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11
Minimum Levels of Componentisation for Road Infrastructure Assets11 September 2018
22
Today’s moderator
Eliz EstebanCommunications OfficerAustroads
P: +61 2 8265 3302E: [email protected]
33
About Austroads
The peak organisation of Australasian road transport and traffic agencies
• Roads and Maritime Services New South Wales
• Roads Corporation Victoria
• Department of Transport and Main Roads Queensland
• Main Roads Western Australia
• Department of Planning, Transport and Infrastructure South Australia
• Department of State Growth Tasmania
• Department of Infrastructure, Planning and Logistics Northern Territory
• Transport Canberra and City Services Directorate, Australian Capital Territory
• Department of Infrastructure, Regional Development and Cities
• Australian Local Government Association
• New Zealand Transport Agency
44
Our structure
55
Housekeeping
Presentation = 35 mins
Question time = 15 mins
+ =www.austroads.com.au/webinars
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GoToWebinar
Please type your questions here
Let us know the slide number your question relates to
77
Austroads Guideline and research report
Download from Austroads Website:https://austroads.com.au/publications/asset-management/ap-r577-18
https://austroads.com.au/publications/asset-management/ap-r576-18
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Gary Rykers (presenter)Manager Asset Management Victoria & TasmaniaProject Technical and Stakeholder Leadwsp-OpusM: +61 477 344 260
Andrew Golding (Q&A)Director, Transport System Asset ManagementDepartment of Transport and Main RoadsP: (07) 3066 0823 or 0407 114 676E: [email protected]
Today’s presenter
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AgendaTopic PresenterProject Background and Introduction
Gary Rykers(Technical and Stakeholder Lead)
Why?What?
Project ScopeResearch ReportTerminologyStakeholdersGuideline
How?ImplementationImpactsHypothetical Case Study
Q&A Andrew Golding (Austroads Project Manager)
1010
Project Background and Introduction
1111
Introduction to Team
Austroads Project ManagerAndrew Golding
wsp OpusProject LeaderSusan Chamberlin
wsp OpusTechnical & Stakeholder LeadGary Rykers
Austroads Project Working Group
Stakeholders-Finance and Audit
Industry Representatives
AustroadsAssets Task Force
Austroads Board
Project Team Review Team
1212
The Project Team
Liam Terris&
Patrick CarrRMS NSW
Daniel VerdouwDSG Tas
KellyDang
VicRoads
Soula EfstathiadisDPTI SA
Ian BarrMR WA
Andrew Golding
TMR QLD
Shane TepperDIPL NTAustroads
Project Working Group
Neil PincombeTCCS ACT
Wayne Robinson
NZTA
Kym FosterALGA
Matt Barry NTC
Mick SavageIPWEA
Patrick Flemming
Qld Audit Office
RicDe SantiTas Audit
Office
John Comrie
Independent Auditor
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Project Purpose
• To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities.
• The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform.
1414
Project Purpose
• To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities.
• The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform.
1515
Project Purpose
• To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities.
• The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform.
1616
Project Purpose
• To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities.
• The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform.
1717
Project Purpose
• To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities.
• The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform.
1818
Why?
How?
10 mins
What?
20 mins
Why?
5 mins
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Asset Classification Structure
“The classification of asset is one of the most important steps in financial reporting, asset accounting and asset management.
Asset managers rely on an asset hierarchy classification for service planning, management and cost and performance reporting.
Assets should be classified to suit both financial reporting and asset management purposes. The needs of accountants and asset managers should be identified and considered fully in developing the asset classification and hierarchy.”
- Australian Infrastructure Financial Management Manual (IPWEA 2015)
2020
Asset Classification Structure
Used to inform asset data structure and associated reporting, as follows:
• For use by asset management and information technology practitioners to inform asset hierarchy and/or reporting requirements.
• For use by asset management and financial management practitioners to inform asset valuation processes.
