ARCHIVED - DPR 2010-2011 - Notes to the Financial Statements (Unaudited)

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1. Authorities and Objectives

Authorities

The Department of National Defence (DND) was established by the National Defence Act (NDA). Under section 3 of the NDA, the Minister of National Defence presides over the Department. Under section 4 of the NDA, the Minister has the management and direction of the Canadian Forces (CF) and of all matters relating to National Defence.

Objectives

The Defence mission is to defend Canada and Canadian interests and values, while contributing to international peace and security. On behalf of the people of Canada, Defence stands ready to perform three key roles:

  • Defend Canada - by delivering excellence at home;
  • Defend North America - by being a strong and reliable partner with the United States in the defence of the continent; and
  • Contribute to International Peace and Security - by projecting leadership abroad.

The Defence mission is delivered through seventeen program activities, which are as follows:

(a) Defence Science and Technology (S&T)

This program provides the Government of Canada with critical scientific knowledge and innovation to address defence and security challenges and needs. The S&T Program includes direction setting, program planning, program management, and capability management, execution and assessment. The program comprises multi-year projects with activities in research, technology development, analysis and experimentation applied to inform, enable and respond to Canada’s defence and security priorities over multiple time horizons extending up to a 20-year outlook. The scientific knowledge and innovation generated from these activities informs decisions on Defence capability acquisitions, readiness preparation and the conduct of operations in response to Government priorities. Activities under this program draw on internal capability and make extensive use of partnerships with Canadian industry and academia as well as international organizations.

(b) Recruiting of Personnel and Initial Training

This program promotes National Defence as a preferred workplace with the general public and to recruit new hires for a broad range of trades and other general, professional and scientific occupations. This involves deepening Defence's connections to the various educational and ethnic communities to attract the right number and mix of people who have the skills needed to contribute in meeting the Defence Mission. Engaging in effective leadership, strategic planning, and targeted outreach activities will ensure proactive measures are taken to address the challenges arising from current labour market pressures for specific skill sets within certain geographic locations. The program attracts, selects and enrols personnel and conducts initial training (basic recruit and occupational training) to military members to the Operational Functional Point. This ensures that sufficient personnel are recruited and trained with the needed skills in the appropriate occupation, now and into the future, to meet Defence requirements. This is accomplished through the provision of recruitment centres, recruitment campaigns, advertising and other outreach activities as well as the necessary training staff, facilities and associated supports.

(c) Equipment Acquisition and Disposal

This program acquires equipment required for Canadian Forces operations. This includes the acquisition of new and replacement capabilities or capital improvements to in-service equipment and disposes of them at the end of their service life. Equipment Acquisition occurs primarily through collaboration with Public Works and Government Services (PWGSC), Industry Canada (IC) and the vendors. Equipment Acquisition activities include defining requirements, engineering design, sourcing, validation of requirements, developing procurement strategy, contracting, contract negotiation and award, contract administration and management and project management of equipment acquisitions.

(d) Real Property and Informatics Infrastructure Acquisition and Disposal

An extensive portfolio of land, works, and buildings and informatics required to support the delivery of defence operations. The Real Property Acquisition and Informatics Infrastructure Acquisition Disposal program ensures that the right real property and informatics is acquired and disposed of, and is available where and when needed, while providing value for money, advancing objectives for the greening of government land and buildings, and adhering to best practices for asset life-cycle management. Program activities include working with stakeholders to define requirements; updating the real property and informatics development and management plans; managing projects for new and replacement construction; and identifying and eliminating excess facilities. Real property and informatics are acquired through construction and recapitalization, purchase or capital leases, and disposed of through deconstruction, sale or transfer. The activity includes the Capital Assistance Program (CAP)which is a capital contribution program under which National Defence makes financial contributions to support the transfer of infrastructure facilities to provinces, territories, municipalities and/or their agencies. CAP projects support real property goals and objectives by encouraging cost-effective solutions for the provision of infrastructure on bases and wings across Canada.

(e)Maritime Readiness

This program provides Canada with a combat-capable, multi-purpose Navy. The program generates and sustains relevant, responsive, combat capable maritime forces that are able to respond to a spectrum of tasks, as may be directed by the Government, within the required response time. This is accomplished by bringing maritime forces to a state of readiness for operations, by assembling, and organizing maritime personnel, supplies, and materiel. This includes the training and equipping of forces and the provision of their means of deployment, sustainment and recovery to defend Canadian interests domestically, continentally and internationally.

(f) Land Readiness

This program provides Canada with a combat-capable, multi-purpose Army. The program generates and sustains relevant, responsive, combat capable land forces that are effective across the spectrum of conflict, from peacekeeping and nation building to war fighting. This is accomplished by bringing land forces to a state of readiness for operations, assembling and organizing Land personnel, supplies, and materiel as well as the provision of individual and collective training to prepare land forces to defend Canadian interests domestically, continentally and internationally.

(g) Aerospace Readiness

This program provides Canada with a combat-capable, multi-purpose Air Force. The program generates and sustains relevant, responsive, combat capable aerospace forces that are able to respond to the spectrum of tasks, as may be directed by the Government, within the required response time. This is accomplished by bringing aerospace forces to a state of readiness for operations, by assembling, and organizing aerospace personnel, supplies, and materiel. This includes the training and equipping of aerospace forces and the provision of their means of deployment, sustainment and recovery to defend Canadian interests domestically, continentally and internationally.

(h) Joint and Common Readiness

This program ensures Defence is ready to operate in a joint capacity, as directed by Government, to respond to domestic, continental and international requirements within the required response time. The program generates and sustains forces for activities, operations and organizations in which elements of at least two services (e.g Navy, Army, Air Force) participate. This is accomplished through the provision of training of a joint and common nature, the equipping of forces and the provision of their means to deploy in a joint capacity.

