3.3.10 Key aspects of the steps
Key aspects of these steps are shown in Figure 3.3.1 and defined below.
A summary of the key steps for the valuation of roadway assets are as follows:
- Asset consumption is measured in terms of depreciation and current condition;
- Depreciated replacement cost is the current monetary value of an asset or group of assets, normally calculated as the GRC minus accumulated depreciation . This is synonymous with net book value;
- Gross replacement cost is the total cost of replacing a road asset as part of the existing road network;
- Impairment is a reduction in net asset value due to a sudden or unforeseen decrease in the condition and/or performance of an asset, compared to the previously assessed level, which has not been recognized through depreciation;
- Equivalent asset is an asset that provides the same potential performance as the existing asset but reflects up-to-date technology; and
- Valuation report is a report that summarizes the results of valuation and provides supporting information relating to an organization’s road infrastructure assets.
Assets should be subject to full revaluation at least once every five years. In between revaluations, normally on an annual basis, the valuation report can be adjusted using appropriate price indices.