• For use by financial reporting practitioners to inform how recognised assets are rolled up for financial reporting.
Function
Location
Asset
Item
Relevant accounting standard terminology > Asset Class, Component and Item
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What’s the problem? National Perspective
• Road Agencies perform similar functions in the delivery of community services, on asset types that are similar in nature and function.
• National reform initiatives rely on comparable financial data, sourced from road management organisations (State/Territory Authorities, Local Government Authorities, etc)
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What’s the problem? National Perspective
• The flexibility within AASB standards has led to many different interpretations; specifically in relation to AAM2102 project scope:
−appropriate levels of asset componentisation
− terminology within AASB standards (i.e. Asset Class, Component and Item)
• From a whole of state / cross jurisdiction perspective, this lack of consistency results in a reduction in confidence when comparing financial data and financial statements.
• This has the potential to inhibit effective national reform.
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What’s the problem? Organisation Perspective
A common approach to financial valuation is the use of ‘stereotypes’ which includes:
• Different functional road classifications having different design standards and therefore different modern day equivalents (good practice)
• Unit rates typically incorporating many different Asset Types, with different useful lives (questionable practice, as generally not aligned to renewal work practices)
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What’s the problem? Organisation Perspective
Stereotype approaches adopted by many organisations typically group high value Asset Types (e.g. Pavements) with lower value Asset Types (e.g. minor culverts, signs, etc.)
• This approach is adequate to meet accounting standard compliance requirements, but
• Does not provide value to asset management functions, due to lack of transparency.
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What’s the problem? Organisation Perspective
In such circumstances, asset management functions and financial management functions do not align well, resulting in:
• Inefficient organisational costs associated with data management and
• Lack of ability to leverage financial valuation data for use in forward planning processes.
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PerspectivesIndividual Agency Asset Management requirements
Accounting Standard requirements
Asset Management
Financial Management
Financial Reporting
Cross Agency Consistent TerminologyIntegrated Asset Management and Financial Management
Single Asset Classification Structure for:• Asset Management• Financial Management• Financial Reporting
Asset Classification Structure – increasing level of inventory data granularity
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Project Goals
Principles used in development of Guidelines:1. Must comply to Accounting Standards2. Facilitate better integration of Asset Management and Financial Management3. Facilitate harmonisation 4. Increase the ease of cross-jurisdictional comparability5. Reduce barriers for regulatory reform
Tasked with developing Prescriptive GuidanceTherefore, need to codify how the prescription will apply. Primary focus on:• Terminology• Asset Classification Structure• Item Definition
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What?
How?
10 mins
What?
20 mins
Why?
5 mins
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Project Deliverables
Guideline Research Report Communication Material
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Program Overview – Two year project
Stage 1
• Establish project and team
• Project Inception
Stage 2
• Literature Review
Stage 3
• Current practice Stakeholder Survey
Stage 4
• First Draft Research Report
• Updated First Draft Research Report
Stage 5• First Draft Guideline
• Updated First Draft Guideline
• Conformance Assessment
• Draft Impact Statement + Gap Analysis
• Second Draft Research ReportStage 6• Research Report Final and Guideline FinalStage 7• Project Webinar
• Austroads Board Review & Approval
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Project Scope
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What does Prescriptive Guideline cover?
Current Replacement Cost Variables
Componentisation
Curves
Useful Lives
Remaining Useful Lives
Gross Replacement Cost unit rates
Residual Value unit rates
INCLUDED in Prescriptive Guidelines
EXCLUDED from Prescriptive Guidelines
Minimum levels of Componentisation to enable improved integration of asset management, financial management and financial reporting
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What does Prescriptive Guideline cover?
Asset Classes
Road Infrastructure Assets
Maritime Infrastructure Assets
Land and Buildings
Plant and Equipment
Intangibles
INCLUDED in Prescriptive Guidelines
EXCLUDED from Prescriptive Guidelines
Asset Types within Road Infrastructure Assets is guided by Austroads Data Standard for Road Management and Investment in Australia and NZ
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Terminology
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Terminology – Literature Review Findings
Accounting Standards
• Asset Class
• Component
• Item
Terminology used across the various documents is significantly different, often with the same terms having different meanings to different jurisdictions.
