EoFY and Beyond: Aligning Asset Accounting with Strategic Planning

Hello, everyone, and welcome to our first Brightly Insights thought leadership webinar for twenty twenty five. Thank you for taking time out of your busy schedule to join us today. For those who have joined our previous webinars, we hope you've been enjoying and learning through these. And for any first timers, I hope you find today's webinar insightful. Before we begin, I'd like to acknowledge the traditional custodians on the of the lands on which we meet today and pay my respects to elders past, present, and emerging. I would also like to acknowledge and celebrate our First Nations people around the world and encourage us all to continually learn from their history and teachings in caring for country. Finally, I'd like to extend and acknowledge, extend the acknowledgment and respects to any First Nations people joining us for today's webinar. So today's webinar agenda is on the screen. We'll run through some housekeeping things for throughout this webinar, introduce the presenters for today, review the key observations from the twenty four financial year, provide some tips and tricks for the upcoming end of financial year and beyond, discuss how that then moves into strategic asset planning, and wrap up with some considerations to facilitate cross departmental collaboration, and then move into questions and answers. So with that in mind, we love your questions and your comments. You have a q and a, function on the webinar, so feel free to use that as things come to mind throughout this session, and we'll look at those as you surround. You also have a function to see the bios of our presenters and a link if you'd like us to follow-up with you about any of our products or services. Our presenters today are Tessa and myself. Yogi was originally gonna join me as you no doubt saw on the initial ads that went out, but he's had some unexpected family commitments come up. So Tessa will be joining us instead. She works with Yodie and the team on implementations as well as accounting and valuations, and we'll be sharing their observations with us today. My name is Michael. I'm a strategic asset management consultant, and my focus is typically on the strategic asset life cycle and service level planning, and developing your asset management plans and, you know, those kind of strategic asset documentation. Again, if you'd like to know anything more about us, you can review our bios on your screen. So with those introductions done, I will hand you over to Tessa. Thanks, Michael. So I'm Tess. I'm an asset management consultant currently working in the, implementation of aesthetic and then also in the, asset accounting and valuations space as well. Before we jump into the financial year twenty twenty four review, please take a look at the poll that we've prepared, on the screen and tick any of the challenges that you may have experienced, whether it's one, two, or all of them, and then we'll have a look at what everyone has produced. Okay. I can see some results coming through. That's good. Okay. Give it another couple of seconds or so. I've got about sixty one percent reporting. Alright. So we can see here the common themes and responses that you've provided. One thing straight off the bat that leaps out to me, lack of resources are always a common problem in the local government space. No major challenges for some, which is always good to see too. Capital works left too late. Communication gaps, that does tend to happen as well. So if we have a look at the twenty twenty four financial year in review, we found some quite a few common themes and issues throughout a number of our end of financial year processing and orderly engagements. This tended to vary across both cap asset capitalization and revaluations as well. In the capital workspace, the three main issues that were identified, which as we saw in that poll, were also common themes for, you guys watching today. The first of which was left too late in the year to complete to a high standard. So this in itself brings delays to the financial capitalisation process due to outstanding invoices and unfinished physical work. Being unable to compile the detail required from project managers and finance staff to allocate those costs appropriately, is also a result of those delays. This brings forth the potential for unwanted WIP value at the end of the year, which, as we all know, old WIP is always a concern for our auditors. Another key item within this space is rushing the capitalisation process can then cause errors and increases the risk of inaccurate reporting. The second key issue that we found in the capital workspace was that disposals within our renewals were either neglected or worse, not considered at all. This can pose problems as an asset's value is then not accurate and can be overstated if the disposal is not treated appropriately. The value of what was replaced or renewed was not deducted as part of that renewal transaction. This is a common area, is capitalising to a new asset, for example, a building fit out renewal rather than disclosing of the appropriate value at fit out component level and renewing it against that same component. This inaccuracy of disposals also impacts the depreciation values, so essentially overstates depreciation, and potentially can result in poor decision making when it comes to your future renewal planning as a council. The third main issue we identified within the capital workspace was some instances where a council would maintain two separate registers, one being engineering and the other being accounting. This presents risks when it comes to data accuracy and consistency, and it may also cause a duplication of data or even missing an entire asset capitalisation transaction and record, which as, you know, uncommon as that may sound, it does actually happen. Not utilising a single register as a source of