(i) Situational Awareness

The Government of Canada and Defence require an accurate and timely security picture and comprehensive situational awareness and threat knowledge for Canada and abroad. This program provides credible, reliable and sustained intelligence services to Defence in support of decision making and military operations, as well as, support to other government departments in the defence and security of Canada. Work activities include geospatial intelligence, imagery intelligence, signals intelligence, and counter intelligence. The program also ensures the acquisition and use of information from the global information infrastructure to provide foreign intelligence to support Government of Canada intelligence priorities. This is accomplished through the collection, dissemination and analysis of electronic information. The program ensures the provision of advice, guidance and services to help protect electronic information and information infrastructures of importance to the Government of Canada as well as technical and operational assistance to federal law enforcement and security agencies in the performance of their lawful duties.

(j) Canadian Peace, Stability and Security

This program employs the Canadian Forces in the conduct of operations to ensure the safety and security of Canadians and the defence of Canada. These operations include protecting Canada’s sovereignty, responding to domestic disasters or humanitarian crisis, supporting domestic security requirements, and conducting search and rescue activities. This is accomplished through the mobilization and deployment of forces within Canada. Canada Command is responsible for the conduct of all Canadian forces domestic operations – routine and contingency - and is the national operational authority for the defence of Canada.

(k) Continental Peace, Stability and Security

This program employs the Canadian forces in the conduct of operations, both independently and in conjunction with allies, for the defence of North America and its approaches. Activities under this program include continental operations, as required in accordance with Government of Canada policy. This is accomplished through the mobilization and deployment of forces for the defence of North America and its approaches. Canada Command is responsible for the conduct of all continental operations – routine and contingency - and is the national operational authority for the defence of North America and its approaches.

(l) International Peace, Stability and Security

This program contributes to global peace and security by conducting global CF operations, across the spectrum from humanitarian assistance to combat, in concert with national and international partners, to achieve timely and decisive results in support of Canada’s national interests. This is accomplished through the mobilization and deployment of forces internationally. Canadian Expeditionary Force Command is the operational command responsible for all Canadian Forces (CF) international operations, with the exception of operations conducted solely by Special Operations Forces elements.

(m) Defence Team Personnel Support

The Defence Team Personnel Support program provides a broad spectrum of support services such as financial support for education and housing and facilities services, as well as, benefits to military personnel and their families. This program also provides learning support to Defence civilians. This program is necessary as the provision of fair and equitable support is a key element of the Social Contract between the nation and its military personnel that is essential to enhance personnel readiness and deployability, and establish the Canadian Forces as an employer of choice and learning institution.

(n) Canadian Identity

This program preserves and promotes Canadian identity by providing youth programs, ceremonial activities and the preservation of military history. The program is necessary to demonstrate the military heritage and proficiency of the Canadian Forces (CF) to Canadians and inform them of the military profession and practice in Canada. This is realized through initiatives such as ceremonial and band performances, CF museums, CF history and heritage books, web content and the Cadets.

(o) Environment Protection and Stewardship

This program promotes public health and safety and supports sustainable development on Defence lands and wherever Defence operates. It delivers multi-faceted real property/infrastructure environmental protection and stewardship compliant with applicable legislation and federal policy that extends through every level of departmental decision-making.

(p) Non-Security Support

Defence is strongly committed to contribution to Canadian society in non-operational roles. The program provides support to develop national competency in defence issues and to the whole of government approach by sharing information with other government departments and non-governmental organizations. This may include the provision of grants to researchers to generate knowledge related to defence issues or provide meteorological or mapping information to other government departments in the interest of information sharing on horizontal initiatives.

(q) Internal Services

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. These groups are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; Acquisition Services; and Travel and Other Administrative Services. Internal Services include only those activities and resources that apply across an organization and not to those provided specifically to a program.

2. Summary of Significant Accounting Policies

These financial statements have been prepared in accordance with the Treasury Board accounting policies stated below, which are based on Canadian generally accepted accounting principles for the public sector. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian generally accepted accounting principles.

Significant accounting policies are as follows:

(a) Parliamentary Authorities

The Department is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Department do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 3 provides a high-level reconciliation between the bases of reporting.

(b) Consolidation

These consolidated financial statements include the accounts of the sub-entities that are under the control of the Department. The accounts of these sub-entities have been consolidated with those of the Department and all inter- organizational balances and transactions have been eliminated. The Department is comprised of DND, the CF and several related organizations and agencies in the Defence Portfolio, which carry out the Defence mission and are part of the Defence Services Program.

Organizations and agencies that are part of these consolidated financial statements include the following:

  • Canadian Cadet Program and the Junior Canadian Rangers;
  • Communications Security Establishment;
  • Canadian Forces Housing Agency;
  • Defence Research and Development Canada;
  • Office of the Department of National Defence and Canadian Forces Ombudsman;
  • Office of the Judge Advocate General; and
  • National Search and Rescue Secretariat.

The Canadian Forces Grievance Board, the Military Police Complaints Commission and the Office of the Communications Security Establishment Commissioner are excluded from the consolidation because these organizations are not part of the Defence Services Program, although they fall under the responsibility of the Minister of National Defence.

Non-Public Property (NPP) as defined in section 2 of the NDA, and administered by the Canadian Forces Personnel and Family Support Services is also excluded from the reporting entity. NPP includes all money and property contributed to or by CF members for their collective benefit and welfare. NPP is not subject to the Financial Administration Act, and is administered outside the framework of public funds. NPP is not part of the Defence Services Program. For 2010-11, NPP had estimated annual revenues of $386 million ($405 million in 2009-10), estimated annual expenses of $349 million ($362 million in 2009-10) and as of March 31, 2011 had an estimated net equity (assets minus liabilities) of $597 million ($571 million in 2009-10).

(c) Net Cash Provided by Government

The Department operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash receipts are deposited to the CRF and all cash disbursements made by the Department are paid from the CRF. Net cash provided by the Government is the difference between all cash receipts and cash disbursements including transactions between departments of the Government.

(d) Amounts Due From/To the Consolidated Revenue Fund

Amounts due from/to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the Department is entitled to draw from the CRF without further authorities to discharge its liabilities.

(e) Revenues

Revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.