Key Finding: “in principle” guides do not adequately drive consistent application
Description of surfacing Jurisdiction Doc Ref#“Sub-component” NZTA 076
“Sub-class” Queensland 077
“Component” South Australia LG 021
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Alignment of Terminology in GuidelineAssetClass
(Level 1)
AssetSub-Class(Level 2)
AssetType
(Level 3)
AssetSub-Type(Level 4)
AssetComponent
(Level 5)
Level 1 and Level 2 have direct alignment
to ‘Asset Class’as defined within
Accounting Standards
Levels, 3, 4 and 5have direct alignment
to ‘Component’as defined within
Accounting Standards
AssetSub-Component
(Level 6)
Level 6provides detailed
componentisation for engineering and asset
management purposes
An individual Item, within an asset group,
may be recognisedat Level 2, 3 or 4
subject to theItem Test
Single Asset Classification Structure for:
• Asset Management
• Financial Management
• Financial Reporting
Confirmed that asset accounting concepts of Asset Class and Component are insufficient to fullydescribe the complex nature of road infrastructure assets.
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Alignment of Terminology in GuidelineAssetClass
(Level 1)
AssetSub-Class(Level 2)
AssetType
(Level 3)
AssetSub-Type(Level 4)
AssetComponent
(Level 5)
Level 1 and Level 2 have direct alignment
to ‘Asset Class’as defined within
Accounting Standards
Levels, 3, 4 and 5have direct alignment
to ‘Component’as defined within
Accounting Standards
AssetSub-Component
(Level 6)
Level 6provides detailed
componentisation for engineering and asset
management purposes
An individual Item, within an asset group,
may be recognisedat Level 2, 3 or 4
subject to theItem Test
Confirmed that there are different approaches to defining an Item, within the Asset Classification Structure.
Floating Item concept.The level which an asset Itemis recognised, may differ depending on the Item Definition Approach.
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Stakeholder Engagement
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Stakeholder Groups – Government Split
State/Territory Road Authorities
• NZTA
• TMR QLD
• RMS NSW
• ACT Govt
• VicRoads
• DSG Tas
• DPTI SA
• MRWA
• DoT NT
Federal
• DIRD
• NTC
• CGC
Local Government
• IPWEA
• ALGA
• Individual LGAs via ALGA State based groups
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Stakeholder Groups – Functional SplitAssets Owners
• State Road Authorities• Local Governments
Funders
• Treasuries• DIRD• Grants Commission
Advisory Associations
• ALGA• IPWEA• NTC
Finance / Auditing Industry
• Regulatory
• Standards Boards
Government
• Treasuries
• Auditors General
• Valuers General
Advisory Associations
• Auditor Reference Groups
• State-based industry groups
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Stakeholder Survey Participants
Financial/Auditor
48%
Technical/Engineering52%
Number of Verified Respondents: 227
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Do we need a Guideline?
