Glossary of Asset Management Terms

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Composite Asset - A composite asset is an asset necessarily assembled from or compromised of assemblages and/or components.

Condition Based Maintenance - Condition Based Maintenance is a maintenance technique that involves monitoring the condition of an asset and using that information to predict its failure.

Condition-Based Depreciation - Condition-Based Depreciation is the determination of accumulated depreciation as the cost in any reporting period of restoring an asset's gross service potential, based on the condition of the asset within the period. Changes from year to year in cumulative depreciation so determined represent the annual depreciation.

Core Asset Management - Core Asset Management is Asset Management which relies primarily on the use of an asset register, maintenance management systems, job/resource management, inventory control, condition assessment, simple risk assessment and defined levels of service in order to establish alternative treatment options and long-term cashflow predictions. Priorities are usually established on the basis of financial return gained by carrying out the work (rather than detailed risk analysis and optimised decision making).

Core Asset Management Plan - A Core Asset Management Plan is an asset management plan that complies with the minimum legislative requirements for an asset management plan, and contains core asset management information.

Corrective Maintenance - Corrective maintenance is maintenance carried out after a failure has occurred, and intended to restore an item to a state in which it can perform its required function. (This may include breakdown or reactive maintenance)

Creation/Acquisition Plan - A Creation/Acquisition Plan is a document that defines how an organisation decides when new assets need to be created and existing assets need to be upgraded, the projected cost of these works and the standards applicable to them. Construction/Acquisition Plans are often a section within an Asset Management Plan.

Critical Asset - A critical asset is an asset for which the financial, business or service level consequences of failure are sufficiently severe to justify proactive inspection and rehabilitation. Critical assets have a lower threshold for action than non-critical assets.

Criticality - Criticality is the quality, state, or degree of being of the highest importance.

Cultural Asset - A cultural asset is an asset of cultural significance, that won't depreciate in value over time. Examples of cultural assets include artworks & antique furniture.

Current Asset - A "current asset" is an asset which is expected to be sold or consumed within one financial year.

Cyclical Maintenance - Cyclical Maintenance or cyclic maintenance is maintenance which is repeated on a periodic basis.

Defect - A defect is an imperfection within an asset that could potentially lead to the premature failure of the asset.

Degradation Curve - A degradation curve is a graph of an asset's condition or remaining service potential plotted over time.

Depreciation - Depreciation is the reduction in the value of an asset due to usage, passage of time, environmental factors, wear and tear, obsolescence, depletion or inadequacy.

Deprival Value - The Deprival Value of an asset is the value of the present owner if the owner were deprived of the asset and was required to continue to deliver the same level of service. Assets are valued at an amount that represents the entire loss that might be expected to be incurred if the entity were deprived of the service potential or future economic benefits of particular assets at the reporting date. This is a valuation basis that reflects a non-market concept of the value in use of assets as part of a going concern.

Desktop Revaluation - A desktop revaluation is a revaluation of an asset classes undertaken without physical inspection of the assets, typically done by applying revised unit rates to known quantities of assets.

Development Manual - A Development Manual is a document that explains a Council's policies and specifications for land development, and specifies the standards that developments must adhere to.

Disposal Plan - A Disposal Plan is a document that defines how an organisation decides when an asset should be retired or disposed of, and the activities associated with the process, including sale, demolition or relocation. Disposal Plans are often a section within an Asset Management Plan.

Economic Life - The Economic Life of an asset is the length of time for which maintaining and operating the asset remains the lowest cost alternative for providing a nominated level of service. "

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