National Academies Press: OpenBook

A Guide to Computation and Use of System-Level Valuation of Transportation Assets (2022)

Chapter: Chapter 2 Asset Valuation Framework

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Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
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Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 21
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Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 22
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Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 23
Page 24
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 24
Page 25
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 25
Page 26
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 26
Page 27
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 27
Page 28
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 28
Page 29
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 29
Page 30
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 30
Page 31
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 31
Page 32
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 32
Page 33
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 33
Page 34
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 34
Page 35
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 35
Page 36
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 36
Page 37
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 37
Page 38
Suggested Citation:"Chapter 2 Asset Valuation Framework." National Academies of Sciences, Engineering, and Medicine. 2022. A Guide to Computation and Use of System-Level Valuation of Transportation Assets. Washington, DC: The National Academies Press. doi: 10.17226/26667.
×
Page 38

Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

Section 2.1 Asset Valuation and Asset Management - - Section 2.2 - Section 2.3 Steps in Calculating Asset Value - Section 2.4 Relationship to Accounting Standards - Chapter 2 Asset Valuation Framework 2-1 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Before practitioners can apply asset valuation to their TAM pro- - the market perspective, the economic perspective, or a combina- - -

Knowing what a physical asset is worth – its value – can be very useful - Communicating the Asset Inventory Section 2.1 Asset Valuation and Asset Management Chapter 2. Asset Valuation Framework 2-2 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Figure 2-1. City of Melbourne Assets Source: City of Melbourne (7)

Chapter 2. Asset Valuation Framework - - - (7) - - - Figure 2-2 - 8) - - 2-3 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Figure 2-2. Carver County Transportation Assets and Asset Value (8)

Chapter 2. Asset Valuation Framework Demonstrating Fiscal Responsibility - (9) - Figure 2-3 - (10) - - Testing Investment Strategies - - - Figure 2-3. WSDOT Pavement Performance Measures (10) 2-4 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework - - Prioritizing Investments - - - 2-5 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Thus far, we have discussed how asset value can be used to support TAM value? Measuring Capital (11) - Figure 2-4 - Cost Perspective - Section 2.2 Chapter 2. Asset Valuation Framework 2-6 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Asset Value Asset Value: the discounted stream of - Depreciation: loss in the value of an - Source: OECD, Measuring Capital

Chapter 2. Asset Valuation Framework - - - - - Market Perspective 2-7 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Figure 2-4. Perspectives on Asset Value

Chapter 2. Asset Valuation Framework - - - - - - - - 2-8 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Fair Value Fair Value: the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market partic- Source: IFRS, Standard Number 13: Fair Value Measurement (3)

Chapter 2. Asset Valuation Framework - - Economic Perspective (11, 12) - - - 2-9 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework - - - (13, 14) - - 2-10 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework - Reconciling Perspectives on Asset Value - - - - - - 2-11 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

- Figure 2-5 Description of the Steps - - - Section 2.3 Steps in Calculating Asset Value Chapter 2. Asset Valuation Framework 2-12 A Guide to Computation and Use of System-Level Valuation of Transportation Assets Figure 2-5. Calculation Steps Define the Analysis Scope Establish Initial Value Determine Treatment Effects Calculate Depreciation Calculate Value and Supporting Measures Communicate and Apply the Results

Chapter 2. Asset Valuation Framework - - - - Establish Initial Value - - - - - 2-13 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework - Establish Depreciation Approach - - - - - Calculate Value and Supporting Measures 2-14 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework Communicate and Apply the Results - - - - - - 2-15 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

- (1) - - - - - - Section 2.4 Relationship to Accounting Standards Chapter 2. Asset Valuation Framework 2-16 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework International Standards - IAS 16: Property, Plant and Equipment (2) - - (3) 2-17 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework - (15) (12, 16) Application to Asset Valuation for TAM - - - - - - 2-18 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Chapter 2. Asset Valuation Framework - 2-19 A Guide to Computation and Use of System-Level Valuation of Transportation Assets

Next: Chapter 3 Asset Value Scope »
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Determining the value of a transportation organization's physical assets is important for both financial reporting and transportation asset management (TAM).

The TRB National Cooperative Highway Research Program's NCHRP Web-Only Document 335: A Guide to Computation and Use of System-Level Valuation of Transportation Assets details how to calculate asset value and use it to support application in TAM.

Supplemental to the document are summary of the research project activities and recommendations for implementation.

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