If, at the conclusion of a NPD contract, the public sector retains or accepts the asset or pays an agreed consideration (e.g. open market value), then the public sector is left with an asset with a remaining useful economic life. The treatment envisaged in the contract, and therefore reflected in the shadow bid affordability model, should also be reflected in the CPAM adjusted for public sector management of this transfer.
In practice, there is unlikely to be a material difference between the treatment in the Shadow Bid and the CPAM and it is usually legitimate to exclude the residual value on the grounds that it will not affect the comparison. The key point is to achieve consistency of approach, i.e. include or exclude the deduction in both calculations. However, it is best practice to include the figures as this demonstrates that the matter has been addressed.