Transfer Payment and Financial Reporting Branch Ministry of Education Implementation of Tangible...

Transfer Payment and Financial Reporting Branch

Ministry of Education

Implementation of Tangible Capital Asset (TCA) Reporting

TPFR Information SessionsFall 2007

2Transfer Payment and Financial Reporting Branch


Topics to be discussed

Why & What? Relevant PSAB Handbook Section & Guideline

When? Timelines

Where we’ve been and where we’re going ? Background & Steps Taken to Date Next Steps



PSAB Handbook Section & Guideline

PS 3150 - Tangible Capital Assets Handbook section approved September 2006 Applies to all levels of governments Applicable for fiscal years starting on or after Jan. 1, 2009 Includes the following:

definitions of TCA how to account for them how to measure and amortize them when to write them down and how to dispose of them presentation and disclosure requirements transitional provisions for local governments



PSAB Handbook Section & Guideline

PSG-7: Tangible Capital Assets for Local Governments Provide transitional guidance on presenting information in

notes or schedules to your summarized financial statements

Applicable for fiscal years starting on or after January 1, 2007 = 2007/08 school year

Disclose information by major asset category Disclose information that you have, as well as excluded

categories



Implementation Timeframe

2006/07 = No implementation requirements

2007/08 = Note disclosure requirements Using March 2008 data

2008/09 = Full Implementation requirements In order to have the information available for the

government fiscal year April 2009 – March 2010

Early



What’s been done…… Where we’ve been

Jan - Apr 2005 Prepared a valuation methodology for land and building

assets Received acceptance from the OAGO in April 05 “Capital Asset Valuation Proposal” is on the TPFR

website

May 2005 Hired ORC to assist in gathering and preparing input

data for the Book Value Calculator (BVC) application tool

Created the “CAPEdu” website tool for board data entry




June – October 2005 Created an Excel template

Collected first round of TCA data from DSB’s For land & building assets owned as of March 31, 2005

Data was verified then dumped into “CAPEdu”

June 2005 ICAO Meeting = Proposals relating to consolidation

Book Value Calculator & Specified Procedures

September 2005 First collection of 5-month capital activities report

(April - Aug 05) Specified procedure reports on this data




Oct 2005 ICAO Meeting = Update on consolidation issues

Oct 2005 - March 2006 Boards entered historical cost information in CAPEdu

(if available) Other information where cost was not available Portable structures module - year and size only Boards locked data as confirmation process ORC Appraisers valued buildings and land Input information into BVC

Dec 2005 Interim review of input data by OAGO



What’s been done…... Where we’ve been

March 2006 First collection of 7-month capital activities report

(Sep 05 - Mar 06) Specified procedures reports on this data

May 2006 Prepared capital entries for Public Accounts of Ontario

May – June 2006 OAGO Audit

October 2006 Issued 1st draft Tangible Capital Assets Guide for discussion



What’s been done …... Where we’ve been January 2007

ICAO Meeting = Discussion of draft TCA Guide and Implementation Issues

Issue 2nd Draft TCA Guide

March 2007 Information session for DSB’s TCA Implementation Issues and Systems

September 2007 Issued Final TCA Guide Re-opened CAPEdu website (view only)

http://204.40.6.15/CAP-EduPrevious logins still active – hit “Forgot Password”New logins – email [email protected]



Overview of TCA Guide

“School Board and School Authorities Tangible Capital Assets Accounting Policies and Implementation Guide”

TCA Classes Established different classes What’s included in each class Capitalization threshold for each class Useful life of each class Method of reporting each class

How to Deal with Changes to Useful Life

TCA Management & Internal Controls

Available on TPFR site: http://tpfr.edu.gov.on.ca/Reporting_Entity_PolicyDocuments.htm



Pooling of Assets

Similar capital assets are grouped in one tangible capital asset class

No individual tracking of each tangible capital asset in the class

Assets remain in the asset class until it is fully amortized

- no actual disposals, “deemed disposals”

No significant advantage of tracking the assets on an individual basis - balance would not be materially different



Accounting for TCA Classes

Non-Pooled

Buildings (40 yrs)

Other Buildings (20 yrs)

Land & Land Improvements with Infinite Lives (nil)

Land Improvements with Finite Lives (15 yrs)

Equipment (15 yrs)

Vehicles < 1 ton (5 yrs)

Vehicles = or > 1 ton (10 yrs)

Pooled

Portable Structures (20 yrs)

Furniture (10 yrs)

Equipment (5 yrs)

Equipment (10 yrs)

Computer Hardware (5 yrs)

Computer Software (5 yrs)



Capitalization Thresholds

Buildings (3 classes) $10,000Land $10,000*Land Improvements $10,000Furniture $ 5,000**Equipment (5 yrs) $ 5,000**Equipment (10 yrs) $ 5,000** Equipment (15 yrs) $ 5,000Vehicles (2 classes) $ 5,000Computer Hardware $ 5,000***Computer Software $ 5,000

* Capitalize all upon initial purchase ** Threshold doesn’t apply to first-time school equipping** * Or if bulk purchase order exceeds $25,000



Data Flow Summary

March 31, 2005 Excel CAPEduHC EnteredOther Data EnteredRecords LockedAppraised Values

Info Input into BVC

Output from BVC

Excel Apr – Aug 05

Excel Sep 05 – Mar 06

Excel Apr – Aug 06

Excel Sep 06 – Mar 07

March 31, 2007Gross Book ValueAccumulated AmortizationRemaining Service Life

Gross Book ValueAccumulated AmortizationRemaining Service Life



Next Steps…Ministry of Education

Sep - Oct 2007: Post March 05 - March 07 Data for Boards via EFIS

Reporting portal (data flow summary) Distribute suggested accounts to use for TCA Develop process to run BVC for missed assets or major

errors. Post supporting documentation on TPFR site:

TCA Valuation Methodology Support letter from OAGO BVC documentation Etc



Next Steps….District school boards

Oct 2007 - Aug 2009 Establish opening balances for other asset classes Prepare supporting documentation for external auditors to

validate opening land & building asset classes

Aug 2008 Boards report TCA data on land & buildings in their notes to

their financial statements

Aug 2009 Full TCA reporting on DSB Financial Statements!!!



Next Steps….External Auditors

Oct 2007 - Aug 2009: Audit the estimated opening values for land & buildings

Using provincial data from the BVC and Capital Activity Reports submitted between Mar 2005 and March 2007

Audit the estimated opening values for other asset classesUsing valuation methodologies as discussed with the DSB



Questions

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Transfer Payment and Financial Reporting Branch Ministry of Education Implementation of Tangible...

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