracking, and comparing the computed AMV will provide comparative insight into the operational complexity of the entity. Determination of the component parts of the AMV calculation will provide information on the number of acquisition, disposition, and movement transactions and, viewed separately, will serve as a useful insight.

Clarifying Comparative Example:

Entity A has few assets that are of a high dollar value but have been in place for many years and seldom move. These items are tracked to the site physical location level (PLL). Entity A will have an AMV near 0.0. This will be an accurate reflection of the record keeping and transactional risk associated with the management of assets within the entity.

Entity B has over 5000 pieces of equipment that it tracks to the room PLL. As most of these items are information technology related, they typically have a useful life of a little over three years, after which they are donated to local schools. These items are moved from person to person and room to room very frequently for operational purposes. Entity B will have a high AMV, perhaps 3.0 or above. This will be an accurate reflection of the record keeping and transactional risk associated with the management of assets within the entity.