ASSET VALUATION MODEL FOR SEWER PIPEINFRASTRUCTURE SYSTEM

摘要

The recent trend to privatization coupled with a new requirement to report tangiblerncapital assets on annual government statements has focused the need for anrnunderstanding of the impact of valuation method and performance prediction modelsrnon network asset valuation. Asset valuation holds great promise as a readilyrnunderstood performance measure and, as an asset management integrationrnmechanism for trade-off analysis between competing components (water, wastewaterrnetc.). However, there is no framework available to guide engineers in the selection ofrnwhich valuation method to use for which asset category. To comply with GovernmentrnAccounting Standards Board’s Statement-34 (GASB 34) requirements, governmentsrnmust report the value of their infrastructures’ assets by using a depreciation method orrna modified approach method. However, including these two methods, most existingrnvaluation approaches do not properly account for the change of assets’ conditions andrntime-value of money. This may lead to absurd asset value especially forrninfrastructures that have significantly longer service life than other capital assets.rnThis paper presents an asset valuation model, combined with Markov chain-based,rncondition prediction and regression-based, price index prediction to capture thernchange of asset condition and time value of money. The model will not only assist inrnpredicting the future value of the asset but also play an important role in constructingrnthe optimal R&R policies and the timing of their application.