Funds received from external parties for specified purposes are recorded upon receipt as deferred revenues. These revenues are recognized in the period in which the related expenses are incurred and revenues that have been received but not yet earned are recorded as deferred revenues.

(f) Expenses

Expenses are recorded on an accrual basis:

Grants are recognized in the year in which the conditions for payment are met. In the case of grants which do not form part of an existing program, the expense is recognized when the Government announces a decision to make a non-recurring transfer, provided the enabling legislation or authorization for payment receives parliamentary approval prior to the completion of the financial statements;

Contributions are recognized in the year in which the recipient has met the eligibility criteria or fulfilled the terms of a contractual transfer agreement, provided that the transfer is authorized and a reasonable estimate can be made;

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment; and

Services provided without charge by other government departments for accommodation, employer contributions to the health and dental insurance plans, worker’s compensation coverage and legal services are recorded as operating expenses at their estimated cost.

(g) Employee Future Benefits –

     (i) Pension Benefits

Eligible civilian employees participate in the Public Service Pension Plan, a multi-employer plan administered by the Government. The Department’s contributions to the Plan are charged to expenses in the year incurred and represent the total departmental obligation to the Plan. Current legislation does not require the Department to make contributions for any actuarial deficiencies of the Plan.

The Government sponsors a variety of employee future benefits such as pension plans and disability benefits, which cover members of the Canadian Forces. National Defence administers the pension benefits for members of the Canadian Forces. The actuarial liability and related disclosures for these future benefits are presented in the financial statements of the Government of Canada and reported annually to Parliament as required by the Canadian Forces Superannuation Act. This differs from the accounting and disclosures of future benefits for military members presented in these financial statements whereby pension expense corresponds to the Department’s annual contributions toward the cost of current and prior service, which is based on actual contributions made by members of the Plans during the period. In addition to its regular contributions, current legislation also requires the Department to make contributions for actuarial deficiencies in the Canadian Forces Pension Plan and in the Reserve Force Pension Plan, which came into force on March 1, 2007. These contributions are expensed in the year they are credited to the Plans. This accounting treatment corresponds to the funding provided to departments through Parliamentary authorities.

     (ii) Severance Benefits

Employees and military members are entitled to severance benefits under labour contracts or conditions of employment. These benefits are accrued as employees and military members render the services necessary to earn them. The obligation relating to the benefits earned by civilian employees and Canadian Forces members is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole. Nevertheless civilian collective agreements are the reference for paying entitlement on severance pay. The process of severance pay for civilian members will then be processed instructively by their respective collective agreements.

(h) Accounts and Loans Receivables

Accounts and loans receivables are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(i) Inventories

Inventory consists of consumables (such as non-repairables, uniforms and clothing, medical and other equipment and machine tools) and ammunition (including bombs and missiles). Consumable inventories are valued using a moving weighted average price methodology. Some items classified as repairable ammunition (e.g. missiles and torpedoes) are valued using a standard price. Inventory managed by contractors and not held in the Canadian Forces Supply System or Defence Resource Management Information System (DRMIS) is valued based on contractor-supplied records. DND is currently conducting a multi-year conversion of legacy systems into DRMIS. During the conversion process both periodic and perpetual inventory methods are being utilized. Items identified for disposal are excluded from the value of inventory as no value is expected to be recovered.

(j) Tangible Capital Assets

All tangible capital assets, having an initial cost of $30,000 or more, including capital leases, betterments and leasehold improvements, are recorded at their acquisition cost. Capitalization threshold values lower than $30,000 may apply to certain assets such as vehicles and asset pooled items (API), formerly known as repairables.

Capital assets do not include intangible assets, works of art and historical treasures that have cultural, aesthetic or historical value, assets located on First Nations Reserves and in museum collections.

(k) Amortization of Tangible Capital Assets

Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the capital asset as follows:

 

Asset ClassAmortization Period
Buildings 10-40 years
Works 5-40 years
Machinery and Equipment 3-30 years
Informatics Hardware 3-30 years
Informatics Software 2-10 years
Arms and Weapons 3-30 years
Other Equipment 5-30 years
Ships and Boats 10-30 years
Aircraft 20-40 years
Non-military Motor Vehicles 2-30 years
Military Vehicles 3-25 years
Other Vehicles 4-30 years
Leasehold Improvements Lesser of useful life of the improvement or term of lease
Leased Tangible Capital Assets Economic life or term of lease

 

API are amortized in accordance with the sum of the accumulated amortization of the equipment platform that they support.

Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

(l) Contingent Liabilities - Claims and Litigations

Contingent liabilities are potential liabilities, which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements (refer to Note 15(a) of these financial statements).

(m) Remediation Liabilities

Remediation liabilities reflect the estimated costs related to the management and remediation of environmentally contaminated sites. A liability, based on a reasonable estimate, is accrued when a site becomes contaminated or the Department becomes aware that a site has become contaminated and is obligated, or likely to be obligated to incur costs related to implementing a site-specific management plan. If the likelihood of the Department's obligation to incur these costs is not determinable, or cannot be reasonably estimated, the costs are disclosed as a contingent liability in the notes to the financial statements (refer to Note 15 (b) of these financial statements).

(n)Future Asset Restoration Liabilities

Future asset restoration liabilities represent the estimated costs related to the risk management of unexploded explosive ordnance (UXO) affected legacy sites. A liability, based on a reasonable estimate, is accrued when the Department becomes aware that a site is affected by UXO and is obligated, or is likely to be obligated, to incur costs related to a site-specific management plan. If the likelihood of the Department’s obligation to incur these costs is not determinable, or if an amount cannot be reasonably estimated, the costs are disclosed as a contingent liability in the notes to the financial statements (refer to Note 15 (c) of these financial statements).

(o) Foreign Currency Transactions

Transactions involving foreign currencies are translated into Canadian dollar equivalents using rates of exchange in effect at the time of those transactions. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars using the rate of exchange in effect at year-end.

Gains resulting from foreign currency transactions are included as revenues in Interest and Gains on Foreign Exchange in Note 21 and losses from foreign currency transactions are included in Other Expenses in Note 21.

