In the Treasury Board Policy on Management of Materiel, materiel is defined as "all movable assets, excluding money or records, acquired by Her Majesty in right of Canada." Movable assets are tangible and include a broad range of goods such as equipment (e.g., office, information technology, telecommunications, scientific), furniture and furnishings, and larger goods (e.g., vehicles and ships).
The purpose of this Guide is to assist managers in implementing the government's Policy on Management of Materiel and its directives related to materiel management.
Based on a life-cycle approach, this document provides guidelines and good practices that complement the mandatory direction provided in the Policy. In some cases, it also details procedures to be followed stemming from the application of other Treasury Board policies and directives. This format enables managers to adhere to a common set of procedures and to ensure that their decision-making and management practices are consistent with the full range of good practices and guidelines relevant to the management of materiel.
Note: "Department" refers to departments and agencies named in Schedule 2 of the Financial Administration Act.
Flowing from the Treasury Board Policy on Management of Materiel, this document sets out guidelines and good practices for the management of materiel. The content of this Guide, the Policy, and its associated directives should be read in conjunction with other policies and requirements that are outside the scope of this document. The reader is encouraged to review the Policy on Management of Materiel.
This chapter highlights and expands on some mandatory policy direction and provides guidance and additional information on the management of materiel.
Ministers are accountable for the management of materiel to support the delivery of programs according to their departmental mandates. Deputy heads are accountable to their respective ministers and to the Treasury Board for the sound stewardship of the materiel entrusted to them or used by their respective organizations.
This managerial structure is framed by the principles set out in the Policy on Management of Materiel. The Policy must be read in the context of related Treasury Board policies, especially those governing investment planning, contracting, and project management. In fulfilling these responsibilities, it is important that managers adhere to the Values and Ethics Code for the Public Service produced by the Canada Public Service Agency.
Note: This Guide was developed to provide departments with the best advice available on how to implement the requirements set out in the Treasury Board's Policy on Management of Materiel. While adherence to this Guide is voluntary, the Treasury Board of Canada Secretariat may request that departments explain any deviation from the advice provided.
Additional mandatory requirements are set out in the four Treasury Board directives associated with the Policy on Management of Materiel:
The management of materiel is very much a balancing act. It requires that departments fulfill program objectives while balancing financial and efficiency-related materiel considerations with broader public issues and considerations, such as environmental impact. The objective of the Policy on Management of Materiel is for materiel to be managed by departments in a sustainable and financially responsible manner that supports the cost-effective and efficient delivery of government programs.
Departments require a framework for managing materiel that does the following:
The overall extent to which departments' materiel assets meet the Policy's requirements is measured by an ongoing and systematic assessment of the physical condition, functionality, use, and financial performance of these assets against established targets based on appropriate benchmarks.
The policy requirements, which are aligned with life-cycle materiel management, are detailed throughout this Guide.
The Policy on Management of Materiel (section 6.1.1) requires deputy heads to ensure that a materiel management framework is in place and that it does the following:
Departments have a responsibility to establish and maintain a management framework that consists of the following:
The Policy on Management of Materiel (sections 6.1.1 and 6.1.2) requires deputy heads to ensure the following:
A primary component of materiel management systems in the government is a systematic performance measurement framework that provides management with the assurance that materiel management objectives in support of program delivery are being achieved. Departments should establish proper materiel management practices for monitoring asset performance to ensure that repairs, refurbishing, and replacements are carried out before the assets become unserviceable, uneconomical, or both. Establishing these practices is a key objective of life-cycle materiel management–to be aware of asset life, storage restrictions, and repair and maintenance schedules so that the asset may be properly managed and maintained.
Departments should have in place an enterprise-wide, integrated materiel management performance management system that would enable materiel managers, at all levels, to establish performance standards and indicators and to achieve an accurate understanding of how well assets are being managed overall. The reports from performance and measurement systems will help support informed decision making about the allocation of resources within and by departments.
The Policy on Management of Materiel (section 6.1.3) requires deputy heads to ensure the following:
Departments should employ materiel management strategies that add value and support their objectives and priorities through the delivery of the most effective, efficient, timely, and modern materiel management program–providing the right materiel, at the best value, at the right time, while also adhering to government policies and regulations to ensure proper stewardship.
