There’s one very important consideration that could either make or break your strategic asset management plan: estimating the useful life of your assets.

IPWEA trainer John Comrie explains that good asset management planning requires reliable and up-to-date estimates of asset useful lives. Local governments are incredibly asset intensive, which means that assessments of asset useful lives can have a big impact on recorded annual depreciation and asset management plan projected needs.

Comrie explains that local governments should create a solid foundation for their asset management planning.

“If councils are to make informed assessments regarding their financial sustainability and then consequential decisions regarding future revenue raising and service levels, it is essential that these assessments are underpinned by reliable, carefully considered useful life estimates,” he says.

Determining the useful life of  infrastructure assets involves consideration of several factors:

• Expected usage of the asset
• Expected physical wear and tear
• Technical or commercial obsolescence
• Legal or similar limits on use of the asset.

To help local governments secure this vital part of the financial sustainability puzzle, IPWEA is holding a webinar series titled Determining, Applying and Utilising Infrastructure Useful Lives.

Structured around IPWEA’s new and highly anticipated Practice Note 12: Useful Life of Infrastructure and with Comrie at the helm, the two 90-minute webinars will help asset managers, financial staff and those in charge of asset registers:

• Objectively review the useful lives of assets in your organisation’s  asset register and make changes as warranted
• Utilise this information for better asset management planning
• Calculate more reliable estimates of depreciation
• Understand and explain why useful lives for assets in your organisation may differ from those of other organisations

The first webinar kicks off 25 May, and the second on 1 June. Register now.

For more on aligning financial sustainability and asset management, check out the latest IPWEA roundtable in the April edition of inspire magazine.

About John Comrie

Comrie is a former head of the SA Government’s office for state/local government relations and prior to that the Local Government Association of SA. He consults and conducts training courses nationally, focussing on local government financial sustainability issues. Comrie has a background in economics and accounting and is a co-author of IPWEA’s Australian Infrastructure Financial Management Manual (AIFMM). Comrie is also an associate of Deloitte Access Economics and has led much of the firm’s work with the local government sector.