(p) Measurement Uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent gains and liabilities, remediation liabilities, the liability for employee future benefits, allowance for doubtful accounts and the useful life of tangible capital assets. Actual results could significantly differ from those estimates. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary Authorities

National Defence receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Department has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of Net Cost of Operations to Current Year Authorities Used

 

 (in thousands of dollars)2011 2010 
 Net Cost of Operations 19,180,766 19,638,011
Adjustments for items affecting Net Cost of Operations but not affecting Authorities:     
          Amortization of Tangible Capital Assets (2,374,895) (2,133,353)
          Services Provided Without Charge by Other Government Departments  (770,303) (757,607)
          Employee Future Benefits  (63,170) 64,490
          Refund of Previous Year's Expenses 74,271 48,688
          Vacation Pay and Compensatory Leave 15,243 3,402
          Loss on Disposals of Capital Assets (183,823) (176,992)
          Adjustments of Tangible Capital Assets (124,260) (389,430)
          Return on Investments  832 950
          Other Revenues  11,284 12,860
          Remediation Liabilities and Other Allowances  (299) 26,582
          Allowance for Bad Debts  2,449 (1,690)
          Sale of Real Property through Canada Lands Company  31,353 0
          Miscellaneous (912) (10)
  (3,382,230) (3,302,110)
Adjustments for items not affecting Net Cost of Operations but affecting Authorities:     
          Acquisitions of Tangible Capital Assets  3,938,303 3,424,396
          Tangible Capital Assets Acquisitions with no monetary impact  (174,974) 0
          Payments Against Capital Lease Obligations  83,189 90,081
          Inventory Purchases Net of Usage and Adjustments  691,292 (123,357)
          Net Variation Prepaid Expense (36,782) 139,656
          Revenues Collected from Prior Year Receivables (36) (11,007)
          Material Management Integration Adjustments  (1,270)
  4,499,722 3,519,769
Current Year Authorities Used  20,298,258 19,855,670

 

(b) Authorities Provided and Used

 

(in thousands of dollars)20112010
Operating Expenditures - Vote 1 15,689,461 15,204,236
Capital Expenditures - Vote 5 5,311,275 4,108,136
Grants & Contributions - Vote 10 272,491 232,815
Statutory Amounts 1,470,487 1,490,034
Less:    
Lapsed Authorities*    
     Operating Expenditures - Vote 1 (929,840) (411,883)
     Capital Expenditures - Vote 5 (1,503,988) (764,704)
     Grants & Contributions - Vote 10 (11,628) (2,964)
Current Year Authorities Used 20,298,258 19,855,670

 

 * 2010-11 Lapsed Authorities include a $443.5 million Operating Budget Carry Forward and approximately $1,051.5 million in frozen allotments, consisting mainly of funds that will be returned to the Department for use in future years.

4. Receivables

The following table presents details of accounts receivable:

(in thousands of dollars)

(in thousands of dollars)20112010
External Parties 42,678 50,524
Other Government Departments and Agencies 152,237 63,851
Gross Receivables 194,915 114,375
Less: Allowance for Doubtful Accounts on External Receivables (4,897) (7,631)
Net Receivables 190,018 106,744

5. Loans and Advances

(in thousands of dollars)20112010
Imprest Accounts, Standing Advances and Authorized Loans to CF Members 41,151 44,920
Accountable Advances (Temporary Advances) 35 82
Advances to NATO Personnel for Recoverable Damage Claims 0 53
  41,186 45,055

6. Prepaid Expenses 

The following is a breakdown of prepaid expenses

 

(in thousands of dollars)20112010
Foreign Military Purchases 566,517 439,881
Sea Sparrow Missiles 77,069 214,231
NATO Flying Training Canada (NFTC) 46,055 48,554
Joint Strike Fighter Development 30,091 42,128
Military Salaries 10,121 10,799
Building Rentals 10,025 11,950
Other Purchases 132,035 141,152
  871,913 908,695

 

7. Inventories

The following table presents the details of inventory, measured at cost using the moving weighted average method.

 

(in thousands of dollars)20112010*
Ammunition, Bombs and Missiles 3,336,575 2,940,210
Uniforms and Clothing 461,841 474,041
Contractor Held Inventory** 401,656 322,154
Metal 297,001 258,712
Communication, Electrical Parts/Accessories and Informatics Equipment 271,298 252,707
Engineering, Test and Technical Equipment and Machine Tools 235,714 224,655
Land Equipment Spares 197,420 164,379
Ship Spares 168,106 163,258
Fuel, Petroleum and Oil 140,640 36,338
Aircraft Spares 134,576 145,797
Medical Equipment 111,742 106,755
Sonobuoys, Parts and Accessories 110,139 102,549
Miscellaneous 178,292 162,153
  6,045,000 5,353,708

 

* 2010 comparative figures have been restated to reflect the addition of the Metal and Fuel, Petroleum and Oil categories previously included in Miscellaneous.

** Contractor Held Inventory is valued at historical cost.

The cost of consumed inventory recognized as an expense in the Statement of Operations is $196.1 million in 2010-11 ($167.0 million in 2009-10).

8. Tangible Capital Assets and Accumulated Amortization

 

