BOP Program Statement 8563.08 § 7

asset, the Business Manager must determine its useful life.

a. Factors to be considered in making that determination are:

• physical wear and tear,

• past experience with similar assets,

• the asset’s present condition,

• the factory’s maintenance policy, and

• technological/industry trends (e.g., obsolescence).

The Business Manager is to consult one or more of the following

sources to help determine an asset’s useful life:

• Manufacturer specifications, literature, etc;

• FPI’s Product Support Center (PSC) at Englewood, CO;

• The latest Internal Revenue Service publication on

Depreciation or the estimated service life of classes

of equipment as published by the Department of

Commerce’s Bureau of Economic Analysis.

b. The Department of Justice has provided the following

guidance for estimating the useful life of internal use software

(as defined in the Program Statement on Machinery and Equipment):

• Business software, including those applications used to

manage individual business functions (i.e., financial,

procurement, inventory, warehouse, production

scheduling, etc.) has a recommended useful life of

seven years;

• Personal productivity and desktop operating software

(i.e., word processing, spreadsheet, graphics, etc)

have a recommended useful life of three years;

PS 8563.08

12/13/2001

Page 4

• Operating systems and systems administration

middleware, layered software, E-mail, run-time

services, and development tools and utilities have a

recommended useful life of five years.

c. An asset’s estimated useful life is to be included in the

Request for Special Authorization or equipment request form

submitted to Central Office for acquiring that asset.

d. Any changes in estimated useful life are to be accounted

for in the period of the change and future periods. No

adjustments are to be made to previously recorded depreciation.