**2. Overview of current knowledge and practice**

Given its origin in the financial sector, where the economic approach is prevalent, the first significant developments in the field of infrastructure asset management were led by ac‐ countants and economists. In the late 1980s, the South Australia Public Accountants Com‐ mittee published a series of eight reports alerting all Australian governments for the need to seriously consider the management of their infrastructure if deterioration of valuable public services were to be avoided (Burns *et al*., 1999). Following these reports, Prof. Penny Burns, at the University of Adelaide (Australia), played an crucial role in bringing to attention the importance of the subject and formalizing key concepts and principles (e.g., Burns, 1990; Burns *et al*., 1999). Australian leadership in this field endures to the present day, through both industry practice and initiatives by organizations such as the Institute of Public Works Engineering Australia (IPWEA, www.ipea.org.au), the National Asset Management Steering Group (NAMS, www.nams.au.com), the Australian National Audit Office (ANAO, www.anao.gov.au), the Asset Management Quarterly International (AMQI, www.am‐ qi.com), ACORN Inc. (www.acorninc.org) and the Water Services Association Australia (WSAA, www.wsaa.asn.au).

The Australian and New Zealand AM school is synthesized in the International Infrastruc‐ ture Management Manual, revised and updated periodically (current edition: IIMM, 2011), which addresses different types of public infrastructures and promotes the Total Asset Man‐ agement Process.

IAM has equally seen significant advances in many other countries, such as in the US (e.g. Clark *et al*. 2010; US EPA, 2012), the UK (e.g. IAM/BSI, 2008; UKWIR, 2003) and Portugal (Alegre and Covas, 2010; Coelho and Vitorino, 2011; Alegre *et al*., 2011). From a practical standpoint, very good examples of leading-edge utility practice can be found in Asia (e.g., Singapore PUB), and in Central and Northern Europe, such as in the Netherlands (e.g. PWN - North Holland), Germany (e.g. Munich, Berlin), Norway (e.g. Oslo) or Sweden (e.g. Stock‐ holm, Malmo).

IAM has also registered scientific developments, particularly with regard to algorithms and tools aiming at supporting pipe rehabilitation prioritization and decision-making. Whole-life costing (e.g. Skipworth *et al*., 2002), as well as life time assessment and failure forecasting, are among the most researched topics (e.g., Sægrov ed., 2005; Sægrov ed., 2006; Malm *et al*., 2012; Renaud *et al*., 2011). From 2005, the biannual LESAM (Leading-Edge Strategic Asset Manage‐ ment) conferences of the International Water Association have clearly demonstrated the in‐ creasing interest and recognition of this field of knowledge (e.g. Alegre and Almeida ed., 2009).

Effective decision-making requires a comprehensive approach that ensures the desired per‐ formance at an acceptable risk level, taking into consideration the costs of building, operat‐ ing, maintaining and disposing capital assets over their life cycles. Brown and Humphrey (2005) summarize these concepts by defining IAM as "the art of balancing performance, cost and risk in the long-term".

IAM is most often approached based on partial views: e.g., for business managers and account‐ ants, IAM means financial planning and the control of business risk exposure (Harlow and Young, 2001); for water engineers, IAM is focused on network analysis and design, master planning, construction, optimal operation and hydraulic reliability (Alegre and Almeida ed., 2009); for asset maintenance managers, the infrastructure is mostly an inventory of individual assets and IAM tends to be the sum of asset-by-asset plans, established based on condition and criticality assessment; for many elected officials, since water infrastructures are mostly buried, low visibility assets, IAM tends to be driven by service coverage, quality and affordability in the short run. Common misconceptions include reducing IAM to a one-size-fits-all set of prin‐ ciples and solutions, mistaking it for a piece of software, substituting it for engineering technol‐ ogy, or believing that it can be altogether outsourced. In practical terms, many existing implementations tend to be biased by one or several of these perspectives.