There was very strong support to the need for prescriptive asset componentisation Guidelines
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Research Report
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Research Report StructureExecutive Summary
1. Introduction
2. Methodology
3. Deliverables Overview
4. Literature Review Summary
5. Stakeholder Survey Summary
6. Discussions and Determinations
7. Alignment Assessments
8. Guideline
9. Impact Assessment and Transition Statement
Report provides details which support the
Guideline
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Guideline
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Guideline Structure
PART 1 Guideline Overview
PART 2 Guideline Application
Attachment A Item Test Process Workflow
Attachment B Asset Classification Structure
Attachment C Item Test Worksheet
Attachment D Statement of Conformance
Attachment E Hypothetical Case Study
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Key Guideline Outputs
Guideline provides a structured approach to determining, for groups of assets:• the recommended ‘Item definition approach’, and• the associated ‘minimum inventory data requirements’
Item definition approach Minimum inventory data requirementsDescribes recommendation for how a group of assets will be recognised as an Item, including relationship to the levels of the Asset Classification Structure.Options are:• Average Weighted Asset• Network Asset• Simple Asset• Complex Asset
Describes the minimum level of asset inventory data that should be available to an organisation and that should be expected by an auditor.Options are:• Desk top assumptions• Sample data• Full asset inventory data• Component level inventory data
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Key Guideline Components (pun intended)
Asset Classification Structure(Appendix B)
Gross Replacement Costs
Item Test Process Workflow(Appendix A)Table 1
Item Definition Approach Minimum Inventory Data
INPU
TSM
ETH
OD
SO
UTP
UTS
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Asset Classification Structure
Refer Appendix B Item recognition level depended on Item Test
ComponentAsset Class
Separate identification of the Asset Sub-Classes, in the notes to financial statements
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Gross Replacement Cost EstimatesAsset Class (level 1)
• Road Infrastructure
Asset Sub-Class (level 2)
• Roads
• Roadside
• Drainage
• Mechanical & Electrical
• Structures
• Land Under Roads
Asset Type (level 3)
• As per Austroads Data Standard
• Refer appendix B for details
GRC estimates to be established via reference to existing agency information, such as:
• Previous financial year valuations
• Cost reports for information management systems
• Analysis of current contract schedules
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Item TestItem Test can be applied at:
• Level 2: Asset Sub-Class
• Level 3: Asset Type
Item Test is dependent upon:
• % of Gross Replacement Cost (GRC), relative to a group of assets
• As well as three qualifying questions to test:
• Is it practical to apply an average weighted unit rate to the group of assets? (e.g. Roadside)
• Are Items in Asset Type common? (e.g. Signs)
• Is it practical to split items into Components? (Earthworks)
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Process Workflow and Table 1
Option GRC% Weighted Average Unit Rate Practical?
Common Items?
Components Practical?
Recommended Item Definition Approach (Including Minimum Inventory Data Required)
Item Test applied at Asset Sub-Class (level 2)
1 <1% Yes N/A N/A Average Weighted Asset1 • Avg. ‘weighted’ GRC Unit Rate, combining
unit rates for individual Asset Types, applied to a group of assets that make up an Item.
• Concept of modern day equivalent applied, to describe the typical assets expected within a segment, typically differentiated by functional road classification2.
• If inventory data is not available for the group of assets, an estimate of assets within a segment, typically by functional road classification2, may be extrapolated from sample data or desk top assumptions.
2 ≥1% to <5% Yes N/A N/A Average Weighted Asset • Avg. ‘weighted’ GRC Unit Rate, combining
unit rates for individual Asset Types, applied to a group of assets that make up an Item.
• Concept of modern day equivalent applied, to describe the typical assets expected within a segment, typically differentiated by functional road classification2.
• If inventory data is not available for the group of assets, an estimate of assets within a segment, typically by functional road classification2, may be extrapolated from sample data.
Refer Appendix A: Item Test Process Workflow
Complimentary methods to put the Item Test into action
Start
Determine Road Infrastructure Class
GRC
Estimate Asset Sub-Class GRC %
Is it practical to apply an average weighted unit rate to the group of
assets? 1
GRC% <1%Average Weighted
Asset
Avg. Weighted GRC Unit Rate based on
desktop assessment
GRC% ≥1-<5% Average Weighted Asset
Avg. Weighted GRC Unit Rate based on
sample data
Items recognised at
Sub-Class(level 2)
Is Sub-Class GRC% ≥ 5%?
Item Test Applied at Asset Type
Level
Asset Type GRC?