truth can have overarching negative ramifications in the future, the need for rework and further accounting corrections, whether that's during your audit or after your audit as well, which isn't necessarily the way in which we want to be doing things. In the reevaluation space, we had four key issues and trends that were identified. There was a much higher level of audit scrutiny on revalves. This placed a lot more pressure on councils to ensure that their financial records were, and results are in courts were accurate and reconciled, correctly. We also found that there was no revaluation cycle implemented in some cases. This in itself is not advisable as it doesn't align with local government legislation, and it can make budgeting for such activities quite difficult is there if there isn't a set plan or cycle in place. This planning of your revaluation cycles can be easily integrated into your long term financial plans and annual budgets, which are then endorsed by your elected members and a commitment that must be met by council. The third key issue for revalves was componentisation was not applied or not applied consistently throughout asset classes. This can present issues and inaccuracies when it comes to depreciation and the distribution of value of an asset. And the fourth and probably one of the most, potentially problematic issues that we found as well as part of our revalves was that useful lives were not being reviewed and or aligned across our asset classes. This can present inaccurate asset value and depreciation rates if the useful life assigned to an asset isn't appropriate. It's also key to remember that double a s b double one six requires componentization and allocation of appropriate useful lives. So with all of that in mind, what strategies can we implement to set us up for success in the twenty twenty five financial year and into the future? A good place to start would be to ensure that there is clear decision making around what projects fall within your operational budget and what projects fall within your capital budget expenditure. You might ask yourself, which of our projects should be captured in which budget line? How do we then make this this decision? Perhaps you might prepare a flowchart or a decision making diagram that aligns with your council's accounting policy as it would then provide you with a clear and definitive resource to assist with this decision making process. You could include your capitalization threshold values for each asset class and also include questions in our decision making diagram such as, is the activity a lack for lack replacement? Is this work going to extend the useful life of the asset? Is the work purely for aesthetic and appearances? We also need to remember that it's a key to make reference to any relevant accounting standards that would influence these decisions, for example, double a s b one one six. There are also other resources available to you that would assist with this with the preparation or this decision making process as well, and they can be found, via IPWEA and also CPA Australia. Another key thing for your asset capitalization and disposal process is to keep in mind the timeliness and preparation of the activities involved. So a few things you could implement would be monthly or quarterly dates to capitalise, disclose, of assets, and meet with project managers to get ahead of that end of financial year rush. So for example, if you have a capital project that's completed in September, and the asset is being used by the community, therefore, it's to be capitalised at that time, then you can go through the motions of capitalising that asset in your accounting system and a sec, and have that finished and ready to go prior to, June, July at the end of financial year rush. Another key thing to keep in mind is the potential for encouraging a culture that makes the capitalisations and disposal of assets a priority rather than being a predominantly asset maintenance driven council. You can also incorporate these activities into your yearly budget and asset renewal planning processes, as, essentially, it's the final piece of the puzzle for your asset renewal. Something that I actually can really get around is due dates and cutoff dates. So, essentially, it's the point in time when you close your books for the financial year. It's strongly recommended that you would then communicate these dates to everyone within your council that's involved in this process, and, also, you can communicate them to your auditors as well so that they are prepared and ready to go before they, on-site at your council office. This date should also be included in your, budgeting and financial year planning processes as asset capitalisation is in fact a key part of the asset lifecycle and activities. A significant tool, that and resource that we can use is our asset accounting policy. So asset accounting policies are a legacy requirement and an excellent tool for providing those parameters for your end of financial year processing and asset capitalisation. It's quite important as a council to ask yourself, when was the last time we reviewed our accounting policy? A lot of our clients will have policy review procedures in place to ensure their policies are current and up to date, and this same review process can also be applied to your accounting policies. Within your current accounting policy, are there capitalisation thresholds in place? Are they still appropriate? Do we need to update them? Discussing and analysing project costs from previous financial years can assist with the establishment and decision making for these thresholds. Neighbouring councils may also be able to provide you with insight and assistance as well. And as we all know, it's very helpful having that knowledge sharing happening in our space. You can also investigate and ask yourself, are the responsibilities of our organisation clearly