DATE:	August 16, 2000	
TO:	Senior Financial Officers and
Senior Full-time Financial Officers	
SUBJECT:	Deemed Historical Costs for Real Property and Infrastructure Assets	

One of the major challenges as we implement accrual accounting is the determination of historical costs for the government’s holdings of real property and infrastructure assets.	
The Chief Appraiser, Real Property Services Branch of PWGSC, has developed a computer-based model, referred to as the Book Value Calculator (BVC), that will provide a deemed historical cost for real property and infrastructure assets.   	
The Office of the Auditor General (OAG) has reviewed the BVC and believes that, if applied with the appropriate information and by qualified people, it will produce reliable information to support the April 1, 2001 opening balances for land and buildings.	
Treasury Board Secretariat strongly encourages the use of both the BVC and the services of the Chief Appraiser in determining deemed historical costs for opening balances in situations where departments do not have the necessary information to arrive at original cost for these types of assets.  Actual cost information and documentation must support all acquisitions after March 31, 2001.	
The OAG intends to rely on the work of the Chief Appraiser as an independent source of audit evidence to support the departmental valuations and the government-wide financial statements.  Thus if departments use both the BVC and services of the Chief Appraiser in determining deemed historical costs for opening balances, then the OAG would audit the files of the Chief Appraiser and would not normally need to audit departmental records.	
Attestations of completeness of the real property and infrastructure inventory across government will be based on the Directory of Federal Real Property.  The Real Property Management Division of Treasury Board Secretariat will provide further details on completeness.	
Questions related to the Book Value Calculator and its use should be directed to Mr. Michael Blaschuk (PWGSC) at 
736-2461.  Questions on accounting policy may be directed to Mr. Ken Wheat (TBS) at 957-9676.  Mr. Al Jowett (TBS), 
957-2510, is available to answer questions on the Directory of Federal Real Property.	

Richard J. Neville
Deputy Comptroller General