3.3 3 International accounting standards

Roads are mostly publicly owned and unlike property assets, will not have a value if sold on the open market unless the buyer is permitted to recover their investment through mechanisms such as tolling. These assets are therefore not generally used for the purpose of revenue generation. Hence, the method to be adopted for asset valuation should not be based on market value or revenue stream. Exceptions may include concessions, toll roads, and the refinancing of design, build, and operate contracts, where roads operate more as a utility.

In order to support the business requirements of the organization, the method of calculation for asset value must follow the accounting standards of that organization. International Accounting Standard 16 is one of the accounting standards that may be adopted. It is also common practice that these standards are interpreted through codes of practice and other guidance and standards in order to be used for asset valuation.