defined for the entire capitalisation process? Are finance, engineering, and GIS aligned and moving in the same direction? And finally, would it be worth preparing and implementing an asset management guide within our council? The intent of this type of document would be to encompass the entire asset management process from renewal forecasting to the asset being used by or for the community, and finally, the asset capitalisation and accounting processes at the end of the financial year. In the revaluation space, the implementation of cyclical revaluation schedules is quite important. So in according to the Australian accounting standards, reval shall be made at an adequate regular interval to ensure the carrying amount does not differ from that which would be determined using fair value at the end of your reporting period. We also must remember that an entire asset class must be revalued rather than selective revaluation being a the approach that we follow. The most costly way cost effective way, sorry, typically, revaluations applied typically using indexation. And all this information and the parameters around that revaluation cycle can also be incorporated into your asset accounting policy, which then adds that another layer of accountability as that document would typically be endorsed by your EMs. Here we have a cyclical revaluation schedule example. So on the far left hand side, you can see the different financial class and subclass breakdowns based on our asset classes. And as we move to the right, you can see the different financial years that each of these types of revaluations fall on. So a table very similar to this or even this exact table, if you felt inclined, could quite easily be incorporated into your budgets and long term financial plans. And you may even be able to put a smaller condensed version into your a into your asset management plans as well so that that information is, readily available to those who need it. Another thing that we also need to be very mindful of is the application of appropriate componentization. To identify components, we need to consider how the asset is managed from an asset management perspective and what part of the asset comprises significant costs while also considering the different useful life parameters of those components. Double a s b double one six requires each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item to be depreciated separately. This in itself brings forth the need for appropriate componentization. Componentization also ensures that each depreciable item that makes up one asset can be valued independently. For example, a HVAC system in a council building. Some entities don't follow appropriate componentization at all, which can be quite problematic. In other instances, an entity will base their components on multiple stages of construction, which is also not appropriate. Excuse me. Complinitisation while capturing the multiple depreciable items of an asset will also allow for the measurement and monitoring of how an asset's service potential is being consumed. In the next slide, we have an example of the building components with descriptions on the right hand side of our, screen as well. This is just one example of a suggested component breakdown, and there are other examples for different type of types of assets that can be found in other resources, such as our beloved IPWEA handbooks. Another key issue and point in the revaluation space is useful life application. The useful life of an asset is not necessarily the equivalent to its physical or economic life, as there's many factors that influence an asset's useful life being reduced. This includes obsolescence, so outdated infrastructure that's no longer fit for purpose, changes in community expectations, wants, and needs. So this could be master plan changes, elected member changes after an election, technological advancements, and even shifts in your community demographics. Increased demands and capacity, a prime example of this, which is maybe a bit more relevant to our smaller councils in regional areas, but community waste management systems, as they may struggle to cope with a significant increase or sudden increase in population. There's also new legislative requirements as well. An example that I can draw on personally from my time working in my local council is that the quarantine and EPA requirements impacting council owned and operated sale yards and the movements of livestock. We also have unexpected environmental events, such as floods and bush fires, which I know will hit fairly close to home for some of us. The factors that could be considered when reviewing an asset's useful life include, useful lives talked about other organisations and neighbouring councils. As I touched on earlier, it's quite advantageous to share resources and knowledge with neighbouring councils as there's no need to reinvent the wheel if we don't have to. There's also the average condition of assets nearing the end of the expected useful lives. Condition data can be very helpful in useful lives. Condition data can be very helpful in as a tool used to gauge how long similar assets are expected to be serviceable to our community. Using definitive and quantitative data in this context may provide you with clear evidence to then make decisions around adjusting the useful life of a particular type or group of assets. There's also the typical design life of an asset while being considerate of construction practices, assumed workmanship, and quality. This particular aspect of an asset's design life also incorporates the material that makes up that asset. For example, you may have different unsealed road composition materials that that may behave differently when they're wet or when you have significant rain events, and as a result of this they might deteriorate a lot more quickly than you would first expect. There's also the frequency of use and type