The Policy on Management of Materiel (section 6.1.4) requires deputy heads to ensure the following:
Departments have a responsibility to safeguard public assets. This responsibility includes the implementation of measures for the protection of assets (materiel) and detection of losses. As well, departments must support the national interest and the Government of Canada's business objectives by safeguarding employees and assets and assuring the continued delivery of services. A department's security measures can only be as effective as its ability to monitor its compliance and react to incidents. That is, security policies must also include provisions for the regular inspection and monitoring of asset holdings and the procedures that must be followed when an incident occurs.
The Policy on Management of Materiel (section 6.1.5) requires deputy heads to ensure the following:
The Government of Canada is committed to ensuring that cultural heritage is safeguarded for the benefit of all Canadians and is accessible to them. Heritage property can have individual or collective meaning and heritage value and, in many instances, contribute to telling Canada's story. For further information refer to the Treasury Board Guide to the Management of Movable Heritage Assets.
The Policy on Management of Materiel (section 6.1.6) requires deputy heads to ensure the following:
Departments are responsible for the management of light duty vehicles. Light duty vehicles are purchased using departmental funds, and, although central agency direction can influence purchasing decisions, departments are fundamentally responsible for deciding how many vehicles they require and the composition of vehicles necessary to fulfill their operational duties. Departments and agencies are essentially responsible for all phases of the light duty vehicle life cycle; however, they are guided by the policy direction provided by the Treasury Board. Most departments have their own internal policy related to the ownership, use, maintenance, and disposal of light duty fleets in place, while other departments may simply refer to the applicable Treasury Board policies, directives, and regulations. For further information refer to the Treasury Board Guide to Fleet Management.
The Policy on Management of Materiel (section 6.1.7) requires deputy heads to ensure the following:
Departments have the responsibility to manage assets in a manner that minimizes the effect on the environment and promotes sustainable development. This responsibility includes applying the three R's (reduce, reuse, and recycle) at each phase of life-cycle materiel management. Specifically, departments should work to minimize resource use, limit the use of hazardous substances, dispose of waste (both hazardous and non-hazardous) in an appropriate manner, and procure greener products. Sustainable development means development that meets the needs of the present without compromising the ability of future generations to meet their own needs. In practice, this means that environmental, social, and financial considerations should all be considered in an organization's decision-making process.
Further information on departments' responsibilities for advancing the protection of the environment and supporting sustainable development is included in the Policy on Green Procurement, published on the website for the Office of Greening Government Operations at Public Works and Government Services Canada.
The Policy on Management of Materiel (section 6.1.8) requires deputy heads to ensure a materiel management information system is in place that does the following:
Departments have the responsibility to provide both quantitative and qualitative information on the effectiveness of their materiel assets in meeting program requirements. A critical component of any materiel management system is an effective information management capability. This capability is normally achieved through the use of an enterprise resource planning (ERP) system, which offers the following benefits:
Asset visibility is a standard concept in materiel management, universally valued but implemented in vastly differing ways depending on the strategic objectives of the organizations involved. In general terms, asset visibility means the storing and easy retrieval of standard and integrated data that concern materiel holdings, are visible in the same formats, and provide the same information to all management levels and materiel holding points throughout the supply chain. An ERP system can provide a standard set of data related to the life-cycle management of assets, no matter where it is held. This offers effective and efficient management of assets throughout their life cycle and ensures the integration of materiel management, real property, financial, and human resources data.
The Policy on Management of Materiel (section 6.1.9) requires deputy heads to ensure the following:
The transfer of one department's materiel to another department is strongly encouraged when the use of the materiel is in support of government programs and the use or exchange is cost-effective for the government as a whole. The original department remains responsible for the custody and control of its surplus assets, including its operating costs, until title is transferred to another owner.
The Policy on Management of Materiel (section 6.1.10) requires deputy heads to ensure the following:
The lending of departmental materiel to Crown corporations, other governments' agencies, or the private sector should only take place to support departmental programs or activities. The loan of equipment should not be treated as a method of disposal. Asset loans should be used to make more efficient use of departmental resources by reducing the need to buy additional equipment when available items can serve the purpose. All loans of materiel must be effected using a contract and must comply with the Public Property Loans Regulations.
