Many government organisations are now required to adopt commercial accounting practices including the reporting of asset values. Some organisations have recognised that asset valuations and valuation data can be used to assess the adequacy of their assets and the adequacy of their performance in managing those assets. In this paper an objective, rational approach to valuation of bridges based on observed condition and performance characteristics is proposed. Bridges are valued at their written down current replacement cost with depreciation allowances made for: (i) observed deterioration; (ii) ageing; and (iii) functional obsolescence. Appropriate methods for calculating the individual valuation components are also discussed. Preferred methods are based on modern bridge management concepts originally developed for use in computer-based Bridge Management Systems. The proposed valuation methodology allows a range of important operational issues to be reflected in the valuations, thereby enhancing the prospect that management will both develop an awareness of such issues and take appropriate steps to address them. (A)
Abstract