Ask Your Mates Open Forum

Useful Life

  • 1.  Useful Life

    Posted 02 April 2019 22:53
    ​Hi mates,

    Can you advise me of a useful life of shrubs that we installed under a Project using Capex Budget, please? My Finance would like to calculate depreciation over the useful life.

    Thank you.

    George
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  • 2.  RE: Useful Life

    Posted 03 April 2019 20:46
    Can I just clarify?
    Do Finance want to depreciate at shrub level???
    Bede
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  • 3.  RE: Useful Life

    Posted 03 April 2019 22:11
    ​Hi

    Thanks for your response.

    My Finance does not have any idea. I'd say useful life could be determined, based on the shrubs, groundcover plants, trees and palms individually, not by the height of them.

    Thank you for your advice in advance.

    George
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  • 4.  RE: Useful Life

    Posted 03 April 2019 23:17
    I'd depreciate the whole lot over 1 to 3 years.
    Bede
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  • 5.  RE: Useful Life

    Posted 03 April 2019 23:47
    ​Hi,

    Thanks for sharing.

    How about the trees and palms for depreciation?

    George
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  • 6.  RE: Useful Life

    Posted 04 April 2019 17:35
    5 - 10 years
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  • 7.  RE: Useful Life

    Posted 04 April 2019 17:35

    The depreciation of green assets, e.g. shrubs, is not well supported by Accounting Standards.​ Their value can go up or down depending on a host of factors.

    I do not think you can depreciate them.  If they can point to an ASSB standard that could be used, that would be great to know.

     


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  • 8.  RE: Useful Life

    Posted 04 April 2019 19:26
    Hi George,
    You could refer to IPWEA Parks Practice Note 10.2 (available form IPWEA bookshop) which provides guidance around valuation for living assets, including recommendations on useful lives.
    The useful life range for shrub gardens is 7 to 20 years, and selecting the useful life for your situation is dependant on a number of factors including location (eg street or park), climate, soils and level of service, etc. (typical 12 years for street gardens)

    Its interesting that your finance dept. wants to capitalise/depreciate the shrub garden plantings as this is not currently commonly done by most organisations, with soft landscaping costs typically excluded from the cost of capital projects when calculating the amount to capitalise. It should presume that to be consistent, your organisation is capitalising/depreciating all your shrub gardens?

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    Brian Milne
    Xyst
    brian@xyst.biz
    Ph 410 263 121
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  • 9.  RE: Useful Life

    Posted 07 April 2019 20:47
    ​Hi George,

    I'd go with a new asset in the class Land Improvements. Given that there are no agreed valuation methodologies for natural vegetation, and all will have different useful lives anyway, which could be impacted on suddenly by any number of events from vandalism to natural disaster, run with a 100 year life on the asset. When you revalue the land again next time, write back the value of the land improvement asset to the reval reserve, and take up the new value in the land asset.

    Mark.

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    MarkMatthewCity of Charles SturtManagement Accountant AMSmmatthew@charlessturt.sa.gov.au08 8408 1111
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  • 10.  RE: Useful Life

    Posted 09 April 2019 01:01
    ​Thanks to all for advice and info provided.

    George
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