The Policy on Management of Materiel (section 6.1.11) requires deputy heads to ensure the following:
With respect to managing controlled goods, departments must have procedures to meet strict policy requirements. The Controlled Goods Directive affects all aspects of life-cycle materiel management. Inventory control and disposal management of controlled goods, however, are key to managing them successfully. Departments must ensure that access to their controlled goods is restricted and that all disposals of such goods follow the special requirements of the Directive. When using the disposal services of Public Works and Government Services Canada (PWGSC) or those of PWGSC's contractors, departments must ensure that controlled goods are clearly identified as such when they are declared surplus. Departments must keep and maintain detailed inventory records and establish and implement a security plan for each place of business in Canada where controlled goods are kept. Departments must provide training programs for the secure handling of controlled goods. The Controlled Goods Directorate at PWGSC must be advised, without delay, of any security breaches in relation to controlled goods.
The Policy on Management of Materiel (section 6.1.12) requires deputy heads to ensure the following:
The identification and disposal of surplus materiel is a critical part of life-cycle materiel management. When it is beyond cost-effective repair or is surplus to the requirements of the Crown, materiel should be declared surplus and disposed of in a manner that obtains best value for the Crown. In this context, best value refers to the selection of a disposal method that obtains the best return for the Crown, taking into account the market price for disposals and the global costs of disposing, including handling, warehousing and maintenance, transportation, overhead, amortization, staff time, and timing of cash expenses and sales, as well as any other related costs. Timely and effective disposal not only yields significant direct and indirect benefits, but it also represents an additional way for departments to visibly support broader government environmental objectives. The sale of surplus departmental materiel can realize new revenue for the department, thereby helping to leverage scarce resources. (See also subsection 3.4 of this Guide, "Disposal of government assets").
Departmental policy provides materiel management employees with formal direction that imposes specific responsibilities and accountabilities within the department. Materiel management specialists must combine their functional expertise with their responsibility to contribute to the management team. This will help the management team satisfy the requirements of the Treasury Board Management Accountability Framework, a set of expectations for good public sector management in a number of different management areas.
Human resources are key to materiel management in supporting departments and agencies in the delivery of their programs. To ensure that employees have the skills, knowledge, and competencies to implement the various policies and manage the government's assets and acquired services, a Professional Development and Certification Program was developed for the federal government's procurement and materiel management functional specialists. This program is managed by the Procurement, Materiel Management and Real Property (PMMRP) Community Management Office (CMO) at the Treasury Board of Canada Secretariat.
For employees working in materiel management, a professional designation as certified federal specialist in materiel management (CFSMM) may be obtained through the Canadian General Standards Board (CGSB), the certification body for the federal government. A professional designation as certified federal specialist in procurement (CFSP) may also be acquired. The Certification Manual, Handbook and forms are available on the CGSB website.
For more information on the Federal Government Professional Development and Certification Program, please visit the PMMRP CMO website.
Life-cycle materiel management is the effective and efficient management of assets from the identification of requirements to the disposal of the assets. Materiel management strategies must always consider the full life-cycle costs and benefits of the alternatives for meeting program requirements. By using life-cycle costing techniques, departments can evaluate the total costs to the Crown of owning or leasing an asset before it is acquired. This evaluation is accomplished by considering such factors as the current value of the costs of future operation, maintenance, and disposal, in addition to initial and ongoing capital costs. Estimating life-cycle costs also creates standards by which costs can be monitored and controlled after acquisition. By adopting this approach to the management of materiel, departments can ensure that their materiel management and asset management decisions are financially prudent and represent the best value to the Crown.
The departmental planning phase, which includes business planning and budgeting, is the initial process that determines a department's priorities and strategic program objectives. The materiel life-cycle management process is based on these priorities and objectives.
The extended life of materiel assets has important implications for decision makers. For instance, an acquisition decision that is based on the lowest purchase price but that ignores potential operations and maintenance (O&M) costs may result in higher overall costs. Decision making in life-cycle materiel management is an interactive process that considers all four phases of an asset's life cycle. Effective management requires that an appropriate level of management interest and control be maintained through all phases in the materiel asset's life cycle.
The four phases of life-cycle materiel management are as follows:
Tip:
The life-cycle cost (LCC) of materiel assets can be expressed by the following simple formula: LCC = planning costs
+ acquisition costs + use and operating costs + disposal costs – residual value.
The overriding objectives of assessment and planning are as follows:
The Policy on Investment Planning–Assets and Acquired Services (section 6.1.2) states that deputy heads are responsible for ensuring that departmental investment planning does the following:
Departmental asset assessment is the evaluation of requirements for new and existing assets that are essential to program delivery.
