115 q Annual Report 2013-2014 HORSHAM RURAL CITY COUNCIL
NOTES TO THE FINANCIAL STATEMENTS (Cont.) FOR THE YEAR ENDED 30th JUNE, 2014
21 PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT (cont.)
Land under roads Land under roads is valued at fair value using site values adjusted for englobo (undeveloped and/or unserviced ) characteristics, access rights and private interests of other parties and entitlements of infrastructure assets and services. This adjustment is an unobservable input in the valuation. The adjustment has no impact on the comprehensive income statement.
Road Infrastructure Infrastructure is valued using the depreciated replacement cost method. This cost represents the replacement cost of the building/component after applying depreciation rates on a useful life basis. Replacement costs relate to costs to replace the property to an "as new" standard. Economic obsolescence has also been factored into the depreciated replacement cost calculation.
Where it has not been possible to examine hidden works such as structural frames and floors, the use of reasonable materials and methods of construction have been assumed bearing in mind the age and nature of the building. The estimated cost of reconstruction including structure services and finishes, also factors in any heritage classifications as applicable. Infrastructure assets contain significant unobservable adjustments, therefore these assets are classified as Level 3.
The valuation of road infrastructure assets has been determined in accordance with an independent valuation undertaken by Mr Peter Moloney, Dip CE. CE. EWS. MIEAust, Moloney Asset Management Services. The valuation of road assets is at fair value based on the depreciated current replacement cost at the date of valuation.
There were no changes in valuation techniques throughout the period to 30 June 2014. For all assets measured in fair value, the current use is considered the highest an best use.
Reconciliation of Level 3 fair value 2014
Page 34
Specialised Land
and Land
Improvements $'000
Opening Balance Depreciation
Impairment Loss Revaluation Disposals
Closing Balance
Specialised Infrastructure Buildings and Other Structures $'000
$'000
------------------- ------------------- -------------------- 34,686 (318) -
61,305 (1,696) -
5,961 (4) 1,856 (1,069) 60,396
271,266 (6,033) (198) -
(299)
------------------- ------------------- -------------------- 40,325
264,736 =========== =========== ============
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