of use of an asset that would impact the design life. For example, heavy vehicles on estimated useful lives. So, essentially, if there are a large number of assets reaching the end of their useful life before their forecasted estimates, they would need to be reviewed by the individuals that manage those assets or own those assets and then amend those useful lives where required. And now I'll pass on to Michael to discuss the strategic aspects. Thanks, Jess. So there were some great insights in there and common themes that we see flowing through to the strategic asset planning side of things. So what are we talking about when we mentioned strategic asset planning? Well, generally, we work with your engineering or your your asset teams on the predictive life cycle modeling for your asset portfolios. So your accounting processes state the value and the condition of your assets as at thirty June of a a given year. We wanna project out what your next ten to twenty years look like from a, service level, a condition, a risk, or a required funding perspective, under various budget or service level scenarios. That becomes a key input in your asset management plans, your asset plans, financial reporting ratios, or or the various requirements that we have across the country. So what I've got on the slide deck here at the moment is where that could fit within your process. Right? And where possible, I encourage you to consider this as part of the revaluation and accounting process. So it might look like in quarter one, you're kicking off your condition audits. You know, your budgets become approved and available. You're getting your contracts out to market or you're gearing up and mobilizing your internal teams to do whatever that condition assessment methodology looks like. And you can see with the revaluation there in the second line, I've overlapped that a little bit with when the condition audit's going. The idea there is, you know, you're you're kicking off your revaluation. You're reviewing your useful lives and your unit rates, much like Tess has just been talking to before your condition order comes back in. So when you have all of that data, you can, you know, proceed with processing your your revout. The third line there is then your valuation and accounting and the financial year processes. I'm sure everyone here is familiar with what that involves. I didn't wanna split that out too much. But the next line, the strategic asset planning following on from that when you wrap that up on after thirty June, you know, like, you've done your your final audits. You've got your final approved, ticked off asset values, your condition data, your finalized register from that process. That's what we wanna be picking up and bringing across to the strategic asset planning process. We probably will or we typically prefer to use the raw condition data because it has much more indicators in it on the the asset performance, but where possible, we wanna make sure that aligns with the, the accounting register. Out of the strategic asset planning process, you get your works candidates per year over that ten, twenty, twenty, or longer year, planning horizon, and that flows through to your capital works program where they, you know, work out how they're going to turn these into project scopes, consider economies of scale, and deliver the projects. That flows through to the budget process, the long term financial planning process, for subsequent years. Now, obviously, you don't do a full rebal of every asset class every single year. So here we're, you know, proposing that you do this process in alignment with the asset class that you are rebelling, hopefully, on a cycle much like Tessa just ran us through. And for the other asset classes, the capital works planning is just updated with anything coming out of that accounting process every year, and you do the full refresh, the full review of the model in alignment with your accounting and revaluation cycles. So with that process in mind, what have we noticed? What have we observed? The first thing is you condition audit methodologies. So when you're scoping, when you're putting forth your condition audits, are you considering your engineering and your life cycle planning requirements? We had an example recently where a building condition audit was, undertaken. It included initially both the revaluation requirements and the level two assessment for the strategic planning. But for various budgetary constraints, that was descoped to just be the revaluation component. When we came to work with the council on that strategic planning, we found that we didn't have the level of of data that we needed to build that that process out. So that engineering team was then looking at going to get level two assessments. There's a couple of issues with this. The first is that you're paying for two separate audits. You're losing the economies of scale. So overall, the audit process is costing that council more money than it would have if it was done in one hit. Secondly, they're they're a year behind where they wanted to be on that strategic planning. So they can't give the confidence that they're delivering an optimized works program for the condition of their network. They're picking the projects they think are gonna give the best, outcome for their community, but they don't have the confidence that the data they're working from is is current and up to date in how they've selected those. So there's a few losses that have occurred in terms of not scoping it correctly initially and not proceeding with the correct scope, that they are currently working through. Secondly, when you're looking at your condition audits, is the extent of the asset class network being assessed appropriate? So I was working with a council that was doing a road audit, and the auditors were proposing doing ten percent of the road network per year over a ten year cycle. We