Note: This process can lead to volume-discount purchases and may permit better in-house support of systems.
Departmental planning is the function of allocating and reallocating resources that are essential to program delivery; it is a key element in achieving value-for-money and sound stewardship.
Further information on costing can be obtained from the Treasury Board Guide to Costing (2008).
Note: Additional considerations for each phase of the life cycle can be found in the "Green Procurement Principles" section of the Environmental Awareness Tool Kit and in Section 2, "Planning and Identifying Requirements," of Public Works and Government Services Canada's Guideline for Integration of Environmental Performance Considerations in Federal Government Procurement.
For further information refer to the following:
The following is a partial list of issues that must be considered in a review of materiel management for the acquisition of government assets. Departmental acquisitions are influenced by the Treasury Board Policy on Investment Planning–Assets and Acquired Services (2007). Any acquisition must do the following:
The overriding objective is to acquire goods and services in a manner that enhances access, competition, and fairness and results in best value or, if appropriate, the optimal balance of overall benefits to the Crown and Canadians.
The Policy on Management of Materiel (section 6.1.3) requires the deputy minister of a department to ensure the following:
Procurement starts from an idea and continues through the definition of the requirements, acquisition, delivery, receipt, and payment. Acquisition is the process that begins with certification under section 32 of the Financial Administration Act and ends with the delivery of a good or service.
Note: When considering the acquisition of new assets or replacing existing ones, managers should consider all the phases of the life cycle of that asset. The objective is to determine the total cost of each option that is being evaluated to meet the need that has been identified and to minimize the life-cycle materiel management cost.
Note: A medical certificate is not required to justify the purchase of specialized furniture or equipment. The manager should be convinced, however, that the purchase will resolve the problem. Because of the unique nature of specialized furniture and equipment, departments must facilitate the transfer of the furniture with the employee as long as the employee remains with the federal government.
For further information refer to the following:
The following is a partial list of issues that must be considered in a review of materiel management for the acquisition of government assets.
Throughout the life cycle of an asset, the overriding objective is to ensure that the asset fully, effectively, and efficiently meets the program requirements of the department whose program it supports.
Maintenance of an asset ensures that, when economically feasible, assets are repaired, refinished, and reused rather than replaced.
The Policy on Management of Materiel (section 6.1.3) requires deputy heads of departments to ensure the following:
a) Receipt, inspection, and set-up of assets
Note: Goods that are visibly damaged should be returned at the cost of the supplier.
b) Recording of assets
1) Undertake regular physical verifications of departmental assets.
c) Assignment of assets
d) On-the-job use of materiel assets
e) Employee use of materiel off government premises
There may be occasions when employees need to take Crown-owned materiel from Crown premises for work-related reasons. If the materiel is lost or damaged while it is off Crown premises, the employee is not normally responsible for its replacement unless the loss or damage was caused by an intentional omission or the commission of any act amounting to a wrongful act or negligence.
Note: The materiel is always Crown property; when it is no longer being used for work-related duties, managers are responsible for its return.
a) Inventory control
Inventory control is concerned with minimizing the total cost of the storage of assets.
Note: Appropriate accounting and control techniques may vary among departments depending on such factors as the quantities, dollar values, and attractiveness of asset items and the need for accurate cost information.
b) Warehousing
One of the prime requirements in a warehouse is the control of stock. Too much stock results in unnecessary expenses and risks, while stock outages may result in operational problems.
a) Asset loans to other government departments
Ministers of the Crown (or managers with delegated authority), departments, and all corporations included under Schedule 2 of the Financial Administration Act have the authority to enter into a loan agreement.
Good practices:
b) Asset loans to non-governmental organizations
For further information refer to the following:
c) Loans from non-government organizations
To be completed in a later version of the Guide.
d) Loans to other levels of government (provincial, territorial, municipal)
To be completed in a later version of the Guide.
The management of hazardous goods may be necessary if a department includes research groups that use, for example, chemicals or radioactive substances.
For further information refer to the following:
For further information refer to the following:
More specifically, maintenance can be broken down as follows:
Unscheduled maintenance or repair is any restoration made to an asset that will return it to useful, functioning, or sound condition so that it may serve the purpose or purposes for which it was originally intended.
Planned or scheduled maintenance consists of planned work performed on assets to help them reach their originally anticipated lifespan.
Note: Scheduled maintenance procedures are usually tied to the requirements of the manufacturer's warranty.
