Proposed method to calculate asset values for road structures

Show simple item record Roux, M.P. Sallie, I.M. Kemp, M.J. De Franca, V. 2019-05-31T11:17:00Z 2019-05-31T11:17:00Z 2018
dc.description Papers Presented at the 2018 37th Southern African Transport Conference 9-12 July 2018 Pretoria, South Africa. Theme "Towards a desired transport future: safe, sufficient and affordable".
dc.description.abstract The Public Finance Management Act (PFMA), requires national and provincial government departments to “prepare financial statements for each financial year in accordance with generally recognised accounting practice”. The Municipal Finance Management Act (MFMA) includes similar requirements for municipalities. The “generally recognised accounting practice” for national and provincial government departments is the Modified Cash Standard, being the reporting framework prescribed by the National Treasury, Office of the Accountant General (OAG). Municipalities have to comply with the Standards of Generally Recognised Accounting Practice 17 (GRAP 17). Both these accounting standards require that an immovable asset, which qualifies for recording as a capital asset such as road structures (bridges, major culverts, etc.), must be measured at its cost. Where the cost of an immovable asset cannot be determined accurately, the immovable asset should be measured at fair value. In the case of specialised buildings and other man-made structures, an entity need to estimate fair value using a depreciated replacement cost approach. Replacement cost is the value of an asset that replicates the existing asset most efficiently, while providing the same level of service. This paper describes a proposed method to calculate the depreciated replacement cost for road structures, such as bridges and major culverts. The replacement cost of a structure is the cost to replace the structure with a similar structure at current rates. It is based on a unit rate for the replacement cost. The depreciated replacement cost is the optimised replacement cost after deducting an allowance for wear or consumption to reflect the remaining or economic service life of the structure. This is achieved by multiplying the replacement cost of the structure with an average condition index. The average condition index is calculated using the degree and extent ratings from the DER-ratings for the structural elements of the structure. The DER-ratings are the degree, extent and relevancy ratings of defects on the structure, using the defects based rating system described in the draft TMH19 Manual for the Visual Assessment of Road Structures
dc.format.extent 13
dc.format.medium PDF
dc.language.iso en
dc.rights Southern African Transport Conference
dc.title Proposed method to calculate asset values for road structures
dc.type Research Paper

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