2015-11-16 GC Agenda - Item 3, Attach 1 - Annual Report 2014-15

                                                                                                                                 QAO
                                                                                                                          certified statement.

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 Ply 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 lnto 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 judgements 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:


      Slgnlllcant                                      Relationship of unobservable
                                   Range of inputs
      unobservable   Inout                             inouts to fair value
      Number of labour hours      5-100hrsllinear      The higher the labour hours, the
                                  metre or sam         hiaher the fair value
      Standard material usage     Varies depending     The higher the usage quantities,
      quantities                  upon the type of     the higher the fair vaiue
                                  material
      Condition rating (useful    As specified      The higher the condition rating,
      life)                       above - OH/OM     the lower the fair value.
                                  (lowest) to 6H16M
                                  (highest)
      Remaining useful life        5-100 years         The longer the remaining usefuf
                                                       life, the hiaher the fair value.




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