Description

1.1 This practice covers the assessment of loss, damage, and destruction (LDD) of property, assets, or material. LDD occurs when such property is found to be missing, damaged, or destroyed. Such discoveries often are made as a result of a physical inventory, an analysis of material used, or routine audits.

1.2 Some occurrences of damage and destruction are the result of natural disasters or other incidents beyond the control of the company, agency, or institution, and are not subject to the standards in paragraph 7. However, the reporting of such instances in accordance with paragraph 8 is still required.

1.3 Some occurrences of LDD are a result of natural degradation or other incidents of fair wear and tear and are not addressed as a part of this practice.

1.4 Loss, damage and destruction, while three completely different occurrences, are addressed as one in this standard. For the purpose of this standard, reporting and evaluating loss, damage and destruction are the same.

1.5 Loss, damage and destruction are key aspects of risk management. Projecting the possibility or probability of LDD, reporting and managing, and minimizing LDD is a critical and economic factor in the success of any endeavor.