ESTIMATES
ACCOUNTING POLICIES AND
PRESENTATION CHANGES
Estimates Accounting Policies
- Commencing with the 1992/93 fiscal year, the Estimates have been prepared on the
Consolidated Revenue Fund (CRF) basis. The CRF consists of the General Fund (voted
appropriations and all Special Accounts), and the Natural Resource Community Fund Special
Fund. In most fiscal years prior to 1992/93 the Estimates were prepared on the
General Fund basis only.
- The accounting policies followed in the Estimates are, in
all material respects, those that are used by the government in preparing the Consolidated
Revenue Fund Financial Statement.
- The accounting policies on which the 1999/00 Estimates have
been prepared are based on those detailed on pages B10 to B14 in the 1997/98 audited
Public Accounts of the CRF and revised for changes to those policies, as approved by
Treasury Board, since that fiscal year.
These changes are (i) the extension of the scope of the capitalization policy to include
parkland in 1998/99 and specialized equipment and highways in 1999/00 and (ii) the
treatment of fiscal agency loans for school and post-secondary institutions capital
acquisitions (1998/99), which has been extended to health and transit related capital
acquisitions (1999/00). This change in the treatment of loans to school districts,
post-secondary institutions, regional health districts, British Columbia Transit and Rapid
Transit Project 2000 Ltd. comprises (i) forgiving those fiscal agency loans and assuming
the related guaranteed debt within the CRF, and (ii) replacing the loans on the balance
sheet of the CRF with the unamortized cost of the related underlying capital assets, and
including as an annual operating expense of the CRF, amortization based on the useful life
of those assets. These changes were adopted following discussions with, and the approval
of, the Auditor General.
Significant Presentation Changes in the 1999/00 Estimates
- Capitalization To date, the government's accounting policy to capitalize,
and amortize over-time, the cost of ministry capital assets (such as computer systems),
has been shown in the Estimates at an aggregate level only. Commencing with the
1999/00 Estimates, the capitalization policy is presented for each ministry,
special office and other appropriation. Capital assets will no longer be included as a
ministry operating expense. The amortization expense related to the capital assets held by
each ministry will be included as a component of ministry operating costs, and shown, by
ministry, in the Supplement to the Estimates. The cost of ministry capital assets
is shown, by asset category. Further detail is provided in the Supplement to the
Estimates.
- Debt The Borrowing Requirements and Debt Summary on
page 2 of the 1999/00 Estimates document, has been changed to provide more
information on changes in CRF debt. These presentation changes focus on borrowings
associated with capital expenditures for education, health and transit related assets
(referred to as prepaid capital advances), capital acquisitions of the CRF and net new
loans and investments of the CRF. Details of those expenditures can be found in Schedules
C, D and E respectively.
- Pension Liability Commencing with the 1999/00 Estimates,
a schedule has been included in the Estimates (Schedule F) that provides
information on the unfunded pension liability and the annual impact of changes in that
liability on the CRF surplus (deficit).
- Transit Agreement As a result of the agreement
between the province and the Greater Vancouver Regional District to transfer certain
transportation responsibilities to the Greater Vancouver Transportation Authority,
including maintenance responsibilities for certain roads, bridges and ferries, the
province has reduced its contributions to British Columbia Transit, has accepted
responsibility for all debts of the Greater Vancouver Regional Hospital District,
including that portion previously the responsibility of taxpayers within the Greater
Vancouver Regional District, and has transferred additional fuel and sales tax revenue to
the Greater Vancouver Transportation Authority. The effect of these changes in the 1999/00
Estimates is to reduce contributions to British Columbia Transit by approximately
$140 million and to reduce operating costs in the Ministry of Transportation and Highways
by approximately $5 million, to increase debt interest costs in the Ministry of Health by
approximately $50 million, and to reduce fuel and sales tax revenue by approximately $85
million and $10 million respectively. There is, therefore, no net effect on the 1999/00
deficit. There has been no adjustment of the 1998/99 Restated Estimates amount in
the 1999/00 Estimates since this agreement reflects a governance change between the
Province and a third party.
- Other (i) Ministers' offices are no longer shown as
separate votes. The expenses of those offices are now shown as a separate sub-vote in each
ministry's operations vote and (ii) the expenses of the Officers of the Legislature, and
certain items within Other Appropriations have been aggregated, for presentation purposes
only, on the Summary of Estimated Revenue and Expense on page 3 of the 1999/00 Estimates
document. There is no change to the manner in which the expenses for the Officers of the
Legislature and Other Appropriations are voted.
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