(in thousands of dollars)Balance Beginning of YearCurrent Year Adjustments (1)Acquisitions (2)DisposalsBalance End of Year
Land, Buildings & Works          
     Land 81,867 5 2,435 (131) 84,176
     Buildings 6,957,377 225,707 7,663 (8,162) 7,182,585
     Works 2,059,646 43,699 10,757 (3,556) 2,110,546
  9,098,890 269,411 20,855 (11,849) 9,377,307
Machinery & Equipment          
     Machinery and Equipment 5,650,414 286,522 270,405 (2,631) 6,204,710
     Informatics Hardware 6,326,363 653,396 191,848 (290,320) 6,881,287
     Informatics Software 379,890 98,139 7,254 (337) 484,946
     Arms and Weapons 6,250,249 145,737 120,062 (50,650) 6,465,398
     Other Equipment 61,920 2,312 4,251 (804) 67,679
  18,668,836 1,186,106 593,820 (344,742) 20,104,020
Ships, Aircraft & Vehicles          
     Ships and Boats 11,424,753 12,248 35,748 0 11,472,749
     Aircraft 12,837,967 1,345,730 131,440 (1,149,777) 13,165,360
     Non-military Motor Vehicles 723,976 (10,221) 47,367 (32,376) 728,746
     Military Vehicles 1,614,161 156,836 22,867 (2,233) 1,791,631
     Other Vehicles 366,013 7,199 25,787 (2,668) 396,331
  26,966,870 1,511,792 263,209 (1,187,054) 27,554,817
Leasehold Improvements          
     Leasehold Improvements 30,976 629 0 0 31,605
  30,976 629 0 0 31,605
Leased Tangible Capital Assets          
     Buildings 138,858 0 0 0 138,858
     Informatics Hardware 7,253 0 0 0 7,253
     Other Equipment 48 0 0 0 48
     Aircraft 830,086 (4,206) 15,500 0 841,380
  976,245 (4,206) 15,500 0 987,539
Assets Under Construction          
     Buildings 553,742 (167,409) 674,442 0

1,060,775

     Engineering Works 121,258 (15,717) 95,950 0 201,491
     Informatics Software 694,197 (50,625) 53,513 0 697,085
     Equipment 5,800,981 (1,879,309) 2,221,014 0 6,142,686
  7,170,178 (2,113,060) 3,044,919 0 8,102,037
  62,911,995 850,672 3,938,303 (1,543,645) 66,157,325

 

(1) Current Year Adjustments represent adjustments to API, assets under construction (AUC) put into use, reclassifications and adjustments of tangible capital assets

(2)

Total Acquisitions 3,938,303
Less: Leased Tangible Capital Assets (15,500)
  3,922,803
Less: Acquisitions related to public-private partnership (P3): (159,474)
Acquisitions excluding capital leases and P3 3,763,329

 

Accumulated Amortization

 (in thousands of dollars) Balance Beginning of YearCurrent Year Adjustments  Current Year Amortization DisposalBalance End of Year  Net Book Value 2011Net Book Value 2010 
Land, Buildings & Works               
   Land            84,176 81,867
   Buildings  2,949,762 43,826 180,384 (4,669) 3,169,303 4,013,282 4,007,615
   Works 1,144,588 4,488 67,565  (3,127) 1,213,514  897,032 915,058
  4,094,350 48,314 247,949 (7,796) 4,382,817  4,994,490 5,004,540
Machinery & Equipment               
   Machinery and Equipment  4,174,360 191,230 188,406 (153) 4,553,843  1,650,867 1,476,054
   Informatics Hardware  4,189,847 512,236 443,946 (160,074) 4,985,955 1,895,332 2,136,516
   Informatics Software 217,434 16,652 48,270 (229) 282,127 202,819 162,456
   Arms and Weapons 3,402,539 96,903 248,386 (35,821) 3,712,007 2,753,391 2,847,710
   Other Equipment  40,141 (706) 5,300 (630) 44,105 23,574 21,779
  12,024,321  816,315 934,308 (196,907) 13,578,037 6,525,983 6,644,515
Ships, Aircraft & Vehicles               
   Ships and Boats  6,043,862 19,411 400,538 0 6,463,811 5,008,938 5,380,891
   Aircraft 8,120,614 101,390 558,253 (1,110,246) 7,670,011 5,495,349 4,717,353
   Non-military Motor Vehicles  463,830 (10,117) 45,374 (29,146) 469,941 258,805 260,146
   Military Vehicles  1,099,485 (13,138) 63,727 (1,585)  1,148,489 643,142 514,676
   Other Vehicles 213,687 12,757 23,930 (2,401) 247,973  148,358 152,326
  15,941,478 110,303 1,091,822 (1,143,378) 16,000,225 11,554,592 11,025,392
Leasehold Improvements               
   Leasehold Improvements 14,268 0 2,638 0 16,906 14,699 16,708
  14,268  0 2,638  0  16,906 14,699  16,708
Leased Tangible Capital Assets              
   Buildings 41,864 6,284 48,148 90,710 96,994
   Informatics Hardware  3,261 2,227 5,488  1,765 3,992
   Other Equipment   27  4  31 17 21 
   Aircraft   396,288  89,663  485,951  355,429 433,798
  441,440 0  98,178 0   539,618  447,921 534,805
Assets Under Construction               
   Buildings             1,060,775 553,742
   Engineering Works           201,491 121,258
   Informatics Software            697,085 694,197
   Equipment            6,142,686 5,800,981
            8,102,037 7,170,178
  32,515,857 974,932 2,374,895 (1,348,081) 34,517,603 31,639,722 30,396,138

The Department is presently reviewing its process for recording and valuation of tangible capital assets. This work will be conducted over a number of years. In 2010-11, DND identified and recorded $102.6 million ($164.4 million in 2009-10) in post-capitalization of tangible capital assets as current year transactions.

In 2010-11, the Department had capital asset holdings that were damaged but that have yet to be approved for write-down or write-off. The net book value of these holdings has been estimated as follows:

 

 20112010
Assets Likely for Disposal $48.9 million $34.4 million
Assets Pending Evaluation $ 9.3 million $18.9 million
Assets Under Repair $26.8 million $64.0 million

 

Further evaluation of these capital asset holdings will be conducted in fiscal year 2011-12 and, once the review is completed and the net book value of these holdings is confirmed, the applicable write-down or write-off accounting entries will be recorded.