The primary goal of preventive maintenance is to prevent the failure of equipment before it actually occurs. Preventive maintenance is designed to preserve and enhance equipment reliability by replacing worn components before they fail. The ideal preventive maintenance program would prevent all asset failures before they occur.
Betterments consist of any modifications, conversions, upgrades, or additions that enhance or otherwise increase the functionality, efficiency, or capacity of an original asset or one of its component parts.
For further information refer to the following:
The following is a partial list of issues that must be considered in a review of the operation and maintenance of government assets:
The Policy on Management of Materiel (section 6.1.12) states that the overriding disposal objective is "to ensure the disposal of surplus materiel assets is concluded as effectively as possible, as soon as possible after they become surplus to the requirements of program delivery, in a manner that obtains highest net value for the Crown, and in compliance with the Treasury Board Directive on Disposal of Surplus Materiel."
The Policy on Management of Materiel (section 6.1.3) requires deputy heads of departments to ensure the following:
Disposal is the process as follows:
Departments shall dispose of all personal computers and related equipment rejected by the CFS Program through other authorized disposal options.
Whenever practicable, departments must make surplus materiel assets available, whether gratuitously, at book value, or at fair market value, to other federal departments and agencies before disposing of them outside the federal domain (section 4.3, Directive on Disposal of Surplus Materiel).
Note: Arrangements for a transfer of an asset to another department are made directly between the departments involved and normally do not require a Treasury Board submission or the involvement of the CADD.
Note: Materiel may be donated when the cost of selling an item exceeds the probable proceeds or when the Crown can gain a significant non-monetary benefit. Ministerial authority is required when donating an item for which the proceeds of sale would exceed the disposal cost–the agreement of the minister (not a delegated official) in writing is required to make such a donation.
Note: Donations to individuals or to private sector organizations require the approval of the Treasury Board and Governor in Council (i.e. they require a Treasury Board submission or Order in Council explaining the reasons for such a donation).
Note: The recipient organization(s) should be responsible for all cost(s) associated with the donation, such as pickup and delivery and shipping and handling costs.
Donations are to be made on an as-is-and-where-is basis, and the recipient must sign an agreement that the Crown is forever held blameless of any accident, injury, or other untoward event once the item is received. Departments should seek legal guidance in creating this agreement.
Note: Trade-ins are not authorized for computer equipment or vehicles.
A writeoff is the process by which an asset is removed from the departmental inventory. For further details see Section 4.
A writedown is the process of reducing the book value of an asset because it is overvalued compared to the fair market value. For further details see Section 4.
To be completed in a later version of the Guide.
Control of hazardous waste and hazardous recyclable material within Canada is a shared responsibility. The federal government regulates international and interprovincial/territorial movements, while provincial and territorial governments regulate intraprovincial/territorial movements of hazardous waste and hazardous recyclable material. The provinces and territories are also responsible for establishing controls for licensing hazardous waste generators, carriers, and treatment facilities within their jurisdictions.
For further information refer to the following:
The following is a partial list of issues that must be considered in a review of disposal for materiel management.
The overriding objectives are as follows:
The Policy on Management of Materiel (section 6.1.8) requires deputy heads to ensure that a materiel management information system that does the following is in place:
Note: A change in technological developments can easily revise the life expectancy of an asset or make it obsolete more quickly than planned.
Departments use a variety of systems to account for assets (e.g. SAP, Oracle, and spreadsheets). These systems are also closely linked to other departmental financial systems that manage accounts payable, procurement, and financial reporting.
For further information refer to the Treasury Board Accounting Standard 3.1–Capital Assets.
For the purposes of capitalization and amortization, capital assets can be defined using the whole asset or component approach. The whole asset approach considers an asset an assembly of connected parts, with all those parts recorded as one asset. The component approach sees each of the parts as an asset to be capitalized individually.
Specific guidelines have been developed to assist in determining when software expenses should be capitalized or expensed.
Writeoff is the process by which an asset is removed from the departmental inventory. An asset may be written off only if it is lost, stolen, or damaged beyond economic repair. No asset may be written off without the proper authority, but once written off the asset is deleted from the departmental inventory and the accounting considerations are fully addressed.
Note: Writeoffs may only be authorized as a result of destruction, fire, theft, loss, or other similar reasons. It should be noted that a writeoffs authorizes the amendment of records to adjust for any one of the aforementioned events. The authority to write off an asset is normally shown in a department's delegation of financial signing authority.