turned around and we said, look. Yes. You can do that. Sure. But what we recommend is doing a hundred percent on a five year cycle, again, much like Tessa's suggested earlier. And there were a couple of reasons we were encouraging this. The first was that it acts like a stock take. So getting that full condition audit done by an external auditor of that register meant that if there was anything in there that they couldn't find in the field, they got that feedback and validation. If there was extra stuff found in the field, they could then review those as part of that accounting evaluation process of whether those, found assets needed to be included or if they were owned by other entities. Secondly, having the full network assessed at the same time helps you optimize where you're investing your renewal budgets and getting the best outcome across the whole network. And finally, those, condition audits typically come with photos. So if there are any questions, any validation required as why you picked project a over project b, You've got that evidence in history. And if there's ever a a future weather event, for instance, that means you're doing insurance claims, again, you've got relatively, up to date data and up to date photos of what that asset looked like before, that impairment event happened. So that made the auditors comfortable, and we were able to proceed with a hundred percent of the road network. Conversely, when you're looking at something like stormwater networks, it's not feasible. It's cost prohibitive to do a hundred percent of the network within a given year. So typically, what we see is a small portion, couple of percent, two, three, four percent that is done as a representative sample of that network. Now when you're looking at doing those smaller representative samples, our recommendation is to distribute it throughout the network. So if you have different, you know, soil types for underground assets, different construction methodologies, construction materials, anything like that, you distribute the portion that you're gonna do amongst it all so you can see if the respective areas are performing how you expect over time or if there's any adjustment. That obviously flows back through to the revaluation process, but then when we're looking at strategic modeling, long term project identification, we can be targeting those works candidates a little bit better based on on how the network's performing against what we are assuming it is from an age based approach. So, yeah, thinking about your condition audit methodology and making sure it's consistent and useful across your organization is one thing that we would highly recommend. Before I get into my second point, I just wanted to have a quick poll about useful lives. There's two ways we've seen them done. The first is the time to renewal works, so typical times between your treatments. The second type that I've seen is the type, the time that the asset is available for use, so time from construction to failure or end of life. Please, yeah, give us a bit of feedback in the poll what you are doing. I know this is a little bit of an oversimplification in terms of how useful lives are developed, but I'm interested to see, yeah, what our attendees today are doing and what, and what, yeah, this group typically do. Yep. So I can see we're getting some results in. I'll just give it another ten seconds to get a couple more. We've got about thirty five percent so far. Righto. So we'll move on and see the results. We've got about sixty percent. So you can see that we've got a bit of a split in terms of how useful lives are being assessed within the accounting system. What I've typically seen doing the strategic planning for councils across the country is that it tends to be the second option here, the time to failure, and intervention's typically a little bit earlier. But I have also seen useful life used as the time to when renewal works at the reason is that this matters when we're looking at strategic planning. If we look at how an asset or a component of an asset performs over time, you can see on this graph here on the y axis, we've got condition. On the x axis, we've got time. And over time, that asset will degrade in condition. The shape of that degradation profile varies per asset. That's not that important here today, But the principle is over time, condition gets worse. At some point in the future, in this instance, at total end of life, you'll do a capital treatment that'll bring that condition back up to the the as new, which in this case is a thousand dollars. There may also be, though, an earlier treatment that you can do that's a little bit cheaper, in this case, two hundred dollars, that returns it to, that as new condition. The earlier treatment is what we would typically be trying to model. We wanna importance of how we, assess and understand what the useful life is then affects how we model it. So if your useful life is your useful life to total failure, we'll model that as the time from new to that CapEx thousand dollar treatment, the red point on the far right. If your useful life that you've adopted, though, is the useful life to treatment, which is point d on this graph, and that's not understood and that's modeled as the the time to total failure, what you're actually doing is you're doing is you're gonna be shortening the life. So a simple example is if you look at a a road surface, a spray seal, let's say it's gonna last for fifteen years. If that fifteen years is that red point, point f essentially, then your point d, your intervention point, is gonna be at about eleven or twelve years. So by shortening up the intervention between treatments, you're actually inflating the total cost of your renewal projections over time, which is an inaccurate, representation of how you do works. Conversely, though, if your useful life that you're including in your, in your accounting