Minimum Levels of Componentisation for Road Infrastructure Assets 11 September 2018 1
Today’s moderator Eliz Esteban Communications Officer Austroads P: +61 2 8265 3302 E: eesteban@austroads.com.au 2
About Austroads The peak organisation of Australasian road transport and traffic agencies • Roads and Maritime Services New South Wales • Roads Corporation Victoria • Department of Transport and Main Roads Queensland • Main Roads Western Australia • Department of Planning, Transport and Infrastructure South Australia • Department of State Growth Tasmania • Department of Infrastructure, Planning and Logistics Northern Territory • Transport Canberra and City Services Directorate, Australian Capital Territory • Department of Infrastructure, Regional Development and Cities • Australian Local Government Association • New Zealand Transport Agency 3
Our structure 4
Housekeeping Presentation = 35 mins Question time = 15 mins + = www.austroads.com.au/webinars 5
GoToWebinar Please type your questions here Let us know the slide number your question relates to 6
Austroads Guideline and research report Download from Austroads Website: https://austroads.com.au/publications/asset-management/ap-r577-18 https://austroads.com.au/publications/asset-management/ap-r576-18 7
Today’s presenter Gary Rykers (presenter) Manager Asset Management Victoria & Tasmania Project Technical and Stakeholder Lead wsp-Opus M: +61 477 344 260 Andrew Golding (Q&A) Director, Transport System Asset Management Department of Transport and Main Roads P: (07) 3066 0823 or 0407 114 676 E: andrew.c.golding@tmr.qld.gov.au 8
Agenda Topic Presenter Project Background and Introduction Why? What? Project Scope Research Report Gary Rykers Terminology (Technical and Stakeholder Lead) Stakeholders Guideline How? Implementation Impacts Hypothetical Case Study Q&A Andrew Golding (Austroads Project Manager) 9
Project Background and Introduction 10 10
Introduction to Team Review Team Project Team Austroads Austroads Project Manager Project Working Group Andrew Golding Stakeholders- Finance and Audit Industry Representatives wsp Opus Project Leader Susan Chamberlin Austroads Assets Task Force wsp Opus Technical & Stakeholder Lead Austroads Board Gary Rykers 11 11
The Project Team Shane Patrick Tepper Flemming Austroads DIPL NT Qld Audit Office Andrew Project Working Group Golding TMR QLD Liam Terris & Patrick Carr RMS NSW Mick Savage IPWEA Ian Barr MR WA Neil Pincombe Soula Efstathiadis TCCS ACT Kym DPTI SA Wayne Foster Robinson ALGA NZTA John Kelly Ric Comrie Dang De Santi Independent VicRoads Daniel Tas Audit Auditor Matt Barry Verdouw Office NTC DSG Tas 12 12
Project Purpose • To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities. • The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform. 13 13
Project Purpose • To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities. • The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform. 14 14
Project Purpose • To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities. • The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform. 15 15
Project Purpose • To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities. • The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform. 16 16
Project Purpose • To develop prescriptive guidance material that will facilitate improved integration of Asset Management and Financial Management disciplines. The project will deliver prescriptive guidance regarding minimum levels of componentisation for complex assets, applicable to State / Territory Road Agencies and Local Government Authorities. • The project deliverables will provide a benchmark to stakeholders and users (i.e. road management authorities & auditors) for driving a more consistent approach to preparation of financial statements. In turn, this will enable more efficient collation of national data sets used to enable equitable reform initiatives, such as national funding reform. 17 17
How? What? Why? 5 mins 20 mins 10 mins Why? 18 18
Asset Classification Structure “The classification of asset is one of the most important steps in financial reporting, asset accounting and asset management. Asset managers rely on an asset hierarchy classification for service planning, management and cost and performance reporting. Assets should be classified to suit both financial reporting and asset management purposes. The needs of accountants and asset managers should be identified and considered fully in developing the asset classification and hierarchy.” - Australian Infrastructure Financial Management Manual (IPWEA 2015) 19 19
Asset Classification Structure Used to inform asset data structure and associated reporting, as follows: • For use by asset management and Asset Function information technology practitioners to inform asset hierarchy and/or reporting Item requirements. • For use by asset management and financial management practitioners to Location inform asset valuation processes. • For use by financial reporting practitioners to inform how recognised assets are rolled up for financial Relevant accounting standard terminology > Asset Class, Component and Item reporting. 20 20
What’s the problem? National Perspective • Road Agencies perform similar functions in the delivery of community services, on asset types that are similar in nature and function. • National reform initiatives rely on comparable financial data, sourced from road management organisations (State/Territory Authorities, Local Government Authorities, etc) 21 21
What’s the problem? National Perspective • The flexibility within AASB standards has led to many different interpretations; specifically in relation to AAM2102 project scope: − appropriate levels of asset componentisation − terminology within AASB standards (i.e. Asset Class, Component and Item) • From a whole of state / cross jurisdiction perspective, this lack of consistency results in a reduction in confidence when comparing financial data and financial statements. • This has the potential to inhibit effective national reform. 22 22
What’s the problem? Organisation Perspective A common approach to financial valuation is the use of ‘stereotypes’ which includes: • Different functional road classifications having different design standards and therefore different modern day equivalents (good practice) • Unit rates typically incorporating many different Asset Types, with different useful lives (questionable practice, as generally not aligned to renewal work practices) 23 23
What’s the problem? Organisation Perspective Stereotype approaches adopted by many organisations typically group high value Asset Types (e.g. Pavements) with lower value Asset Types (e.g. minor culverts, signs, etc.) • This approach is adequate to meet accounting standard compliance requirements, but • Does not provide value to asset management functions, due to lack of transparency. 24 24
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