Change in Depreciation Methodology for Road and Stormwater Assets

In 2015, the Australian Accounting Standards Board clarified the definition of Residual Value, necessitating the separation of assets into short-life non-recyclable parts and long-life recyclable parts for accurate depreciation. Lake Macquarie City Council found their road and stormwater asset useful life values outdated, with many assets still functional beyond their stated life. This paper presents a methodology to implement an alternative depreciation approach, revising useful life values for these assets. Supported by asset management data and industry benchmarks, this change resulted in a 31% reduction in annual depreciation expense. *Publication of papers represents the opinion of author and does not necessarily represent the position of IPWEA NSW & ACT