Annual Report 2018-19

                                                                                                 Financial Statements 2019



Noosa Shire Council

Notes to the Financial Statements
for the year ended 30 June 2019

Note 13. Fair Value Measurements (continued)


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 Bidges 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.
Road construction index rates for the period since last valuation to 30 June 2019 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 2018/19.


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.




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