register is to that and all of your treatments are occurring at point d, say, then you're actually doing your renewal works more frequently than your depreciation schedules would advise. So in this instance, what's gonna happen is you're gonna be seeing higher renewal costs coming out of your strategic planning than the depreciation or the accounting system is posing. I'm not here to tell you which way is right or wrong in terms of how to assess your useful lives, but the point that I'm making here is understanding how those useful lives have been determined, how they're being applied and utilized across your organization in the different parts of the process from revaluation to strategic planning will have very real impacts in terms of your future budget, projected requirements and how accurate that is for project delivery and project timing. A very similar concept is replacement costs. So, the question here and the observation here is do you have very clear, definitions of what your replacement costs include or exclude? Some models that we build, if you think about a parks and open space model, you have lots of different asset types with, lots of different unit rates. So you've got your bench seats, your picnic tables, your barbecues, your shade structures, playgrounds, bollards, a huge variety of assets that we typically wanna model together. Because when you go and do a master plan for a park, you're gonna replace all of those assets. Right? We don't wanna be reinventing the wheel in how we value all of those assets through strategic planning. We wanna leverage all the work that's been done through the accounting and valuation processes. Right? But if your accounting and valuation processes are all at greenfield, say, you're not taking into account any of those project costs or site specific constraints, then when we do the modeling and we hand that over to the capital planning process, they're gonna come back and say these budgets are too low. You've got to bump them all up. Or if they don't do that review, you're gonna continually have budget blowouts into the future from what your capital projects are projecting from the strategic planning side versus what the actual delivery costs are. So we wanna be applying a factor there coming out of what the accounting process says to what the actual delivery cost would be to account for the those rings. Similarly, if you already value a brownfield, what does that actually include? Does it include all of your project overheads? Does it include capitalizing staff time, or is that excluded as opex expenditure? Again, I'm not here to tell you what's right or what's wrong. What I'm here to say is make sure that that's clearly understood from both the accounting and the engineering or the asset planning perspectives so we can do the comparison of this is what's coming out of the accounting process. This is what's coming out of the life cycle asset planning process. And, yes, we're starting to get some different numbers of what the future may look like, but here are the reasons why. We can talk about how the useful lives have been applied a little bit differently. We can talk about how the replacement costs have been applied that little bit differently. So those are some of the key observations that we see when we're building models out. From that perspective then and from what Tessa was sharing earlier, what tips do we have for cross department collaboration? So the first is to consider the revaluation, asset accounting, asset life cycle planning, and capital works program development as a holistic process. So I'm a big fan of making sure that whatever we do, makes everybody involved lives easier. You know, you don't wanna get people involved in a project just to have them involved, just busy work for busy work's sake. You wanna make sure that whatever they're doing is making their life easier. So if the Capital Work Works planners, the asset planners, the life cycle planners can see that all of those inputs that they're putting into the revaluation, accounting process flows through to benefit them in terms of how they do that strategic planning, then they're gonna be more engaged in the process, and they're gonna be more able to collaborate through there. Secondly, on a very similar note, involve them early and often throughout that process. So making sure they all understand what your use for lives are, what your, replacement costs are, how they're being calculated, and making sure that everyone's on the same page there means that when the two processes are are completed, the accounting versus the strategic planning, and you may have some discrepancies, there's very clear understanding of what they're caused by and what things you need to be looking at in the future to reconcile them if they are, you know, material and of concern. So getting everyone involved, common understanding, helps facilitate that whole process. And finally, when you look at how you capitalize assets, you do your treatment, you know, in that accounting towards the end of the financial year and how you update your asset register. Keep in mind that that's what's gonna flow through to the Futureworks planning. So, we've had a bit of a chat. Tess has talked about how you capitalize or how you determine what's OpEx versus CapEx. Considering that the way you capitalize those within your asset register, the way you componentize those in accordance with AASB may be what influences how they're delivered in a renewal program in the future can help inform how you manage that. And it comes back to that old adage of, you know, rubbish in, rubbish out. If your register is full of stuff that's not accurate or partially, you know, completed in there, then you're gonna have problems with your future work planning. Similarly, though, if your engineers, your asset planners can see that what's going into that register actually feeds through that capital works