A writedown is the process of reducing the book value of an asset because it is overvalued compared to the fair market value.
The Government Security Policy stresses that assets must be safeguarded according to baseline security requirements and continuous security risk management.
A gain or a loss on a capital asset occurs when the asset's net book value differs from the sale proceeds or the trade-in value.
1) Recognize gains or losses when capital assets are sold, traded in, or disposed of.
There is a difference between capital assets and inventories. Inventories of materiel and equipment are to be accounted for and controlled in accordance with the Policy on Accounting for Inventories and Treasury Board Accounting Standard 3.4–Inventories.
For further information please seek advice from your department's financial officer and refer to the following:
Ensurethat, when conducting transactions, departments determine the likely value of the asset by means of an appraisal or estimate.
Ensure that all policy requirements are met in all four physical phases: assessment and planning; acquisition; operation, use, and maintenance; and disposal.
The central objectives of the risk program are as follows:
Ensure that the principle of best value to the Crown always guides decision making as it relates to materiel transactions.
Ensure that there is a process in place to deal with disputes with respect to any asset transaction or use.
Ensure advancement in the protection of the environment and support of sustainable development by integrating environmental performance considerations into the procurement decision-making process.
The central objectives of performance management are as follows:
General transaction guidelines are applicable in all four phases of life-cycle materiel management: assessment and planning; acquisition; operation, use, and maintenance; and disposal.
Assets have value:Valuation is the process of estimating the fair market value of an asset. Valuations are required in many contexts, including investment analysis, capital budgeting, acquisition, financial reporting, and litigation.
For further information refer to the Treasury Board Policy on Allowances for Valuation of Assets and Liabilities.
For further information departments should refer to the Policy on Management of Materiel and its associated directives:
Note: If any policy exceptions are necessary, Treasury Board approval is required. The Treasury Board of Canada Secretariat or Public Works and Government Services Canada can flag the need for Treasury Board approval of a transaction strategy notwithstanding the financial authorities of the minister.
For further detailed information please refer to the May 2002 paper, "Legal Obligations of Public Purchasers," by Robert C. Worthington.
For further information refer to the Green Procurement website at Public Works and Government Services Canada.
Risk management is a powerful tool that, if utilized, can assist decision makers in every step of life-cycle materiel management. For this reason, risk identification should be undertaken in the planning stages, encompass the total expected lifetime of the asset, and ideally be integrated with an existing organization-wide management process. Such an approach provides for more accurate lifetime costing and increases a department's ability to address and mitigate risk and its consequences.
For more information please refer to the Treasury Board Integrated Risk Management Implementation Guide.
An effective performance management system supports decision making, accountability, and transparency. As such, performance expectations must be established throughout the planning process. Evidence that the department's programs and services benefit Canadians is key to demonstrating not only continuous improvement in performance but also that the public is receiving value for its tax dollars.
Traditionally, measures of performance for materiel management have included such metrics as transaction count, contract costs, and document throughput time. Other measures of performance, however, could include the following:
Please direct enquiries about this policy instrument to the organizational unit in your department responsible for this subject matter. For interpretation of this policy instrument, the responsible organizational unit should contact: TBS Public Enquiries.
an annual process where three-year forecasts are revised and agreed upon by departments and the Treasury Board of Canada Secretariat.
A reference level is the current dollar balance of funding available to an organization (typically a department or agency) for each fiscal year as approved by Treasury Board, statutory estimates related to statutes of Canada, or both. It is the aggregate of all approved funding levels for the organization and may include some or all of the following: program, operating, capital, and non-budgetary expenditures; grants and contributions; and revenue credited to the vote.
a tangible asset that is as follows:
For the government, capital assets have the following characteristics:
For government accounting purposes, capital assets generally include all assets having an initial cost of $10,000 or more and treated as capital assets under Public Sector Accounting Board recommendations and generally accepted accounting principles in Canada. Departments may choose a lower threshold value.
Note: Assets costing $10,000 or more are capitalized, i.e. they are amortized over the useful life of the asset. Items meeting the characteristics of a capital asset and costing less than $10,000 are still considered capital assets but are not usually amortized.
when a tangible capital asset no longer contributes to a department's ability to provide goods and services, it is written down to its residual value, if any. Conditions that may indicate that a writedown is appropriate include the following: