A financial planning tool that identifies the current position of a reserve fund and provides a stable and equitable funding plan.
The plan is typically a recommended scenario based on a 30 year projection that factors in inflation and interest rates.
The scenario is meant to offset scheduled common remediation expenditures that aim to renew components to their functional condition.
The depreciation report is built on two interrelated sets of analyses: the physical and the financial analysis, that are combined in the component inventory and its resulting benchmark analysis.
A depreciation report is a detailed standard written document that focuses on and informs the financial objectives of a reserve fund plan, how and when these objectives are to be attained, and how finances need to be arranged to reach these objectives.
Standard principles, definitions, methods and graphical representations are used to ensure that the reports are comparable across strata corporations.
The formulation of a reserve fund plan is a step-by-step annual process during which the council undertakes an objective and critical analysis of reserve fund requirements and strata council identified funding needs.
A depreciation report assists the council in formulating a reserve fund plan that meets their risk tolerance, using a pragmatic budgeting approach.