Details:

Creators:
Dojutrek, Michelle S. ; Makwana, Parth A. ; Labi, Samuel
Dojutrek, Michelle S. ; Makwana, Parth A. ; Labi, Samuel Less -
Corporate Creators:
Purdue University. Joint Transportation Research Program
Corporate Contributors:
United States. Federal Highway Administration
Subject/TRT Terms:
[+]
Asset Management Assets Bridges Highways Life Cycle Costing Pavements Valuation
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.


Format:
PDF
Funding:
SPR-3427
Collection(s):
US Transportation Collection
Main Document Checksum:
[+]
urn:sha256:715f0db68d7e28d71e8e95dd523e5c6a61639a437dea1a9622ddbad8711211b2
Download URL:
https://rosap.ntl.bts.gov/view/dot/26025/dot_26025_DS1.pdf
File Type:

Supporting Files

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