program, how their works candidates are proposed, and how they then proceed on to deliver capital works, they're gonna be more willing to engage towards the end of that project to feed good data back into your register to make sure that, again, that future life is easier when they come to doing future works planning and future works delivery. So with that in mind, I highly, encourage you to consider strategic asset planning as part of your reval cycle to build it in. We typically do that when we're working with clients. That's how our managed services tend to be structured anyway. But for your internal processes, that is something that we would highly recommend. With that in mind, that concludes the, the topics that we wanted to share with you today. We'll move on to questions and answers now. Reminder that you do have that feature on the webinar to submit any other questions that are coming to mind throughout the, throughout the content today or anything else you'd like to ask. We'll do our best to answer as many as we can today, but if you're asking something that's a little bit too specific or something that would benefit from a bit more discussion, we might table those and come back to you in the following days. Okay? So, Tessa, do you wanna pop your, camera back on there? And I haven't been keeping up with q and a. I'll have a quick look now. Are there any questions you wanted to answer? Straight off the bat, yes. This webinar is being recorded and will be that recording itself will be accessible to all of you that have registered to attend. So there won't be any issues there. With question three from Brendan, how do you suggest ensuring timely handover to ensure insurance requirements? This would have sent you would treat this the same as how you would with that valuation process and the planning of those activities and the planning of when you start to get that information ready for your capitalization as well. So you could essentially work backwards from when you need to have all of your end of financial year, reports and documentation ready for your auditors, and then map out how long it's gonna take for you to complete each of those activities, and then that would then allow you to figure out where those insurance requirements would slot into that timeline. What else would see here? Question. So there's a, there's a comment here from, Ian saying the valuation of assets timeline is brought forward to April rather than June to enable audit risk committee to sign off on the financial accounts in June. Great point. The timeline that I had was just a a sample to mostly focus on how the strategic asset planning follows after the accounting evaluation process. Absolutely make sure that how you look at that is in consideration of those other internal milestones that you have, and anything else. You know, I know that auditors like the mid year, the interim audit as well that's considered in there. So make sure that those sorts of things are considered as well in terms of how your timelines are are set up. Going to question five from John Stewart. If you amend the useful asset type by policy, do you then apply this to your renewals and new transaction as they occur until the next opportunity at the next cycle of revaluations for every asset record in this class? To the first part, yes. So let's say you do update the useful lives for a particular asset type of class, and that is written into your policy, goes to a council meeting, gets endorsed by your elected members, and you're good to go, and now you need to use those and apply those useful lives. Any renewals and new, acquisitions or transactions for your assets as they occur within that same financial year, you would then apply those you that useful life. However, when like, you may want to do a re essentially, like, an internal desktop reevaluation to then apply all those useful lives, those updated useful lives, sorry, to each impacted asset class, or you could do that as part of your comprehensive rebal as well. So I've got a question here from Nathan. I think we're looking at the same one there, Tessa. Yeah. How much impact does an asset management policy and strategy impact on the asset plan? So the asset plan is, I'm assuming that you're in Victoria there. The asset plan is a, local government act requirement, and it talks about the ops maintenance renewal upgrade new, and having all of that included for all of your asset classes. That is obviously impacted by your asset management policy and strategy because they should outline how you manage your assets throughout that process, but the the detail you would typically see in the asset plan itself. The asset management policy and strategy typically are internal documents as well. I have seen asset strategies, made public, whereas the asset plan is required to be a public document that's gone through the, deliberative engagement process. So I would say, yeah, the the policy and strategy feed into the asset plan, and they should help define, you know, your levels of service and the like within your asset plan. Sorry. I'm just having some technical difficulties with my amounts at the moment. Trying to scroll through this list. Question fifteen from a useful life review in brightly. Any specific reports that can be used, or is it Excel that works outside of brightly? So you can pull all of the useful lives that you've applied to all of your components, and associated assets out of a set of using using the search module function and other reporting functions as well. That those datasets would then be exported to Excel, and then you'd be able to view and manipulate the data from there. There's a question here from Emma. Generally, what departments conduct evaluations? Is it a combination, or does it sit within a specific department like assets or finance? Tessa, I'm open to your thoughts, but my experience is that it basically gen differs per organization