Marlborough District Council Roading Assets - Activity Management Plan 2015 - 2018 SECTION 1 EXECUTIVE SUMMARY 1.11.3 Road Valuation The last valuation of the road network and associated assets was undertaken in June 2014 and is summarised in Table 11.1. The valuation is updated annually to take into account capital works and additions to the road network. Table 11.1 : MDC Road Infrastructure Valuation (Aug 2014 ) The valuation consists of an assessment of the optimised replacement cost, optimised depreciated replacement cost and the annual depreciation or decline in service potential of the network. The annual depreciation or decline in service potential is the amount the asset declines in value over a year as a result of the remaining life of the asset reducing. Provision is required to be made for funding this depreciation so as to make suitable allowance for the future replacement or renewal of the asset. Depreciation is provided on a straight-line basis on all physical assets at rates which write off the cost of the asset to the estimated residual value at the end of its service life. Expenditure on renewing or improving the capacity of the asset is capitalised annually as are assets which are vested in Council by developers. Capital work in progress is not depreciated. The total cost of this work is capitalised at the end of the financial year in which it is completed and depreciated from then onwards. See Section 9 for the full details on Valuation. The total replacement cost of the road infrastructure (excluding land) was assessed to be $642.4 million as at Aug 2014 . The total depreciated replacement cost (excluding land) was assessed to be $496.4 million. The optimised depreciated replacement cost has increased by 5% from $471.3M in 2011 to $496.4M in 2014 largely as a result of asset growth and escalation. The value of the underlying land was assessed to be $134.05 Million. 30 September 2014 Page 165 ofSection 1