| DATE: |
October 25, 2000 |
| TO: |
Senior Financial Officers
c.c. Senior Full-time Financial Officers |
| SUBJECT: |
FIS Accrual Accounting Policies |
| I would like to thank all of you for your input
to the FIS Accounting Policy questionnaire issued September 6, 2000. We had a
response rate of over 80% that has helped us tremendously in assessing our overall state
of readiness and, in determining the specific policy decisions we will take on the items
in question. |
| Based on our review of the survey results and
discussions with the Office of the Auditor General and the Department of Finance, the
following policy decisions are being taken: |
| Software: Capitalization on a prospective
basis starting April 1, 2001 will be mandatory. That is, departments must
capitalize allowable costs incurred after March 31, 2001 for acquired and
in-house developed software, regardless of the start date of the project. Software costs
incurred prior to April 1, 2001 will not be capitalized. |
| Inventories: Departments are
encouraged to capitalize inventories (both those for re-sale and consumables), where
material, for 2001/2002. Capitalization will be mandatory for 2002-03. As such, systems
must be in place to determine opening balance positions as at April 1, 2002. |
| Leasehold improvements:
Capitalization on a prospective basis starting April 1, 2001 will be
mandatory. That is departments must capitalize allowable costs incurred after
March 31, 2001. Leasehold costs incurred prior to April 1, 2001 will
not be capitalized. |
| Patents, Copyrights and Trademarks:
Costs relating to patents, copyrights and trademarks will not be capitalized for
2001-2002. A final decision on the accounting policy for these costs will be made at a
later date, and will be guided by the review of Intangibles by the Public Sector
Accounting Board of the CICA. |
| Further information on these matters
will be disseminated in the very near future. |
| If you have any questions or
comments, please do not hesitate to contact me at 957-7820 / Neville.Richard@tbs-sct.gc.ca or
John Morgan at 957-9659 / Morgan.John@tbs-sct.gc.ca. |