9. Accounts Payable and Accrued Liabilities

The following table presents details of the Department's accounts payable and accrued liabilities:

 

(in thousands of dollars)20112010
Accounts payable to other government departments and agencies 79,950 113,578
Accounts payable to external parties 1,638,271 1,104,924
  1,718,221 1,218,502
Accrued Liabilities 1,208,521 807,160
  2,926,742 2,025,662

 

10. Deposits and Trust Accounts

The following table presents details of the Department's deposits and trust accounts

 

(in thousands of dollars)20112010
Contractor Security Deposits  
     Deposits, beginning of year 1,437 2,278
     Deposits Received 5,931 4,167
     Refunds (4,760) (5,008)
     Contractor Security Deposits, end of year 2,608 1,437
Trust Account, Estates - Armed Services*    
     Trust Account, beginning of year 549 212
     Funds Received 1,457 2,830
     Payments (1,662) (2,493)
     Trust Account, Estates - Armed Services, end of year 344 549
  2,952 1,986

 

* The Trust Account, Estates - Armed Services was established to record the service estates of deceased members of the Canadian Forces pursuant to section 42 of the National Defence Act. Net assets of estates are distributed to legal heirs under the administration of the Judge Advocate General, in his capacity as Director of Estates.

11. Deferred Revenue

Deferred revenue represents the balance at year-end of unearned revenues stemming from amounts received from external parties which are restricted to fund the expenditures related to amounts received for fees prior to services being performed. Revenue is recognized in the period that these expenditures are incurred or the service is performed. Details of the transactions related to this account are as follows:

 

(in thousands of dollars)20112010
Foreign Governments  
     Beginning of Year 28,764 26,215
     Funds Received (3,440) 4,392
     Revenue Recognized (10,716) (1,843)
     Foreign Governments, end of year 14,608 28,764
Other Specified Purposes    
     Beginning of Year 7,965 12,300
     Funds Received 6,931 (62,035)
     Revenue Recognized (6,563) 57,700
     Other Specified Purposes, end of year 8,333 7,965
  22,941 36,729

 

12. Canadian Forces Pension and Insurance Accounts

Established in 1901 under the Militia Pension Act, the present Canadian Forces Pension Plans (the “Plans”) are administered in accordance with the provisions of the Act. The Canadian Forces Pension Plan (CFPP) covers all members of the regular force component of the Canadian Forces. Reserve Force members who have sufficient qualifying service and pensionable earnings are members of either the CFPP or Reserve Force Pension Plan (RFPP), which came into force on March 1, 2007, depending on their employment status and earnings.

The Department maintains accounts to record the transactions pertaining to the Canadian Forces Pension Plans, which comprise the Canadian Forces Superannuation Account, the Canadian Forces Pension Fund Account, the Retirement Compensation Arrangement Account, and, the Reserve Force Pension Fund Account. These accounts record transactions such as contributions, benefit payments, interest credits, refundable taxes and actuarial debit and credit funding adjustments resulting from triennial reviews and transfers to the Public Sector Pension Investment Board (PSP Investments).

The value of the liabilities reported in these financial statements for the Canadian Forces Pension Plans reflect only the balances which are posted in the departmental financial system. These balances do not include the actuarial value of the liabilities determined by the Chief Actuary of the Office of the Superintendent of Financial Institutions nor the details of the investments that are held by PSP Investments. Additional information on the Canadian Forces Pension Plans, including audited financial statements, is published in the Annual Report of the Canadian Forces Pension Plans, which is available through the Department of National Defence Website. For further information on PSP Investments, please visit their website www.pspib.ca.

The Department also maintains the Regular Forces Death Benefit Account, which provides life insurance to contributing members and former members of the Canadian Forces. This account records contribution, premiums, interest, and benefit payments.

The following table provides details of the Canadian Forces Pension and Insurance Accounts:

 

(in thousands of dollars)20112010
Canadian Forces Superannuation Account  
     Beginning of Year 45,490,149 44,881,570
     Funds Received and Other Credits 2,894,824 2,982,833
     Payments and Other Charges (2,389,710) (2,374,254)
     Canadian Forces Superannuation Account, end of year 45,995,263 45,490,149
Canadian Forces Pension Fund Account    
     Beginning of Year 38,045 59,292
     Funds Received and Other Credits 1,089,264 1,045,588
     Payments and Other Charges (261,466) (200,386)
     Transfers to the Public Sector Pension Investment Board (828,099) (866,449)
     Canadian Forces Pension Fund Account, end of year 37,744 38,045
Reserve Force Pension Fund Account    
     Beginning of Year 4,316 6,078
     Funds Received and Other Credits 65,837 95,670
     Payments and Other Charges (11,081) (13,196)
     Transfers to the Public Sector Pension Investment Board (54,045) (84,236)
     Reserve Force Pension Fund Account, end of year 5,027 4,316
Retirement Compensation Arrangements Account*    
     Beginning of Year 255,794 216,751
     Funds Received and Other Credits 71,214 80,498
     Payments and Other Charges (40,236) (41,455)
     Retirement Compensation Arrangements Account, end of year 286,772 255,794
Regular Force Death Benefit Account    
     Beginning of Year 192,113 192,593
     Funds Received and Other Credits 31,088 31,981
     Payments and Other Charges (31,307) (32,461)
     Regular Force Death Benefit Account, end of year 191,894 192,113
  46,516,700 45,980,417

 * The Retirement Compensation Arrangements (RCA) account records transactions for pension benefits that are provided in excess of those permitted under the Income Tax Act. The RCA is registered with Canada Revenue Agency (CRA) and a transfer is made annually between the RCA Account and CRA to either remit a 50-percent refundable tax in respect of the net contributions and interest credits or to be credited a reimbursement based on the net benefit payments. As at March 31, 2011, the total refundable tax transferred amounts to $275 million ($238 million in 2010).

13. Lease Obligations for Tangible Capital Assets

The Department has entered into agreements to lease certain equipment under capital leases with a cost of $988 million and accumulated amortization of $540 million as at March 31, 2011 ($976 million and $441 million respectively as at March 31, 2010). The obligations for the upcoming years include the following:

 

(in thousands of dollars)Total Future Minimum Lease PaymentsImputed Interest(5.29% to 8.05%Balance of Obligtations 2011Balance of Obligations 2010
     Buildings 172,562 (60,614) 111,948 116,416
     Aircraft 613,428 (133,371) 480,057 539,870
     Informatics Hardware 2,033 (63) 1,970 4,738
  788,023 (194,048) 593,975 661,024

Future Minimum Lease Payments

 

(in thousands of dollars)2011-20122012-20132013-20142014-20152015-20162016-2017
and Thereafter
Buildings 12,146 12,561 12,504 12,441 12,383 110,528
Aircraft 80,439 70,105 70,105 70,105 70,105 252,568
Informatics Hardware 2,033 0 0 0 0 0
  94,618 82,666 82,609 82,546 82,488 363,096

 

 14. Employee Future Benefits

(a) Pension Benefits:

i) The Department's Public Service employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and they are indexed to inflation.

