Skip to main content

🧮 ComponentAssumptions Documentation

🧮 QUICK DOCUMENTATION​

  • File Path: /Domain/Entities/ComponentAssumptions.cs
  • Database Table: ComponentAssumptions
  • Primary Purpose: Stores valuation and lifecycle parameters for specific component types
  • 🔑 Key Fields:
    • Id (int) - Primary key
    • ComponentSubTypeId (int) - Links to the associated component subtype
    • UnitRate (decimal) - Base unit rate for cost calculations
    • LongLifePct (decimal) - Percentage of the component with longer useful life
    • ULLong, ULShortMin, ULShortMax (decimal) - Useful life parameters in years
    • RVPctLong, RVPctShort (decimal) - Residual value percentages
    • DepreciationPolicy (enum) - How depreciation should be applied
  • 🔗 Related Models:
    • ComponentSubType - The subtype these assumptions apply to
    • ValuationProfile (as ObsolescenceProfile) - Pattern of obsolescence
    • Component (one-to-many) - Components using these assumptions

📝 DETAILED DOCUMENTATION​

🧮 Overview​

The ComponentAssumptions entity stores detailed lifecycle and valuation parameters that are applied to components during the valuation process. It defines useful life splits between short-life and long-life portions, residual values, unit rates, and depreciation policies. These parameters are critical for the calculation of depreciated replacement cost and remaining useful life.

🏗ī¸ Model Details​

  • Namespace: AVP.Domain.Entities
  • Inheritance: IClientEntity

🧮 Valuation Parameters​

The ComponentAssumptions entity contains several specialized parameters:

  1. Lifecycle Split

    • LongLifePct - Percentage of component with extended lifecycle
    • RemainingPct - Percentage of component with standard lifecycle
    • Different useful lives are applied to each portion

  2. Useful Life Parameters

    • ULLong - Useful life for long-life portion in years
    • ULShortMin - Minimum useful life for short-life portion
    • ULShortMax - Maximum useful life for short-life portion
    • UsefulLifeSelection - Selection method for short-life useful life

  3. Residual Value Parameters

    • RVPctLong - Residual value percentage for long-life portion
    • RVPctShort - Residual value percentage for short-life portion

  4. Depreciation Parameters

    • DepreciationPolicy - Determines depreciation calculation method
    • ObsolescenceProfileId - Links to ValuationProfile for obsolescence patterns

📊 Split Lifecycle Concept​

ℹī¸ Note: The split lifecycle concept is fundamental to component valuation:

Many components have portions that deteriorate at different rates. For example:

  • A roof may have structural elements (long-life) and covering materials (short-life)
  • A road may have base course layers (long-life) and wearing surfaces (short-life)

ComponentAssumptions allows these differences to be modeled by:

  1. Defining the percentage split (LongLifePct)
  2. Assigning different useful lives to each portion
  3. Calculating weighted depreciation across the entire component

🧮 Application in Calculations​

The parameters are used in these key calculations:

  1. Weighted Useful Life

    Weighted UL = (ULLong × LongLifePct) + (ULShort × (1-LongLifePct))

  2. Remaining Useful Life

    Remaining UL = UL × (1 - Consumption%)

    Where Consumption% is derived from the component's condition score

  3. Component Value with Split Lifecycle

    Value = (RC × LongLifePct × (1-DepLong)) + (RC × (1-LongLifePct) × (1-DepShort))

    Where:

    • RC = Replacement Cost
    • DepLong = Depreciation for long-life portion
    • DepShort = Depreciation for short-life portion

📝 Business Rules Applied​

  • ComponentAssumptions are linked to a specific ComponentSubType, providing standardized values for all components of that subtype
  • Components can have split lifecycle characteristics (short-life and long-life portions)
  • The ULShortMin and ULShortMax define a range for the short-life portion's useful life
  • DepreciationPolicy determines how useful life and remaining useful life are applied in calculations
  • The LocalityFactorPct adjusts costs based on regional differences
  • ObsolescenceProfile (a ValuationProfile) can be linked to define obsolescence patterns
  • Each ComponentAssumptions record is client-specific, allowing different clients to use different parameters

⚡ Performance Considerations​

💡 Tip: ComponentAssumptions are frequently accessed during valuation calculations. Consider caching these values when processing large numbers of components to minimize database queries.

📝 Business Context​

ComponentAssumptions provide critical benefits for asset management:

  1. Accurate Lifecycle Modeling

    • Reflects real-world deterioration patterns
    • Accounts for different deterioration rates within the same component
    • Supports more accurate depreciation calculations

  2. Capital Planning

    • Enables accurate forecast of component replacements
    • Distinguishes between partial and full replacements
    • Supports maintenance vs. capital renewal decisions

  3. Financial Reporting

    • Aligns with accounting standards for componentization
    • Provides detailed support for depreciation calculations
    • Enables more precise fair value determinations