Asset Management Strategy 2022 - 2026

Asset Replacement Values Distribution by Asset Class

2: Asset Replacement Values

From a sustainability measure, the Remaining Service Potential Index is calculated at 74% for the entire combined asset portfolio This ratio is calculated as the Fair Value divided by the Replacement Cost. The Remaining Service Potential Index ratio represents the overall health of the asset stock in terms of measuring past asset consumption, via the amount of accumulated depreciation.

The industry target for this ratio is that it should be at 70% or higher. The lower the ratio, the more the asset stock has been consumed, which typically indicates that historically, not enough capital expenditure has been allocated to the asset.

The Remaining Service Potential Index ratios for each of Council’s asset classes are shown in Figure 3

Remaining Service Index Ratio