Please use this identifier to cite or link to this item: https://hdl.handle.net/1959.11/23362
Full metadata record
DC FieldValueLanguage
dc.contributor.authorIvannikov, Igoren
dc.contributor.authorDollery, Brian Een
dc.contributor.authorBlackwell, Boyden
dc.date.accessioned2018-06-25T15:03:00Z-
dc.date.created2018en
dc.date.issued2018-
dc.identifier.urihttps://hdl.handle.net/1959.11/23362-
dc.description.abstractLocal government authorities in NSW manage a significant pool of infrastructure assets in order to serve community needs. These assets usually comprise roads, bridges, the water and sewerage network, stormwater drainage, buildings, and other infrastructure. Infrastructure assets represent a major proportion of the total asset base of every NSW council. All local councils in NSW are required to measure their infrastructure assets at fair value and revalue them every five years. However, there are many problems with the valuation of infrastructure assets in local government. Problems arise mostly as a consequence of the unique characteristics of public sector infrastructure assets; in particular, the assets have long and sometimes uncertain lives, there is no market into which they can be sold and - unlike commercial assets - local government urban infrastructure is not operated to make a profit. This makes the valuation and revaluation of these assets for financial reporting purposes a technically complicated exercise. The aim of this study is to (a) investigate whether NSW local government councils comply with the Australian Generally Accepted Accounting Principles (GAAP) in performing the revaluation of their infrastructure assets and (b) to assess any consequences for the reliability of financial reporting in NSW local government. Using road assets as an example, we analyse the results of revaluations of road assets undertaken by 89 NSW councils as reported in their financial statements during the period from 2013 to 2016. In this analysis we focused on the effect of a change in accumulated depreciation as a percentage of the gross replacement cost of the revalued assets. The analysis revealed that in most cases this effect is significant: 36 councils reported a decrease of between 10% and 53%; 5 councils reported increases of between 10% and 31%; and others fell within a 10% range. In absolute terms, these are substantial changes. However, the accounting and reporting of this effect is strikingly inconsistent between the councils. This forms the rationale for this thesis. Based on the analysis of revaluation of roads, the study finds that the main reason for these significant changes arises from the change in the estimates of the remaining useful life of the assets at the time of revaluation. It is most unlikely that asset condition can have such a significant effect on many councils all at the same time. Furthermore, we concluded that the changes in estimates of the remaining useful life is the result of non-compliance with the requirements of AASB 116 to have the useful life reassessed at the end of each reporting period (i.e. each year). Instead, councils wait five years and undertake the next reassessment of the useful life at the time of the comprehensive revaluation. This leads us to a conclusion that, if material, the effect should be treated as an error based on the requirements of AASB 108. If councils did follow requirements of AASB 116 by assessing the useful life at the end of each year, then the effects would be unlikely to be material at the time of the comprehensive revaluation. Only 12 councils out of 89 reported this effect as an error. However, even these did not fully comply with the requirements of AASB 108 in presenting the effects of the error in the financial statements. All other councils did not report or disclose anything about this effect in their revaluation adjustment, regardless of the significance of that effect. There are two main conclusions of the thesis. First, most councils did not comply with the Australian GAAP in accounting, reporting and disclosing the effects of their asset revaluations. Second, there is a high risk that depreciation expense, operational results and financial ratios were materially incorrect in the years preceding each comprehensive revaluation. The latter makes the financial reporting in NSW local government unreliable for decision-making purposes for the users of financial reports. Our study has examined only roads assets in detail. If similar deficiencies in procedures were to exist in the treatment of other local government assets, then summed over all assets, the unreliability of the financial reports could be significantly greater.en
dc.languageenen
dc.titleAccounting problems in the valuation of infrastructure assets in New South Wales local governmenten
dc.typeThesis Masters Researchen
dcterms.accessRightsUNE Greenen
dc.subject.keywordsPublic Administrationen
dc.subject.keywordsAuditing and Accountabilityen
dc.subject.keywordsAccounting Theory and Standardsen
local.contributor.firstnameIgoren
local.contributor.firstnameBrian Een
local.contributor.firstnameBoyden
local.subject.for2008160509 Public Administrationen
local.subject.for2008150102 Auditing and Accountabilityen
local.subject.for2008150101 Accounting Theory and Standardsen
local.subject.seo2008940204 Public Services Policy Advice and Analysisen
local.subject.seo2008900401 Waste Management Servicesen
local.subject.seo2008900499 Water and Waste Services not elsewhere classifieden
dcterms.RightsStatementCopyright 2018 - Igor Ivannikoven
dc.date.conferred2018en
local.hos.emailhoshass@une.edu.auen
local.thesis.degreelevelMasters researchen
local.thesis.degreenameMaster of Philosophyen
local.contributor.grantorUniversity of New Englanden
local.profile.schoolUNE Business Schoolen
local.profile.schoolUNE Business Schoolen
local.profile.emailiivanni2@une.edu.auen
local.profile.emailbdollery@une.edu.auen
local.profile.emailbblackw2@une.edu.auen
local.output.categoryT1en
local.record.placeauen
local.record.institutionUniversity of New Englanden
local.identifier.epublicationsrecordune_thesis-20180216-134448en
local.access.fulltextYesen
local.contributor.lastnameIvannikoven
local.contributor.lastnameDolleryen
local.contributor.lastnameBlackwellen
dc.identifier.staffune-id:iivanni2en
dc.identifier.staffune-id:bdolleryen
dc.identifier.staffune-id:bblackw2en
local.profile.orcid0000-0001-8143-158Xen
local.profile.roleauthoren
local.profile.rolesupervisoren
local.profile.rolesupervisoren
local.identifier.unepublicationidune:23544en
dc.identifier.academiclevelAcademicen
dc.identifier.academiclevelAcademicen
dc.identifier.academiclevelAcademicen
local.title.maintitleAccounting problems in the valuation of infrastructure assets in New South Wales local governmenten
local.output.categorydescriptionT1 Thesis - Masters Degree by Researchen
local.school.graduationSchool of Humanities, Arts & Social Sciencesen
local.thesis.borndigitalyesen
local.search.authorIvannikov, Igoren
local.search.supervisorDollery, Brian Een
local.search.supervisorBlackwell, Boyden
local.open.fileurlhttps://rune.une.edu.au/web/retrieve/49b1914b-046f-4b48-919d-f68c0a9e99f5en
local.uneassociationYesen
local.year.conferred2018en
local.fileurl.openhttps://rune.une.edu.au/web/retrieve/49b1914b-046f-4b48-919d-f68c0a9e99f5en
local.subject.for2020440708 Public administrationen
local.subject.for2020350102 Auditing and accountabilityen
local.subject.for2020350101 Accounting theory and standardsen
local.subject.seo2020230204 Public services policy advice and analysisen
local.subject.seo2020110501 Waste management servicesen
Appears in Collections:Thesis Masters Research
UNE Business School
Files in This Item:
10 files
File Description SizeFormat 
open/MARCXML.xmlMARCXML.xml5.72 kBUnknownView/Open
open/SOURCE03.pdfThesis1.04 MBAdobe PDF
Download Adobe
View/Open
1 2 Next
Show simple item record

Page view(s)

4,006
checked on Mar 17, 2024

Download(s)

666
checked on Mar 17, 2024
Google Media

Google ScholarTM

Check


Items in Research UNE are protected by copyright, with all rights reserved, unless otherwise indicated.