Residual Life Calculations

In simple terms, the Residual Life is the number of years that a Component has left/remaining before a capital intervention is required. The Residual Life is calculated as the difference between its useful life and the Component’s age plus any residual life offsets (see below) recorded against the Component.

As a Component goes through it’s life, it is expected that it will degrade/age over the years. How any particular Component experiences this ageing process however, will be in accordance with some very local factors relevant to that Component only. This means that any one Component could under-shoot or exceed it’s expected useful life - it also exemplifies how a Component’s useful life is just an averaged expectation, rather than a hard-and-fast rule.

To cater for such variations to lifecycle patterns, the system allows for the Residual Life to be ‘set’ by the user at any point throughout the Component’s life cycle. That is, the user need not modify the useful life of each Component, but rather, can set the residual life to the value they see fit.

This translates to a residual life offset being inferred upon the Component. This residual life offset takes effect on the calculated residual life by being added to the calculated residual life.

It is for the reasons stated above, that the formula for Residual Life in the Metrix Asset Management system is:

It is important to remember however, the Component will NOT start ageing until it reaches it’s Initial Capital Anniversary date. By default, this is 30 June and is listed in th ‘Intervention Summary’ section of the Component info panel.

Inputs to Residual Life

The following provides additional details on the inputs to the residual life formula discussed above.

Residual Life Offset

A component’s residual life offset is an offset applied to the calculated ‘residual life’, to either increase or decrease the resulting value. The residual life offset is calculated by the Metrix Asset Management system as the difference between the calculated ‘residual life’ and the subjectively assessed remaining life. That is:

There is NO requirement of a user to consider the concept of residual life offset when altering the residual life of a component. In fact, a user can be safely ignorant of the concepts of residual life offset. All the user needs to supply (going by the above example) is that the residual life of the component should be 6, not 5. The system will take that value and calculate the +1 years offset in the backend.

If the user were to state that the residual life was actually 8, then the system would calculate an offset of +3 years.

As the residual life offset is applied to the residual life value after the initial basic residual life calculation takes place, the reported residual life will continue to decrease as time passes. The user does not need to do anything for this, the system will handle it all.

Capital Anniversary Dates

A Capital Anniversary date is a pre-ordained time of the fiscal year when a capital asset undergoes an ageing event. By default, Metrix environments are configured for annual (once per year) capitalisation. - however, this can be adjusted to suit the needs of the organisation to frequencies such as quarterly, monthly, or the like.

When a Component is first built, or renewed, it will receive a construction date and/or a last intervention date. The Capital Anniversary event relevant to this date is:

• the Initial Capital Anniversary. This is the date in which the Component will BEGIN ageing.

Throughout the Component’s life, two other Capital Anniversary events are continuously relevant to the Component - the Most Recent Capital Anniversary and the Next Capital Anniversary:

• the Most Recent Capital Anniversary is the most recent date in which the Component underwent an ageing event, and
• the Next Capital Anniversary is the next date in which the Component is scheduled to undergo a capitalisation event.

All of the above Capital Anniversary dates are listed in the ‘Intervention Summary’ section of the Component info panel.

Age

A component’s age is calculated as the difference between the first ‘capital anniversary’ that occurred after the component’s intervention date, and the most recent ‘capital anniversary’ to have passed.

Reports generated from the system support returning the age of a component at a date other than the current date. A report generated at a date of 2 years in the past, will return the age of the component at that date - not today.

Last Intervention Date

The last intervention date refers to the date in which a component last underwent capital intervention works relating to it’s treatment. This includes:

• the original_construction_date of the component,
• the date of major renewal works on the component, or
• the date of substantial upgrade works on the component.

The original_construction_date will NOT change following an intervention (i.e. a reseal for a road surface). Only the last intervention date will change over the course of a component’s lifetime.