Development of road asset valuation in Finland

Finnish Road Administration has used road asset valuation in its accounting since 1998. Latest development of accounting methods and utilisation of the financial information of the national road network has been reported in this paper. Development of accounting procedures is vital from the point of view of integrating the information from various sources and to serve the information gathering system as a whole. National Audit Board has provided detailed guidelines of areas of developing accounting procedures in 2004. These guidelines cover the accounting procedures for road structures, for which the recommendation is to select a more detailed method that would support the internal accounting procedures. Depreciation times may have to be adjusted, because different materials may require different depreciation periods. Regarding investments, the Board recommends activating only measures that significantly improve road surface or structures to the balance sheet and to add all other measures to annual expenditures. Assigning value for roads and bridges added to or removed from balances sheet should be based on the replacement value and depreciation. One special question in road asset valuation is estimation of maintenance backlog. This question has been studied and new procedures for backlog estimation have been suggested, which is based on uniform condition classification of pavements, bridges and gravel roads. The usability of asset value information is also highly dependent on the accuracy of accounting. It is recommended that breakdown of investment costs between road structures should be started already during planning of investment, and the breakdown should be adjusted as planning goes along. In practice, this means introduction of a common database for management of cost information. In addition to normal accounting procedures, information of road asset value can be used to support decision-making of investment and maintenance funding levels. It could also be a part of a productivity indicator of the administration. The inaccuracy of asset value calculations as well as its still unspecified connection with road network condition has to be understood (A). For the covering abstract of the conference see ITRD E212343.

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  • Publication Date: 2006


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  • Accession Number: 01102578
  • Record Type: Publication
  • Source Agency: Swedish National Road and Transport Research Institute (VTI)
  • Files: ITRD
  • Created Date: Jun 16 2008 8:01AM