Both the employees and the Department contribute to the cost of the Plan. The 2010-11 expense amounts to $236.0 million ($247.5 million in 2009-10), which represents approximately 1.9 times (1.9 times in 2009-10) the contributions by employees.

The Department's responsibility with regard to the pension plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

ii) The members of the Canadian Forces (Regular Force) and eligible members of the Reserve Force participate in the Canadian Forces Pension Plan, which is sponsored by the Government of Canada and administered by the Department. Pension benefits accrue up to a maximum of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plan benefits and are indexed to inflation.

iii) The members of the Canadian Forces (Reserve Force), who are not eligible for participation in the Canadian Forces Pension Plan, may be eligible to participate in the Reserve Force Pension Plan, which is sponsored by the Government of Canada and administered by the Department. Pension benefits accrue at a rate of 1.5 percent of pensionable earnings during the member’s service, plus an additional 0.5 percent times the average of the best five consecutive years of earnings for those members who are not yet eligible for Canada/Québec Pension Plan benefits. The benefits are integrated with Canada/Québec Pension Plan benefits and are indexed to inflation.

Both the members and the Department contribute to the cost of the Plans for both current and prior service. The 2010-11 expense amounts to $868.0 million ($892.4 million in 2009-10), which represents approximately 2.5 times (2.6 times in 2009-10) the contributions by employees.

The Department is responsible for providing program management and the day-to-day administration of the Plans. The actuarial liability and actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plans' sponsor.

(b) Severance Benefits:

The Department provides severance benefits to its public service employees and Canadian Forces members based on eligibility, years of service and final salary. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

 

(in thousands of dollars)20112010
Public Service Employees  
     Accrued Benefit Obligation, beginning of year 392,553 394,743
     Expenses for the year 37,548 26,824
     Benefits Paid During the Year (31,278) (29,014)
     Accrued Benefit Obligation, end of year 398,823 392,553
Canadian Forces Members    
     Accrued Benefit Obligation, beginning of year 1,213,700 1,276,000
     Expenses for the Year 153,633 42,644
     Benefits Paid During the Year (96,733) (104,944)
     Accrued Benefit Obligation, end of year 1,270,600 1,213,700
  1,669,423 1,606,253

 

15. Contingent Liabilities

Contingent liabilities arise in the normal course of the operations of the Department and their ultimate disposition is unknown. The Department is involved in three categories of contingent liabilities: claims and litigations, remediation liabilities, and future asset restoration liabilities.

(a) Claims and Litigations Claims have been made against the Department in the normal course of operations. Legal proceedings for claims with a face value totalling approximately $2,050 million ($2,023 million in 2009-10) were still pending at March 31, 2011. Some of these potential liabilities may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded in the financial statements.

(b) Remediation Liabilities - Contaminated Sites Liabilities are accrued to record the estimated costs related to the management and remediation of environmentally contaminated sites, where the Department is obligated or likely to be obligated to incur such costs.

Liability estimates are based on information known at a given point in time. These estimates are subject to variability due to: professional judgment involved in developing estimates, the possibility that additional volumes of contaminated media may be discovered upon implementation of the remedial action plan, and/or new technologies becoming available during the course of implementing the remedial action plan.

The Department has confirmed approximately 224 sites where such action is possible and for which a liability of $325 million has been recorded.

The Department has estimated additional contingent liabilities relating to contaminated sites of $115 million for mitigation costs that are not accrued.

The DEW Line Clean Up project completed maintenance investigation of FOX 4 – Cape Hooper during fiscal year 2010-11 and has identified the need for additional remediation work which is reflected in a change to the liability estimate for this site.

There is uncertainty as to the future management of the contamination in Esquimalt Harbour and the proportion of potential clean up costs attributable to the Department.

In fiscal year 2010-11, two new projects were approved to address the risks associated with the trichloroethylene (TCE) contamination at Valcartier. These projects have produced cost estimates that are considered reasonable at this time and for which an accrual has been made; however, the potential for these estimates to change is likely given the long duration of these projects (15+ years). The cost estimates will continue to be reviewed at least annually and adjusted as necessary.

In addition, there is the potential for two additional projects at Valcartier: source zone and east side. No cost estimates are available at this time for these two projects as the extent of the Department's obligation is not known. The project addressing contamination at Suffield Experimental Proving Ground is currently examining remediation options by identifying and assessing other available technologies and/or variations and combinations of options. Once these options analyses are complete, the Department will be better able to determine and estimate its obligation.

A potential obligation exists for environmental mitigation at Camp Ipperwash. The uncertainty will be resolved once environmental investigations have been completed and clean-up options have been developed. These investigations are expected to continue through fiscal year 2011-12.

There is additional potential obligation at CFS Alert and London (Highbury Complex). These projects are currently in the assessment phase. Once the environmental investigations are complete, the Department will be better able to determine and estimate its obligations.

During fiscal year 2010-11, assessment activities were undertaken at 208 suspected or confirmed contaminated sites. There were 63 new contaminated sites identified. Of these new sites, 57 are under assessment. As a result of assessment activities, additional liabilities may be reported.

(c) Future Asset Restoration Liabilities Liabilities are accrued to record the estimated costs related to the risk management and clearance of unexploded explosive ordinance (UXO) affected legacy sites, where the Department is obligated or likely to be obligated to incur such costs. The liability estimates are based on information known at a given point in time and are subject to variability due to the use of professional judgment in developing the estimate, changes to the size of the site or type of UXO on the site, and/or new technologies becoming available during the implementation of the risk management strategy.

