Following are definitions from the IPWEA Infrastructure Financial management Guideline for expenditure reporting. Exact definitions may vary from jurisdiction to jurisdiction but most Government reporting bodies will work with something very similar. As a profession the IIMM is our most comprehensive guide.The examples quoted are mine.Based on these definitions sealing a gravel road would be an Upgrade because it is enhancing the service level and expected life of the existing asset. The service (transport of goods) was already existing.Operational Expenditure
Continuously required expenditure to operate the asset.
e.g. power, fuel, staff, cleaning, inspection, white ant protection of a bridge and similar costs.
Most road agencies don't tend to track operational costs separately to maintenance costs.
Periodic or reactive expenditure required to ensure an asset achieves its useful life.
e.g. grading a gravel road, patching a pothole, repairing edge breaks, banding/sealing a bridge element.
Most road agencies typically include in maintenance minor asset replacement below capitalisation threshold (replacing guide posts, signs, etc)
Expenditure on an existing asset which returns its service potential or remaining useful life up to the original expectation.
e.g. re-sheeting a gravel road, resurfacing an existing sealed surface, replacing the deck of a bridgeRenewal might include refurbishment or replacement and some reporting systems make a distinction.
Expenditure which enhances an existing asset to provide a higher level of service or increasing its useful life beyond original expectation.
e.g. sealing a gravel road, sealing shoulders on a sealed road, widening a bridge
Expenditure to create a new asset where no asset previously existed
e.g building a new road or bridge
You could argue that components of the work (e.g. topping up the gravel is renewing the gravel asset) but this is trying to be precise with a fairly crude generalisation of expenditure and unusual for most reporting systems. You are normally reporting the predominant category of expenditure. Some jurisdictions and finance managers might require a breakdown or Project costs where a project included two types of work (e.g. 80% resurfacing an existing road and 20% building a new stopping bay).
Understand what you are being asked for and why. When your finance manager (accountant) is asking for this information they are typically trying to determine how much depreciation they should "write off" the original asset. When a government agency is asking this question they usually want to know how much you are spending on renewing and expanding your assets. If you are creating a breakdown for your own budgeting and cost management purposes there are better ways to do this that don't involve crude generalisations.Hope this assists
Reconstruction of roads is not maintenance as it replaces the existing asset with a new one, typically with a design life of 40? years. Where appropriate, the need to undertake reconstruction of all or part of a road should be included in the individual roads strategies.So in essence this is a new asset and the old asset must be therefore disposed of and replaced with the new one. If sealing is to be done without significant reconstruction then it is simply an upgrade of the existing asset.Clear as mud I knowRegards Barrie
Is agree with Ashley Bishop;the answer depends on the level of detail that you require and can even depend on the type of asset management software that you are using. In case a (partly) change in properties (like type of layer) would require the definition of a new asset, than thats what you have to do.In general you may only want to change the properties in order to ensure that the related maintenance intervals stay aligned with the type of material and the function. Being subjected to management of change, this should be registered as a change (which a normal upgrade need not be, since that might as well be like4like) which then would lead to the requirement to review the maintenance plan as well.I hope this addition helps.
Best regards,Geert Henk
I agree that it should be an upgrade. The asset exists already in your AMIS (asset register or GIS inventory) under a different class maybe and it has been renewed to provide a different level of service. A few things to note is that AMIS needs to be updated for example changing the asset class, type and other technical attributes, valuation, level of service and maintenance activities for the new economic lifecycle.
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