DATE: August 16, 2000
TO: Senior Financial Officers and Senior Full-time Financial Officers
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