For our first Āpōpō Views of 2025, we are giving you a breakdown of the recently updated Infrastructure Asset Valuation and Depreciation Guidelines.
After some months of intense feedback and reviews, the final version of the Guidelines is going live at the end of the month. So let’s take a moment to break down what the Guide is, and hear from the authors themselves why it is a useful tool for infrastructure asset managers in Aotearoa New Zealand.
“After a long period of industry feedback that these Guidelines remain valuable but needed updating, it is exciting to release this fully revised edition which brings critical guidance for asset managers in New Zealand storming into the mid 2020’s. Thanks to all the contributors who have worked diligently to bring this update to life. And particular thanks to our NAMS Special Interest Group for your oversight and determination to see it through.”
Murray Pugh – Āpōpō CE
What are the Valuation and Depreciation Guidelines?
First released in 2002 and last updated in 2006, the Infrastructure Asset Valuation and Depreciation Guidelines provide an essential framework for valuers, asset managers, finance staff, and auditors working with infrastructure assets. These updated Guidelines support consistent, reliable, and standards compliant valuation practices, ensuring transparency and comparability across various asset owners and their auditors. Ultimately, this fosters better financial reporting and more informed decision-making.
The primary objectives of the Guidelines are:
- To assist valuers, asset managers, finance staff and auditors with the valuation and depreciation of infrastructure assets and assets belonging to public benefit entities (PBEs).
- To set out an agreed, consistent approach for valuations of infrastructure assets, for all asset owners and their auditors. Thereby providing the basis for consistency and comparability of valuations across different PBEs and enhancing the quality of information for the users of financial reports.
Why infrastructure asset valuation matters
Valuation of infrastructure assets is not just an accounting requirement; it is also a strategic activity that provides a foundation for informed decision-making and asset management planning. Important reasons to value infrastructure include:
- Understanding the importance of physical assets in society
- Informing decision-making including funding, financing, asset management, forecasting renewals, and maintenance activities, and
- Complying with relevant financial reporting and accounting standards.
Hear it from the contributors
To gain a deeper understanding of why infrastructure asset valuation matters, we turned to our expert contributors. Here’s why, in their views, infrastructure asset valuation is so important:
“Infrastructure asset valuations reliably inform decisions about our investment in infrastructure assets and are the financial basis for the consumption (depreciation) of those assets.”
Brian Smith, Brian Smith Advisory
“Infrastructure asset valuation supports informed decision-making and transparent management of assets. It forms a critical link between the physical management of the assets (asset management) and the financial management for the asset-owning organisations.
Valuations are undertaken for a range of purposes, including fulfilling regulatory requirements such as financial reporting, and risk management such as establishing appropriate insurance cover. Valuations both reflect the existing asset management practices of an organisation and provide important input into decisions related to maximising the service potential of the portfolio.
The value of infrastructure shifts over time, reflecting market changes in the cost and requirements to build new or replacement assets, changes in the quantity, condition and age of the assets, and the latest information available reflecting the expected life and remaining lives of the assets. Regular valuations of asset portfolios reflect this evolution of valuation parameters and the associated change in value over time.
Accordingly, regular infrastructure asset valuation is a key component in ensuring that assets are effectively managed and accurately accounted for.”
Jaimie Cable, Principal Advisor – Infrastructure Valuations, WSP:
How can I access the Guidelines?
Does this resource sound like something you need? Here’s how you can get your hands on it:
From the end of February, all Āpōpō members will be able to access this resource online for free on our Resource Kete, in the same way that you access the Āpōpō Guide. There is no charge for access for members.
If you would prefer a physical copy, the Guidelines can also be purchased in hardcopy format – available to both members and non-members. The hardcopy versions will be sent later this month when the Guidelines are finalised.