Effective: April 1, 2016

Applicable FAM Policies: 510 - Tangible Capital Assets

Applicability: GNWT Departments

Development and construction costs for certain road structures (i.e. highways, community access roads, winter roads) and surfacing (i.e. chip seal) shall be recorded using the pooled method.

INTERPRETATION

It can be difficult to track and cumbersome to manage (for reporting consistency and comparability) the various development and construction costs for certain types of road structures. Specifically, these sub-categories of tangible capital assets (TCA) are within the TCA category “Roads and Bridges” and are amortized over varying estimated useful lives as follows:

1. Highways - up to 40 years
2. Community Access Roads – up to 20 years
3. Winter Roads – up to 20 years
4. Surfacing (i.e., chip seal) – up to 7 years

Basis of Cost of Tangible Capital Assets

For administrative practicality, the GNWT will capitalize capital costs for these four sub-categories on a pooled basis. Under this pooled basis TCA adjustments for each sub-category are recorded as costs become known during the fiscal year. All costs incurred to March 31, regardless of the completion stage of a particular project, will be included in the TCA adjustment for that fiscal year. Consequently, no amounts will remain in work-in-progress (WIP) at March 31 for these four sub-categories. 

In-Service Date

For highways, community access roads and surfacing, the in-service date shall be September 30.  For winter road projects, the in-service date shall be March 31. 

Recording in the Accounting System (SAM)

Costs of projects within any of the four particular sub-categories can be placed into service in the Asset Management (AM) module of SAM throughout the year at the applicable in-service date specified in the preceding section, in accordance with established SAM procedures. At a minimum, all known costs at December 31 for highways, community access roads and surfacing are to be entered into SAM and “pushed” to AM by January 21 of each year. All known costs at January 31 for winter road projects are to be entered into SAM and pushed to AM by February 15 of each year. All remaining costs to March 31 are to be entered into SAM and pushed to AM in accordance with the Year End Instruction Manual deadlines.