FIS Accrual Accounting Policies

DATE:

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 . 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 will be mandatory. That is, departments must capitalize allowable costs incurred after for acquired and in-house developed software, regardless of the start date of the project. Software costs incurred prior to 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 .
Leasehold improvements:
Capitalization on a prospective basis starting will be mandatory. That is departments must capitalize allowable costs incurred after . Leasehold costs incurred prior to 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.


Richard J. Neville
Deputy Comptroller General

c.c. : Rod Monette - Treasury Board Secretariat
John Wiersema - Office of the Auditor General
Peter DeVries - Department of Finance

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