City of Stirling Transport Asset Managment Plan

7.3 Valuation forecasts Roads and pathways assets are generally specialised assets that are rarely, if ever, sold on the open market. In this regard the City assesses the value of existing assets based on replacement cost.

Define valuation component level

Develop asset registers into valuation database of components

Assign fixed asset numbers

Sum component values

Develop standard replacement costs for components

Test for impairment and if applicable calculate loss and write down impairment loss

Assess residual value for components

Calculate depreciated replacement cost and annual depreciation cost

Assess useful life

Determine depreciation pattern

Assess remaining useful life

Figure 7.3 Valuation process

Using current values and investing funds generated by the depreciation expense provides the funds required to renew the asset at the end of its useful life. From an asset management perspective, this process provides the mechanism to ensure that the funding required to provide services at the agreed service level is available when required and meets the asset management objective of sustainable service delivery.

The valuation is based on a reference asset considered to be the nearest replacement for the existing asset. Where the existing asset cannot or would not be replaced with an identical asset, for technical, community-need or economic reasons, the valuation of the reference asset includes an adjustment for the difference in service potential.

Transport Asset Management Plan 2018 – 2028 | 59