Annual Report 2019-20

Noosa Shire Council

Notes to the Financial Statements
for the year ended 30 June 2020

Note 15. Fair Value Measurement                           (continued)


Other Infrastructure Assets (Level 3)
The fair value of Other Infrastructure was last comprehensively valued as at 30 June 2016 by Aurecon Australia Pty Ltd.

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 estimating 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 applied an index rate to the value of Other Infrastructure for the period to 31 March 2018. Index rates for
the period from 1 April 2018 to 30 June 2020 shows no significant material changes and therefore the values are
considered still at fair value. As a result of this, no indexation has been applied to this class for 2019/20.

Accumulated Depreciation
In determining the level of accumulated depreciation, 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.

Infrastructure Assets (Level 3)
Due to the specialised nature of Council's infrastructure assets and the services they provide, there is no active
measurable market. The fair value of all infrastructure assets is determined on the basis of replacement of a new asset
or modern equivalent.

Current Replacement Cost (CRC) is measured by reference to the lowest cost at which the gross economic benefits
of the asset could be obtained in the normal course of business. Where existing assets were over designed, had
excess capacity or where redundant an adjustment was made so that the resulting valuation reflected the cost of
replacing the existing economic benefits based on an efficient set of modern equivalent assets to achieve the required
level of service output within the Council's planning horizon.

Infrastructure assets are comprehensively revalued every three to five years, based on component unit rates
developed in line with asset renewal methods.

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

Roads (Level 3)
The fair value of Roads and Bridges was last comprehensively valued at 31 March 2018 by independent valuers
AssetVal Pty Ltd.

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 estimating 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 AssetVal's cost database or the Rawlinson 2017 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 assets 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.

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