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Budget Bulletin Tangible Capital Assets

first_imgThe province of Nova Scotia implemented an accounting policy fortangible capital assets in 1999-2000. The policy was reviewed andchanges to the amortization rates and thresholds were approved in2003-04. Amortization is the process of allocating the cost of atangible capital asset over its estimated useful life to matchcosts with the revenues or public services that it helps provide. In order to reflect more realistic useful lives of assets,amortization rates were revised as follows:(Asset class–original rate–revised rate)Computer hardware–30 per cent–50 per centFerries–20 per cent–15 per centVehicles–30 per cent–35 per centCustomized Software–50 per cent–25 per centAsphalt–20 per cent–15 per centRepaving–30 per cent–15 per cent The following are the revised thresholds:(Asset class–original thresholds–revised thresholds)Building and school betterments–$250,000–$150,000Complete bridge replacements–$500,000–$250,000 The threshold for each category represents the minimum cost anindividual asset must have before it is to be treated as atangible capital asset and added to the proper asset class. The 2003-04 TCA expense estimate of $129.2 million compares to aforecast of $103.4 million, a reduction of $25.8 millionprimarily due to the amortization rate and threshold changes. The largest financial impact of the above changes will be in theroads, bridges and highways asset class. -30-last_img read more