Financial Reporting

A valuation for financial reporting purposes in NSW is a formal assessment of the fair value of assets – typically property, plant, and equipment – used to prepare accurate and compliant financial statements in accordance with Australian Accounting Standards and NSW Treasury policy.

Purpose and Context

These valuations are essential for:

• General Purpose Financial Reporting under the Australian Accounting Standards Board (AASB) framework
• Public Sector Compliance with NSW Treasury Policy Paper TPP21-09 – Valuation of Physical Non-Current Assets at Fair Value
• Private Sector A Reporting aligned with AASB 116 (Property, Plant and Equipment) and AASB 13 (Fair Value Measurement)

They ensure that asset values reflect current market conditions, support depreciation schedules, and provide transparency for stakeholders, auditors, and regulators.

When Is It Required?

Valuations are typically required:

• Annually or periodically for financial reporting cycles (e.g. 30 June)
• When material changes occur in asset value or condition
• During asset revaluation programs
• For impairment testing, asset disposals, or restructuring
• To support audit and assurance processes

How Is It Determined?

Valuers apply methodologies consistent with AASB and NSW Treasury guidance:

Fair Value Basis

• Defined as the price that would be received to sell an asset in an orderly transaction between market participants

Valuation Methods

• Market Approach: Based on comparable sales
• Income Approach: Capitalises net income or cash flows
• Cost Approach: Estimates replacement cost less depreciation

Asset Classification

• Assets are grouped by class (e.g. land, buildings, infrastructure) and assessed individually or as part of a portfolio

Reporting Requirements

• Valuation date
• Methodology and assumptions
• Asset condition and location
• Market evidence and rationale
• Reconciliation with carrying amounts