5.4 Practice Assessment


5.4 Practice Assessment

This section provides examples of “emerging,” “strengthening,” and “advanced” practices for defining treatments and treatment effects. Maturity levels are defined for each of the four areas defined in the guidance. In the table an emerging practice is one that supports the guidance with minimal complexity, an advanced practice illustrates a “state of the art” example in which an agency has addressed some aspect of the asset value calculation in a comprehensive manner, and strengthening practice lies between these two levels.

This section provides examples of “emerging,” “strengthening,” and “advanced” practices for defining treatments and treatment effects. Maturity levels are defined for each of the four areas defined in the guidance. In the table an emerging practice is one that supports the guidance with minimal complexity, an advanced practice illustrates a “state of the art” example in which an agency has addressed some aspect of the asset value calculation in a comprehensive manner, and strengthening practice lies between these two levels.

Practice Area
Maturity Level
Description

Identifying Asset Treatments
Emerging

Asset purchase or construction and reconstruction are included in the asset value calculations. Supplemental analysis is not performed to consider inclusion of other treatments.


Strengthening

An analysis is performed to determine what treatments to include in the analysis, and what treatments are assumed to occur based on the agency’s life cycle strategy. The analysis is conducted separately from establishing asset life cycle strategies.


Advanced

An analysis is performed to determine what treatments to include in the analysis, and what treatments are assumed to occur based on the agency’s life cycle strategy. The analysis is conducted as part of the development of asset life cycle strategies and/or strategies are updated as appropriate following the analysis.


Determining Treatment Costs and Effects
Emerging

The analysis is limited to asset purchase or construction and reconstruction. Asset reconstruction is assumed to have the same cost and effect as initial construction.


Strengthening

Treatment costs are established through a one-time analysis of project data and updated in subsequent years based on inflation. Treatment effects are based on expert judgement or a one-time analysis.


Advanced

Treatment cost and effects are established through a well-documented process that includes: analysis of treatment data; assessment of how assets should be grouped for analysis (e.g., by system, material, and/or surface type); and a defined update cycle (e.g., once every 1 to 2 years).


Calculating Asset Useful Life
Emerging

Asset useful life is estimated based on expert judgement and/or industry defaults.


Strengthening

A one-time analysis is performed to establish asset useful life based on analysis of historic data and/or asset models.


Advanced

Asset useful life assumptions are based on models used in an agency’s management systems. The assumptions are periodically validated and updated through a well-documented process.


Determining Residual Value
Emerging

The analysis is limited to asset purchase or construction and reconstruction. Asset reconstruction is assumed to have the same cost and effect as initial construction (resulting in a residual value of 0).


Strengthening

A determination is made for each asset class and component concerning whether to calculate residual value based on salvage value or the difference between asset construction and reconstruction. Salvage values are established based on expert judgement.


Advanced

A determination is made for each asset class and component concerning whether to calculate residual value based on salvage value or the difference between asset construction and reconstruction. Salvage values are established based on analysis of historic data.