A methodology for highway asset valuation in Indiana.

Details

• Creators:
  Dojutrek, Michelle S. ; Makwana, Parth A. ; Labi, Samuel
• Corporate Creators:
  Purdue University. Joint Transportation Research Program
• Corporate Contributors:
  United States. Federal Highway Administration
• Subject/TRT Terms:
  • Assets
  • Valuation
  • Asset management
  • Life cycle costing
  • Bridges
  • Highways
  • Pavements
• Publication/ Report Number:
  FHWA/IN/JTRP-2012/31
• Resource Type:
  Tech Report
• Geographical Coverage:
  Indiana
• Corporate Publisher:
  Indiana. Dept. of Transportation
• NTL Classification:
  NTL-HIGHWAY/ROAD TRANSPORTATION-Bridges and Structures ; NTL-HIGHWAY/ROAD TRANSPORTATION-Pavement Management and Performance ; NTL-PLANNING AND POLICY-PLANNING AND POLICY
• Abstract:
  The Government Accounting Standards Board (GASB) requires transportation agencies to report the values of their tangible assets. ; Numerous valuation methods exist which use different underlying concepts and data items. These traditional methods have a number ; of shortcomings, such as their implicit assumption that assets are monolithic and their inability to simultaneously consider a satisfactory ; range of value‐related asset attributes. In a bid to address these limitations, this report proposes a number of valuation methods. The ; elemental decomposition and multi‐criteria (EDMC) method carries out asset valuation on the basis of cost, remaining service life, and ; the condition of the individual components of an asset. The proposed replacement‐downtime‐salvage (RDS) method considers only the ; life‐cycle costs, including user cost during work zones and recycling benefits or disposal costs. The third proposed method, ; decommission‐and‐reuse (D&R), is based on the real‐estate value of the land occupied by the asset. The total value of Indiana’s state ; highway assets was determined in this study using the traditional and proposed methods; using the EDMC, this was estimated as ; approximately $68 billion. The value of pavements and bridges were $47.1B and $7.83B, respectively; together, these “large assets” ; constituted approximately 81.34% of total asset value. The total value of smaller assets was approximately $0.6B, constituting ; approximately 0.83% of the total value of assets; the breakdown was as follows: guardrails, $0.318B; underdrains, $0.005B; culverts, ; $0.214B; and road signs, $0.019B. The total value of the right‐of‐way was estimated at $12.04B. Using the straight line depreciation ; (SLD) method (the most common method used by other agencies), INDOT’s pavement and bridge values were determined as $12.4B and ; $9.59B, respectively. It was observed that the EDMC yields values that are significantly different from those from the traditional method, ; which could be due to the former explicitly considering the asset as an assemblage of components and thus carries out valuation for ; each component rather than considering the structure as a monolithic entity. On the basis of the unit asset values derived for Indiana, ; the existing asset inventory of other states, and the state‐specific cost factors, the total estimated value of state‐owned highway bridge ; and pavement assets in the United States was estimated at $1.4T or $4.4T using the traditional SLD and the EDMC methods respectively. ; For all highways in the United States, the estimated values were found to be $6.54T and $20.8T for the SLD and the EDMC methods, ; respectively. The study also explored ways by which asset value could be incorporated in investment evaluation.
  More +
• Format:
  PDF
• Funding:
  SPR-3427
• Download URL:
  https://rosap.ntl.bts.gov/view/dot/26025/dot_26025_DS1.pdf
• File Type:
  [PDF - 14.18 MB]
• Collection(s):
  US Transportation Collection
• Main Document Checksum:
  urn:sha-512:fcd5ff62b25b5989361d269833c15d3b4839ba08d15485b52c5aa8b6f2a2e1d684e55df3d92e4a0a0991767744b6a973b02fb071a9e79b89c054b8c3f4ad1449