White Papers
PSAB 3150 - Tangible Capital Assets
Beginning with fiscal year 2009, local governments must report on their tangible capital assets and move from a modified accrual format to
full accrual accounting with new financial statements. This is the essence of PSAB 3150 - Tangible Capital Assets (TCA). What this means is
that assets that meet the definition of tangible capital assets will be capitalized on acquisition and their cost allocated to future
accounting periods (based on their estimated useful life) through an annual amortization expense. Multi-year projects will be reported as
“work-in-progress” and will be capitalized upon completion.
To implement these changes, opening balances including accumulated depreciation for all material assets controlled by local governments
will be required to start this process on January 1st, 2009. While this accounting model is already followed by the private sector and other
levels of government, this change has been labeled the largest accounting change to impact municipal government in history.
Once the opening balances have been derived, new assets, disposals and write-downs will be required to maintain asset ledgers going forward.
For the most part, opening balances will have been calculated using spreadsheet programs such as Excel. However, to track tangible capital
asset information going forward a better database and reporting capabilities will be required. Asset information will be required to be
maintained by departments (asset owners), boards, agencies and by asset types/categories. In addition, although asset management and long-range
financial planning is not a requirement of PSAB, it is fast becoming a requirement of various legislation, grants and funding programs.
With TeamBudget Capital and TeamBudget Operating budgeting solutions, you have the ability to capture new assets purchased through both
your Capital and Operating Funds. Asset types, asset categories, estimated useful life (service life), depreciation methods, work-in-progress
and other tangible capital asset information can be easily associated with capital projects and operating activity codes. In addition, tangible
capital asset information can be customized to meet your reporting requirements. As we move towards the January 1, 2009 deadline, Questica will
be developing additional functionality to leverage the TeamBudget Capital and TeamBudget Operating modules to become your complete PS 3150
solution.
Marjorie Johnson, CGA is a Project Manager with Questica Inc and provides PSAB consulting services to various government associations. She
can be reached at (905) 634-0110, ext. 510 or mjohnson@questica.com.
A PDF version of this whitepaper is available here.
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