Archived – 2016–17 Consolidated Future-Oriented Statement of Operations

Document navigation for "Supplementary Information Tables"

Consolidated Future-Oriented Statement of Operations (unaudited)

For the year ending March 31

(in millions of dollars)
The accompanying notes form an integral part of this Future-Oriented Consolidated Statement of Operations.

1. Methodology and significant assumptions

The Consolidated Future-Oriented Statement of Operations has been prepared on the basis of government priorities and departmental plans as described in the Report on Plans and Priorities.

The 2015–16 forecasted results presented in the 2016–17 Consolidated Future-Oriented Statement of Operations differs from the planned 2015–16 results presented in the 2015–16 Consolidated Future-Oriented Financial Statements. They have been adjusted to reflect the financial effects of the parliamentary expenditure authorities provided for 2015–16 year (such as Supplementary Estimates A, B and C, reprofiling of funds, carry-forward and earmarked items).

The 2015–16 management estimates have been calculated based on forecasts of Public Works and Government Services Canada's (PWGSC) activities that are known or expected for the current year.

The main assumptions underlying the forecasts are as follows:

1. The department's activities will remain substantially the same as for the previous year.
2. Expenses and revenues, including the determination of amounts internal and external to the government, are based on historical experience and/or estimated business volume changes. The general historical pattern is expected to continue.
3. Allowances are mainly based on historical experience and trends. The general historical pattern is expected to continue.

These assumptions are adopted as at January 26, 2016 which corresponds with the date of approval of the Future-Oriented Statement of Operations.

2. Variations and changes to the forecast financial information

While every attempt has been made to forecast final results for the remainder of 2015–16 and for 2016–17, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing this Consolidated Future-Oriented Statement of Operations, PWGSC has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the Consolidated Future-Oriented Statement of Operations and the historical financial statements include:

• The timing and amounts of acquisitions and disposals of Tangible capital assets, which may affect gains/losses and amortization expense;
• Implementation of new collective agreements;
• Economic conditions may affect both the amount of revenue earned and the collectability of accounts receivables; and
• Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, PWGSC will not be updating the forecasts for any changes in financial resources made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

3. Summary of significant accounting policies

The Consolidated Future-Oriented Statement of Operations has been prepared using the Government's accounting policies, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

A. Consolidation

This Consolidated Future-Oriented Statement of Operations includes the accounts of four revolving funds listed below, one of them being inactive. Three revolving funds prepare a complete set of financial statements annually that are audited and published in the Public Accounts of Canada. The accounts of these revolving funds have been consolidated with those of PWGSC and intradepartmental balances and transactions have been eliminated.

The PWGSC revolving funds are as follows:

• Defence Production Revolving Fund (inactive)
• Optional Services Revolving Fund
• Real Property Services Revolving Fund
• Translation Bureau Revolving Fund

B. Expenses

Expenses are recorded on an accrual basis. Expenses for the Department operations are recorded when goods are received or services are rendered including services provided without charges for accommodation, employer contributions to health and dental insurance plans, legal services and worker's compensation which are recorded as expenses at their estimated cost. Vacation pay and compensatory leave as well as severance benefits are accrued and expenses are recorded as the benefits are earned by employees under their respective terms of employment.

PWGSC administers the Payments in Lieu of Taxes Program (PILT) on behalf of all federal departments under the statutory authority of the Payments in Lieu of Taxes Act, which is disclosed under Grants in the Main Estimates. The Government of Canada voluntarily pays a fair share of the costs of local government, from which it is exempt, to municipalities and other taxation authorities having jurisdiction to levy and collect real property taxes in locations where federal lands and buildings are situated. The PILT issued by PWGSC on behalf of other participating federal departments are recovered from them and are therefore presented in reduction of the department's gross expenses.

Expenses also include provisions to reflect changes in the value of assets, including provisions for bad debt on accounts receivable, investments and advances or liabilities, including contingent liabilities and environmental liabilities to the extent the future event is likely to occur and a reasonable estimate can be made.

Expenses also include amortization of tangible capital assets which are capitalized at their acquisition cost. Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

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.

C. Revenues

Revenues are recorded on an accrual basis:

• Revenues from regulatory fees are recognized in the accounts based on the services provided in the year.
• Other revenues are accounted for in the period in which the underlying transaction or event occurred that gave rise to the revenues.
• Revenues that are non-respendable are not available to discharge the Department's liabilities. While the Deputy Minister of PWGSC is expected to maintain accounting control, the department has no authority regarding the disposition of non- respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the department's gross revenues.

4. Parliamentary authorities

PWGSC is financed by the Government of Canada through parliamentary authorities. Financial reporting of authorities provided to PWGSC do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Items recognized in the Consolidated Future-Oriented Statement of Operations in one year may be funded through parliamentary authorities in prior, current, or future years. Accordingly, PWGSC has different net cost 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 authorities requested

(in millions of dollars)

B. Authorities requested

(in millions of dollars)

Authorities presented reflect current forecasts of statutory items, approved initiatives included and expected to be included in Estimates documents and Supply Bills and, when reasonable estimates can be made, estimates of amounts to be allocated from Treasury Board central votes.

Date modified:

2017-03-01