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Assessed asset value which may depend on the purpose for which the valuation is required, i.e. replacement value for determining maintenance levels, market value for lifecycle costing and optimised deprival value for tariff setting.
IIMM
A valuation is the determination of the economic value of an asset.
LGAM
The optimised replacement cost after deducting an allowance for wear or consumption to reflect the remaining or economic service life of the asset.
DISCOUNTING A technique for converting cash flows that occur over time to equivalent amounts at a common point in time. DISCOUNT RATE A rate used to relate present and future money values, e.g. to convert the value of all future dollars to the value of dollars at a common point in time, usually the present.
IIMM
Valuation method which uses the prices achieved in sales of comparable assets to determine the value of the asset.
The current value of a non-current asset of a local government is the loss that it would incur if it were deprived of the asset’s utility (or service potential). (Synonymous with ‘deprival value’.)
DERM
Regular revaluation is often mandated for infrastructure intensive organisations and is also a requirement with the adoption of the 'revaluation model' option under AASB 116 Property, Plant and Equipment. The revaluation model requires an item of property, plant and equipment whose fair value can be measured reliably, to be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are to be made with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair value at the reporting date. When an item of property, plant and equipment is revalued, the entire class of property, plant and equipment to which that asset belongs is to be revalued.
AIFMG 2009
A physical component of a facility which has value,enables services to be provided and has an economic life of greater than 12 months. Dynamic assets have some moving parts, while passive assets have none. IIMM
An asset is an object (physical or intangible) that has an identifiable value and a useful life greater than 12 months, that is or could be used by the entity responsible for it to provide a service. LGAM
Asset - An item with an independent physical and functional identity and age, within a facility (e.g. pump, motor, sedimentation tank, main). Asset - Service potential or future economic benefits controlled by entity as a result of past transactions or other past events. DERM
The wearing out, consumption or other loss of value of an asset whether arising from use, passing of time or obsolescence through technological and market changes. It is accounted for by the allocation of the cost (or revalued amount) of the asset less its residual value over its useful life. IIMM
Depreciation is the reduction in the value of an asset due to usage, passage of time, environmental factors, wear and tear, obsolescence, depletion or inadequacy. LGAM
The consumption of infrastructure and other assets is reported in financial statements as depreciation. Depreciation is the systematic allocation of the depreciable amount of an asset over its useful life. The depreciation method used is to reflect the pattern in which the asset's future economic benefits are to be consumed by the entity. There are at least 4 measures of asset consumption, each of which can be related to a method of depreciation:
- when consumption is constant over the useful life of the asset - straight line method,
- when consumption is greater in the early years and less in the later years - declining balance method,
- when consumption increases as the asset approaches the end of its useful life - output/service basis method,
- when consumption varies with outputs/service - units of production method.
AIFMG 2009
Planned maintenance activities fall into three categories: i) Periodic - necessary to ensure the reliability or to sustain the design life of an asset. ii) Predictive - condition monitoring activities used to predict failure. iii) Preventive - maintenance that can be initiated without routine or continuous checking (e.g. using information contained in maintenance manuals or manufacturers' recommendations) and is not condition-based.
IIMM
Planned maintenance is maintenance organised and carried out with forethought, controland the use of records to a predetermined plan.
LGAM
The maintenance organised and carried out with forethought, control and the use of records to a predetermined plan.
DERM
Repair work that is identified and managed through a maintenance management system (MMS). MMS activities include inspection, assessing the condition against failure breakdown criteria/experience, prioritising scheduling, actioning the work and reporting what was done 10 develop a maintenance history and improve maintenance and service delivery performance.
AIFMG 2009