and where those roles and responsibilities sit. Mhmm. I've been involved in the processes that are led by finance since they control or they have the clearest insight in terms of what money is being spent where, and they get the engineering inputs as to how that translates through to those valuation lives and the like. I've been involved in organizations where that sits with assets because they are the bridge between finance and and engineering. I've less often seen it held by the engineers, but I have seen some engineers that run that process too. So generally speaking, I'd say somewhere between finance and assets, but I have seen entrances. My thoughts on that are quite similar. It tends to vary quite a bit from council to council. Like, in my local council, there is a lot of overlap. Like, the asset management team sits within finance, and corporate services, but then the maintenance of those assets sits within operations and infrastructure. So those two teams then have to work together to coordinate their revals and then also the capitalization process as well. So it does tend to vary, and you can, you know, make it work in whatever way is best for you and the resources you have available to you as well. Where are we? Karen, do you have any people joining? Yep. I think we're looking at the same one again, Tessa. Do we have any tips for a good asset handover or capitalization process? So I've got a couple of thoughts being an engineer myself. The first is making it very clear that it's part of the project. We have historically implemented that a project is not finalized until the handover and capitalization process has been completed. So it stays as open on the respective project managers' desks as something they need to report on on whatever your set frequencies are, monthly frequency, as to why that hasn't been completed yet. So I think that's generally a good way to lead it with the the stick approach, approach, so to speak. From a a carrot approach, it's about coming back to what I was saying in the the cross collaboration of, showing them how it's gonna benefit them and how they're gonna get the outcomes from actually providing that back. Obviously, once they deliver works, it shouldn't come up for work again in the next five to ten year. But in the future, like, if they're feeding back that data to you and they can see the benefit of doing that and how it then helps them in the future, that also helps get them on side with, ensuring that that is included. In terms of other tips, making sure that the process is very clear and quick and easy to follow. So the more cumbersome, the more, convoluted it is, the harder it is to get engagement. So any kind of handover documentation, spreadsheets, as constructed plans, all of that, make sure it's very clear what they need to do, and it's as simple as possible. Mhmm. Those activities as well, you can incorporate into you know, say, if you were to prepare an asset, management guide, or you could even have it as an appendices in your asset management plans as well, which because those AMPs are reviewed by your elected members and typically endorsed by council, that then provides the extra level of accountability that you can then hold all of those parties involved to, when they're going through that asset capitalization process. Absolutely. Regarding Simon, just kindly provide more comments on closing ledger at thirty first of May. That, is entirely up to each council, really. So there isn't any, like, accounting standards or requirements, for that cutoff date. It's really just that, like, you you know, we suggest thirty first of May just to allow yourself, enough time to get everything done that you need to prior to your auditors being on-site. So all your asset capitalization, the finalizations of your, of your financial notes, and other, balance sheets, reports, so on and so forth. So, it, again, varies from council to council. If you're a very small council, you might wanna have a bit more time up your sleeve, because if you've got, limited resources to prepare all that documentation and make sure everything is hunky dory, then you're gonna wanna have more time. But if you have more resources available to you, then you might only, you know, need a month as you, you know, cut off time. Yep. Yep. Got another question here. Have you seen an example of this end to end process within the state government agencies? So personally, I typically work with the local governments. I have several managed services where the the, the scope of work is that the reevaluation is completed, and then we do strategic planning off the back of that much like the time frame that I've talked to here and works very, very well, hence why I'm encouraging it today. I personally don't work with state government agencies on that same type of engagement, but some of my colleagues do, so I can follow-up with them if you'd like to see if we do have any state governments that are doing a similar process. Oh, I know. I think with that, that is the questions that I can see. Tessa, are you seeing any other ones? There's a few that we will follow-up on. So, Simon, your query about general thoughts on selection of most appropriate indices for revals in intermediate years, we'll provide a more detailed response specific to you for that one, after today's session. And, Nadine, with your query regarding the presentation slides, you'll receive the recording, and that will include the slides as well. Fantastic. Well, with that, that's what we had to share with you today. Thank you so much for coming along. Again, taking the time out of your busy schedules to join us today. Thank you for the engagement as well. It's been really interesting to see both the feedback through the polls, and the questions on today's content. So we really appreciate that. And, yeah, hope you enjoy the rest of your day. Alright. Thanks, everybody. We'll see you later.