It's great to see a robust discussion on this matter and some valuable comments. I generally stay fairly silent on AYM, however I have been quoted in this one, so I'm happy to add a few more thoughts.
I agree with David Hope's comments "that the concept of 'useful life' as set out in accounting standards was pretty straight forward. The technical definition in AASB 116 is:
" Useful life is the period over which an asset is expected to be available for use by an entity".
David also mentioned the units of production, and as he suggested this is not all that commonly used for infrastructure.
IPWEA has prepared a detailed PN12 see link.
The discussions around this topic have been regular. The IPWEA has seen this matter as being significant and prepared a specific practice note on the issue. I'd encourage everyone to consider this and have added the link to the IPWEA Bookshop description of the practice note.
Asset managers and finance people should use same useful life
We should be using the same useful life. Note: there is a link between the Useful Life and the Level of Service. So, if we wanted to consider "options" for differing service levels then this is likely to impact useful life.
Useful life should reflect the best estimate of how long an entity will retain asset.
…. And don't forget Useful lives of all assets are required to be reviewed annually.
Allen Mapstone | Director Strategic Asset Management
IPWEA Australasia | NAMS Canada
T: 1300 416 745