The Department has confirmed 42 sites where clearance or risk management activities will be necessary and for which a liability of $16 million has been recorded.

A potential obligation exists for UXO risk mitigation at Camp Ipperwash. The uncertainty will be resolved once UXO investigations have been completed and clearance options have been developed. These investigations are expected to continue through fiscal year 2011-12.

The range of the contingent liability for Lac St. Pierre has been reviewed and remains unchanged from last year. The estimated contingent liability (a rough order magnitude estimate ranging from $180 million to $524 million) relates to potential clearance costs to mitigate UXO risk at Lac St. Pierre.

In addition to the liabilities related to UXO affected legacy sites, there are potential obligations related to real property. These obligations may arise from property disposal transactions, termination of lease agreements, oil and gas activities on DND/CF property, and other transactions.

Property associated with three rifle ranges may be declared surplus in fiscal year 2011-12. At this time, the future land use for these properties is unknown and assessment activities have not commenced. The uncertainty of the Department’s future financial obligations will be resolved once UXO assessment has been completed.

There is additional potential obligation at St. Maurice de Terrebonne, Québec. UXO has been confirmed on the site and it is expected that clearance activities will be required. Additional assessment of the site is needed to determine the extent of the UXO risk. Once the assessment is completed, and final land use is determined, the Department will be better able to determine and estimate its liability.

The Niagara on the Lake range was closed in 2000 as it was no longer required by the Department for operations. The property is owned by Parks Canada and, according to the memorandum of agreement, the property must be free of contamination before the agreement can be terminated. Previous investigations confirmed that parts of the property are affected by UXO, but further assessment is necessary. Once the assessment is completed, and a final land use is determined, the Department will be better able to determine and estimate its liability.

A potential obligation exists for abandoned wells associated with oil and gas activities at CFB Suffield, however the extent of this obligation is not known at this time. The uncertainty will be resolved once the departmental research into provincial, federal and industry standards and obligations is completed. This research will continue through fiscal year 2011-12.

The Department will be transferring administration of approximately 50 hectares of land at Beecher’s Bay, British Columbia to Aboriginal Affairs and Northern Development Canada. The Department will retain liability for expected costs relating to UXO clearance and risk mitigation. A reasonable estimate is not available at this time.

16. Contingent Gain

The Department entered into a contract to obtain military flying training over a 20-year term as part of the NATO Flying Training in Canada (NFTC) program. Among other services, the prime contractor provides aircraft by leasing them for the life of the program from a non-profit company (Milit-Air Inc.), which was set up to finance the acquisition of aircraft. The asset purchase period was completed 21 December 2010 for the acquisition of aircraft and excess funds have been declared surplus. Milit-Air Inc. reported a total of $33.1 million in cash and short-term deposits as Current Assets in its financial statements as at March 31, 2011. It is estimated that $26.7 million of this total will be declared surplus in fiscal year 2011-12.

17. Contractual Obligations

The nature of the Department’s activities can result in some large multi-year contracts and obligations whereby the Department will be obligated to make future payments when the services/goods are received. Contractual obligations over $10 million that can be reasonably estimated are as follows:

 

(in thousands of dollars)2011-20122012-20132013-20142014-20152015-2016 and
Thereafter
Total
Fixed Assets 1,404,577 1,072,499 921,448 893,961 1,479,619 5,772,104
Purchases 1,722,688 1,438,567 1,156,081 1,054,778 8,098,449 13,470,563
  3,127,265 2,511,066 2,077,529 1,948,739 9,578,068 19,242,667

 

18. Related Party Transactions

The Department is related as a result of common ownership to all Government departments, agencies and Crown Corporations. The Department enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the Department received common services which were obtained without charge from other Government departments as disclosed below.

(a) Common Services Provided Without Charge by Other Government Departments

During the year, the Department received services without charge from certain common service organizations, related to accomodation, legal services, the employer's contribution to the health and dental insurance plans and workers' compensation coverage. These services provided without charge have been recorded in the Department's Statement of Operations as follows:

 

(in thousands of dollars)20112010

 

     Employer's Contributions to the Health and Dental Plans Paid by Treasury Board of Canada Secretariat

675,221 661,037
     Accommodation Provided by Public Works and Government Services Canada 80,826 77,371
     Worker's Compensation Coverage Provided by Human Resources and Skills Development Canada 9,585 11,070
     Legal Services Provided by Department of Justice Canada 4,671 8,129
  770,303 757,607

 

The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services of Canada and audit services provided by the Office of the Auditor General are not included in the Department's Statement of Operations.

(b) Other transactions with related parties

 

(in thousands of dollars)20112010

     Accounts Payable to Other Government Departments and Agencies

76,649 113,157
     Accounts Receivable from Other Government Departments and Agencies 152,237 63,851
     Expenses - Other Government departments and agencies 2,415,601 2,516,481
     Revenues - Other Government departments and agencies 49,922 17,952
  2,694,409 2,711,441

 

19. Adoption of new accounting policies

During the year, the Department adopted the revised Treasury Board accounting policy TBAS 1.2: Departmental and Agency Financial Statements which is effective for the Department for the 2010-11 fiscal year. The major change in the accounting policies of the Department required by the adoption of the revised TBAS 1.2 is the recording of amounts due from the Consolidated Revenue Fund as an asset on the Statement of Financial Position.

The adoption of the new Treasury Board accounting policies have been accounted for retroactively with the following impact on the comparatives for 2009-10:

 

(in thousands of dollars)2010 As previously statedEffect of changes2010 restated
Statement of Financial Position      
Assets 36,810,340 47,719,146 84,529,486
Equity of Canada (14,080,796) 47,719,146 33,638,350

 

20. Comparative Information

Comparative figures have been reclassified to conform to the current year's presentation.

21. Segmented information

Presentation by segment is based on the Department's program activity architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows:

The following table is available in PDF format for viewing or downloading purpose.

Notes-to-Future-oriented-Financial-Statements-2011-2012-table-21-eng.pdf (PDF Format)  29Kb

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