GRC% <1% Are Items in Asset Type common? ²
Yes Network Asset
No Simple Asset
Avg. GRC Unit Rate based on desktop
assessment
Individual Recognition based
on desktop assessment
GRC% ≥1-<5% Are Items in Asset Type common? ²
Yes Network Asset
No Simple Asset
Avg. GRC Unit Rate based on sample
data
Individual Recognition based
on sample data
Items recognised at
Type(level 3)
GRC% ≥5-<10% Simple AssetIndividual
Recognition based on full inventory
GRC% ≥ 10% Is it practical to split Items into Components? ³
No
YesComplex
Asset
Items Recognised at Component Level
based on full component level
inventory
Items recognised at Component
(level 5)
Item Test Applied at Asset Sub-Class Level
Estimate Asset Sub-Class GRC
Amounts
Estimate Asset Type GRC Amounts
Estimate Asset Type GRC %
No
Is actual GRC% within same range as previous estimate?
No
Yes Financial ReportFinancial
Statement& Audit
Item Definition Approach
Minimum inventory data requirements
Recognition level within Asset Classification
Structure
Item Test Financial Reporting
Fair Value Calculation
NOTES:
1. The adoption of a Weighted Average Asset valuation approach requires applicat ion of the modern day equivalent concept to describe the typical assets expected, of ten differentiated by functional road classifications. This approach is generally considered practical for low value groups of assets, where road standards provide an adequate level of guidance regarding the asset types specified for construction, typically differentiated for each functional road classificat ion.
2. This question is a prompt to establish if individual Items, within a group of assets, are similar to the point where a common gross replacement cost unit rate can be applied.The term ‘common’ in this quest ion should not be interpreted to mean that a consistent modern day equivalent would be assigned for every individual Item within the group of assets. Rather, Items within a group of assets may still be assessed as common where Item at tribution, such as asset dimensions and materials, will result in a dif ferent unit rate.
3. This question is a prompt to determine if Items within a group of assets can be split into separable asset components (level 5), in accordance with complex asset requirements.
4. The Item Test should be applied, up to the point of fair value calculat ion, at least 12 months in advance of the next scheduled revaluation cycle. This should allow sufficient t ime to address identified data gaps and to consult with internal stakeholders and auditors.
Asset Sub-Class GRC?
Yes
No
Yes
Conduct Valuation
NTC Expenditure Classification
Guidelines
Austroads Data Standard
Complete during the year of the next scheduled revaluation cycle
Table 1: Item Definition Approach and / or
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Item Definition Approach
little or minimal value(group Asset Types)
significant value Bene
fit
Valu
e
Average Weighted Asset(e.g. Roadside Asset Types)
Network Asset(e.g. Signs)
Simple Asset(e.g. Culvert)
Complex Asset(e.g. Pavement Base & Sub-base) Co
mpl
exity
Item Definition Approach determined via Item Test (i.e. GRC% and Qualifying Questions)
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Minimum Inventory Data
Complexity of inventory data required is determined via Item Test. That is:• GRC% and• Qualifying Questions
Options are:• Desk top assumptions Average Weighted, Network or Simple• Sample data Average Weighted, Network or Simple• Full asset inventory data Simple Assets• Component level inventory data Complex Assets
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Item Test Worksheet
Used to record, by asset group:
• GRC% estimates
• Answers to Item Test qualifying questions
• Data Gaps identified
• Recommended Item Definition Approach (Output)
• Minimum Inventory Data Requirement (Output) Notes in Item Test Worksheet align to Guideline Process Steps
See Guideline Attachment C
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Key Procedural Requirements
• Attachment B prescribes minimum requirements for level 1 Asset Class, level 2 Asset Sub-Class and level 3 Asset Type.
• Each level of the Asset Classification Structure must have a many to one relationship with the level immediately above it, as per Attachment B.
• For the purposes of applying the Item Test, the Gross Replacement Cost of the Road Infrastructure Asset Class (GRCRoad Infrastructure) is to exclude the value of Land Under Roads.
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Key Procedural Requirements
• Implementation of the Guideline includes separate identification of the Asset Sub-Class categories (as a minimum) in the notes to financial statements.
