2016-11-08 S&O Agenda - Item 3, Attachment 1 - Local Economic Plan

                                                                                                   Financial Statements 2016



Noosa Shire Council

Notes to the Financial Statements
for the year ended 30 June 2016

Note 12. Fair Value Measurements (continued)



Specific Valuation Techniques used to value Council Infrastructure Assets comprise:
Road and Bridge Network - current replacement cost

Roads (Level 3)
Road and bridge infrastructure was comprehensively valued by independent valuer Aurecon Australia Pty Ltd as at 30
June 2014.


The valuation technique used to determine fair value is essentially based on price modelling of the fair value through
'Level 3' unobservable inputs. These include a variety of sources to obtain the best information available for each asset
type, including actual contract prices or supply quotes for similar assets.


The unit rates were predominantly developed from first principles by e9timating the plant, material and labour required for
asset replacement. The base rates were sourced from local suppliers estimates and quotes, contract schedules for work
recently completed and council records. Where costs have not been readily available then rates were obtained from
Aurecon's cost database or the Rawlinson 2014 edition of the Australian Construction Handbook.

Council uses 3 distinct location factors categorising its road infrastructure into urban, rural and commercial/industrial.
Roads are further categorised as sealed or unsealed and managed in segments. All road segments are then further
componentised into the sub classes of ~ssets that make up each segment, i.e. Road Surface, Road pavement- base,
Road pavement - sub-base, Road shoulder, Formation, Kerbs, footpaths etc. Each asset unit rate is determined on cost
to construct, material type and useful life to facilitate valuation and depreciation.


Asset Val Pty Ltd were engaged to undertake an indexation assessment across all non current asset categories with the
exception of Other Infrastructure, as at 30 June 2016. Roads and Bridges index rates for the period 1 January 2014 to 30
June 2016 shows no significant material changes and therefore the values are considered still at fair va lue. As a result of
this, no indexation has been applied to this class.

Accumulated Depreciation

In determining the level of accumulated depreciation, roads are disaggregated into significant components which exhibit
different useful lives. Useful lives are an estimate of the total service capacity in years for that type of asset

Bridges (Level 3)

A full valuation of bridges assets was undertaken by Independent valuers, Aurecon Australia Pty Ltd effective 1 January
2014. All bridges, with exception to 3 major bridges, were valued based on unit rates developed according to varying
material types used for construction, the deck area, size and length. Construction estimates were determined on a similar
basis to roads. Significant bridge structures were individually assessed by Au recon Australia Ply Ltd.

Asset Val Pty Ltd were engaged to undertake an indexation assessment across all non current asset categories, with the
exception of Other Infrastructure as at 30 June 2016. Bridges index rates for the period 1 January 2014 to 30 June 2016
shows no significant material changes and therefore the values are considered still at fa ir value. As a result of this, no
indexation has been applied to this class.

Accumulated Depreciation

In determining the level of accumulated depreciation, bridges are disaggregated into significant components which
exhibit different useful lives. Useful lives are an estimate of the total service capacity in years for that type of asset.
                                                                                                                    page 27