Asset value is an important piece of financial reporting and transportation asset management (TAM). It can be used in financial statement balance sheets, it communicates what an agency owns and maintains, and it supports investment decisions. Financial reporting standards and requirements dictate how to perform the calculations; however, in practice, there is no single correct way to measure an asset’s value.
This guide provides guidance on how to calculate asset value, including three different perspectives each suited to different purposes, and a simple, 6-step approach to conduct the computation. It should be noted that though this guide is consistent with the standard practices, it is not an official accounting or financial standard.
This guidebook consists of nine chapters, a glossary and additional technical appendices. The first two chapters, including this one, introduce the content and key concepts. Chapters 3 to 8 provide step-by-step guidance for calculating asset value. Chapter 9 provides a set of worked examples of the calculations.
The remaining chapters are as follows:
This guide is intended for use by public agencies seeking to calculate asset value in support of TAM and TAM decisions. This includes, but is not limited to, applications such as:
- Using asset value to communicate the extent of assets an agency owns or maintains;
- Reporting asset value in a TAMP;
- Determining how value is expected to change over time given an agency’s investment strategy;
- Calculating the cost to maintain asset value; and
- Evaluating the impact of different treatment options on the value of a given asset or asset class.
This guide is designed for use by all U.S. public agencies managing transportation assets, including state and local DOTs, transit agencies, port authorities, airport operators, and others. Key users of the guide include engineers, planners, and analysts charged with managing transportation assets, calculating asset value, and/or helping support investment decisions. The guidance may also be useful for accountants and financial analysts responsible for agency accounting and financial reporting for purposes such as comparing TAM asset value calculations to those developed for financial reports or other applications.
The guide is designed to support a variety of different uses; it offers an explanation of essential concepts, step-by-step guidance, examples, and different levels of maturity in applying the guidance. These applications are listed below:
- Basic Overview of Asset Value and Related Concepts
- Step-by Step Guidance
- Practice Examples
- Practice Assessment