• An entity may make a decision not to value selected Asset Types
• If they consider the collective value to be highly immaterial and they consider desk top assumptions related to asset data to provide negligible value to asset management functions.
• Any such decisions will be subject to normal auditing processes to assess the appropriateness of materiality assessment decisions.
• If an entity decides not to value selected Asset Types, this is to be acknowledged in the notes to the financial statements.
5858
How?
What?
20 mins
How?
10 mins
Why?
5 mins
5959
Project Success
Question: What does success for this project look like?
• Answer: Organisations adopt Guideline as part of next revaluation cycle
• Answer: Organisations adopt Asset Classification Structure for asset management functions
• Answer: Auditors use Guideline to supplement annual audit of financial statements
• Answer: Increased consistency* in financial statements allows greater comparability
* Level 2 categories reported (as a minimum) in the notes to financial statements.
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Implementation
Step Step Description Recommended Timing
1Apply the Item Test, up to the point of fair value calculation. This should be a relatively quick and easy process, which will assist with organisation specific implementation planning.
>12 months in advance of the next scheduled revaluation cycle
2 Consult with internal stakeholders and auditor regarding proposed changes to business processes.
3 Address identified data gaps, including associated information management considerations, and complete fair value calculation.
During the year of the next scheduled
revaluation cycle4 Complete financial report and financial statement, including audit.
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Implementation
Leave at least a 12 month lead time, in advance of their next scheduled revaluation cycle
Step Step Description Recommended Timing
1Apply the Item Test, up to the point of fair value calculation. This should be a relatively quick and easy process, which will assist with organisation specific implementation planning.
>12 months in advance of the next scheduled revaluation cycle
2 Consult with internal stakeholders and auditor regarding proposed changes to business processes.
3 Address identified data gaps, including associated information management considerations, and complete fair value calculation.
During the year of the next scheduled
revaluation cycle4 Complete financial report and financial statement, including audit.
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Implementation – Step 1
Quick process, to apply the Item Test, up to point of determining recommended:
• Item Definition Approach
• Minimum Inventory Data Requirements
GRC estimates to be established via reference to existing agency information, such as:
• Previous financial year valuations
• Cost reports for information management systems
• Analysis of current contract schedules
Item Test 12+ months
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Implementation – Base Expectation
• Collaboration required with:− Asset Manager, Finance Manager and IT Manager.− Auditor (of financial statements)
• Data Gaps identified will require time to address
• Guideline is not a substitute for organisation business processes.
• Implementation is likely to require changes to current business processes.
• Level of impact will depend on the asset management and financial management practices currently in place for the organisation.
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Potential Impacts
Potential impacts can be grouped into the following categories:
• Depreciation Expense / Asset Portfolio Value
• Financial Reporting & Audit / Compliance Risk
• Revaluation Timing
• Disclosure Requirement
• Asset Management Information Systems
• Cost/Effort Imposition
• Unit Rates / Useful Lives
• Potential to Realise Value to Organisation
See Research Report Section 9 for further details
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Relative Impacts
Level of impact will depend on asset management and financial management practices currently in place for the organisation.
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Disclosure Requirements – AASB 108
• ‘Change in policy’ or ‘Change in estimate’
• Auditor assessment based on merit (i.e. organisation specific determination)
• Anticipate likely outcome to be ‘change in estimate’, for the following reasons:
− Will continue to assess fair value, via current replacement cost methodology
− Change in componentisation unlikely to significantly impact the valuation approach
− Therefore, unlikely to materially impact the organisation’s financial statements.
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Hypothetical Case Study
Collaborative effort to apply the Item Test (Step 1)
• Joe – Finance
• Jane – Engineering
• Jack – Capital Works
• Jerry – Planning
Outputs:
• Item Test Worksheet (Attachment C)
• Data Gaps
See Guideline Attachment E
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Hypothetical Case Study
Business decisions are required regarding Item definition approach adopted. Examples as follows:
Asset Management need results in alternative to recommended Guideline minimum:
• For Road Barriers and Pathways, an asset management need has previously been identified which triggered collection of a full inventory data set.
