Consensus
5
Road earthworks shall be recognised as assets only in accordance with the requirements for the recognition of an item of property, plant and equipment in AASB 116.
6
The depreciable amount of road earthwork assets that have limited useful lives shall be allocated on a systematic basis over their useful lives, based on best estimates of those useful lives. Difficulty in estimating the useful life of an asset does not justify non-depreciation of the asset.
7
Road earthwork assets that are assessed as not having a limited useful life shall not be depreciated. Such an assessment shall be based on engineering reviews of the expected physical wear and tear and technical obsolescence of the particular earthworks and on consideration of commercial obsolescence and legal or other limits on the use of the earthworks.
8
The depreciation or non-depreciation of road earthwork assets shall be reviewed at least at the end of each reporting period, to ensure that the accounting policy applied to particular earthwork assets reflects the most recent assessment of the useful lives of the assets, having regard to factors such as asset usage, physical deterioration and technical and commercial obsolescence.