3.3.9 Valuation steps

The general procedure for the valuation of road infrastructure assets consists of the following steps:

1. Establish the principles, basis, and rules for asset valuation. These should comply with the valuation requirements provided.

2. Compile an asset inventory that provides the base data for calculating asset values for all road infrastructure assets.

3.Calculate the initial value of the road infrastructure assets. This involves the following:

• Deriving appropriate unit rates for the different asset groups and subgroups
• Calculating the gross replacement cost for each asset within a group or subgroup

4. Calculate the consumption of the assets, which involves the following:

• Calculating in-year depreciation
• Assessing for in-year impairment and calculating loss in value when required

5. Calculate the depreciated replacement cost, which involves the following:

• Calculating the depreciated replacement cost by reducing the replacement cost to reflect the current age, condition, and performance of assets
• Annual adjustments to the asset value to account for in-year depreciation and impairment

6. Prepare the valuation report.