Annual Report 2014-15

NOOSA SHIRE COUNCIL

Notes to the financial statements
For the year ended 30 June 2015
  14   Fair value measurements continued

      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.

      Stormwater
      A comprehensive valuation of stormwater infrastructure was undertaken by independent valuers Aurecon
      Australia Pty Ltd effective 30 June 2015.

      As there is a significant level of professional judgement used in determining the valuation due to the level
      of unobservable data, the valuation of drainage assets has been determined as Level 3.

      The fair value unit rates were determined using the prevailing market costs for supply and installation
      of similar assets or their modern equivalent. The methodology for calculation of unit rates from first
      principles consists of breaking down each asset into its cost components such as demolition,
       reinstatement, excavation, construction, delivery and installation. The models used to determine the
      unit rates included internal selection of variables for asset size, depth, location and soil type.
      Accumulated Depreciation
       In determining the level of accumulated depreciation, stormwater assets 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.
      Sensitivity Analysis - Roads, Bridge and Stormwater Network
      As detailed above Council's road, bridge and stormwater network has been valued using written down current
      replacement cost. This method utilises a number of inputs that require judgement and are therefore classed as
      unobservable. While these judgements are made with the greatest care, and based upon years of experience,
      different judgemenis could result in a different valuation. The table below summarises the effect that changes
      in the most significant unobservable inputs would have on the valuation:

       unobservable input") [ustece ies: inputs to fair-valuees              8 ee:
                                 metre or sqm      higher the fair value
     ra                         gga [mee
      Standard material usage | Varies depending | The higher the usage quantities,
      quantities                 upon the type of | the higher the fair value

      life)                      above —QH/OM _    |the lower the fair value.
                                 (lowest) to GH/6M                                   .
                                 (highest) ~
                                                                                                               :
                                                   life, the higher the fair value.                            {

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