Effective: April 1, 2016
Section: Public Property
Administrator: Office of the Comptroller General
Applicability: GNWT Departments and Public Agencies

POLICY

Inventories shall be appropriately managed and properly reported in the accounting records.

PURPOSE           

Proper management and reporting of inventories helps to ensure that:

1. Inventory amounts are reported in the financial statements at their net realizable amounts in accordance with the applicable financial reporting standards;
2. Lost or damaged inventory is disposed on a timely basis;
3. Inventory is purchased when needed to be available for sale or provide needed items for use in providing services, as applicable;
4. Costs of carrying inventory are efficiently managed to minimize interest costs and other costs (e.g. heat, insurance, handling costs);
5. Obsolete inventory is identified to be disposed on a timely basis to allow sufficient physical storage space for other inventory; 
6. Maximize the availability of inventory where program needs require it.

SCOPE

This policy applies to inventories for consumption and use, as well as inventories for resale.

RESPONSIBILITIES

Deputy Head of a Public Agency

Ensure that adequate records are kept in respect of public property administered by the GNWT Department or Public Agency.

Governing Body of a Public Agency

May write-off, in whole or in part, an asset of a Public Agency.

Comptroller General

May approve Interpretation Bulletins associated with this policy.

Deputy Minister

Ensure that adequate records are kept in respect of public property administered by the GNWT Department; may direct that an asset be written off that does not exceed a value specified in the Financial Administration Act (FAA) or the Delegation of Authority Regulations. 

Financial Management Board

May write-off, in whole or in part, a GNWT asset; may delegate authority to write-off an asset where the amount to be written off does not exceed $50,000 or a value specified in the Delegation of Authority Regulations; may issue a directive respecting the financial management or financial administration of a Public Agency.

AUTHORITIES and REFERENCES

• Financial Administration Act (FAA)
  • s. 10 – Board directives
  • s. 16 – Comptroller General
  • s. 60 – Write-off of assets, debts and obligations
  • s. 66 – Records of public property
  • s. 67 – Disposal of public propertys. 105 – Deletion from inventory
• CPA Canada Handbook – Accounting
• CPA Canada Public Sector Accounting Handbook
• Delegation of Authority Regulations
• Disposal of Public Property Regulations
• GNWT Disposal of Surplus Goods Guidelines
• International Accounting Standards (IAS) 2 – Inventories
• PS1201.049-.056 – Financial Statement Presentation: Financial Assets

INTERPRETATION BULLETINS