• As such, it was decided to treat these two Asset Types as Simple Assets, as opposed to the minimum Guideline recommendation of Network Assets.
See Guideline Attachment E
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Hypothetical Case StudyAverage Weighted Asset approach may be adopted for multiple Asset Types in an Asset Sub-Class:
• The total estimated GRC% of the Roadside Asset Sub-Class is 5.9%.
• The remaining Asset Types within the Roadside Asset Sub-Class were all relatively low value, totalling 3.2% when Road Barriers and Pathways are excluded.
• Some of the remaining Asset Types were considered common and some were not.
• Some of the Asset Types has data sets and some did not.
• Notwithstanding these complexities, a balanced decision was made to treat the Roadside Asset Sub-Class (excluding Road Barriers and Pathways) as an Average Weighted Asset, based on 10% sample data collected across differing functional road classes.
See Guideline Attachment E
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Hypothetical Case Study
Some Asset Types may be broken into Asset Sub-Types:
• Abdul has a structured hierarchy for ITS Assets, with suitable Asset Sub-Types.
• Some ITS Assets Sub-Types already have a full inventory data set.
• He has been requesting funds to complete a data collection program for remaining Sub-Types, due to technological obsolescence and the need for asset upgrade programs.
• Kick off a 20% sample data collection program for remaining ITS Assets Sub Types, to support this already identified asset management need.
See Guideline Attachment E
7171
Hypothetical Case Study
Complex assets need to identify which Components will be adopted:
• Bridges are a Complex Asset.
• Components for valuation purposes will be Superstructure and Substructure, because renewal program often replaces superstructure and maintains existing substructure (i.e. different useful lives).
• Decision was made not to separately componentise Substructure and Footings, as per Guideline example, because they have a similar useful life. Rather, footings will be incorporated into the Substructure component.
See Guideline Attachment E
7272
Hypothetical Case Study
A Network Asset approach may be adopted, in consideration of functional road classifications.
• Treat ‘Open Drains’ and Kerb & Channel’ as a single Asset Type called ‘Roadside Drainage’.
• Recognise as Network Asset, with a Modern Day Equivalent for each functional road class.
• Kerb & Channel data recently collected to be supplemented by desk top for Open Drains.
See Guideline Attachment E
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Hypothetical Case Study
Top Management supportBarry – Chief Financial Officer
Bob – Executive Director Engineering
12 month implementation plan• Update of capitalisation and financial valuation business processes• Mapping of asset management register to finance fixed asset register• Data collection program (desk top and field based)
Staged approach• 2019/20 – Roads, Roadside and Drainage Asset Sub-Classes• 2020/21 – Mechanical & Electrical, Structures and Land Under Roads
More consultationAuditor
Works Managers
See Guideline Attachment E
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Benefits – Individual organisations• Improved data integration
• Increased reporting efficiencies
• Greater transparency and evidence for financial valuation reporting
• Improved availability of financial information to inform forward planning processes
• Greater confidence in financial information to inform performance metrics
• Improved data analytics to inform optimised decision making by top management.
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Benefits – Wider road sector
• Consistent reporting
• Cross organisation knowledge-sharing
• More equitable reform initiatives.
7676
Andrew GoldingDirector Transport System Asset ManagementDepartment of Transport and Main Roads
P: (07) 3066 0823 or 0407 114 676E: [email protected]
Questions?
7777
Upcoming Austroads webinars
Topic DateGuide to Project Delivery Part 5: Road Construction Quality Assurance 20 September
Operations of Automated Heavy Vehicles in Remote and Regional Areas 25 September
Register at https://austroads.com.au/webinars-and-events
7878
7979
Register at http://www.austroads.com.au/event
www.wrcsydney2023.com.au
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Thank you for participating