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Effective: April 1, 1998
Responsibility: Vice-President and Chief Financial Officer

APPENDIX A - Capital Assets

Classifications and Amortization Rates

* Not valid for input to the capital assets sub-ledger.

APPENDIX B

CAPITAL VS OPERATING

CAPITAL EXPENDITURE DEFINITION

The Corporation must adhere to CICA’s Generally Accepted Accounting Principles (GAAP).

Refer to the definition of capital asset in section 3 of this policy - Definitions And Accounting Treatment.

Betterments and Repairs:

The CICA Handbook differentiates between a ‘Betterment’ and a ‘Repair”. It defines a betterment as ‘the cost incurred to enhance the service potential of a capital asset.’ The cost incurred in the maintenance of the service potential of a capital asset is a repair not a betterment.

Maintenance:

Maintenance can be defined as "the act of keeping a property in condition to perform adequately and efficiently the service for which it is used, that is normal usable condition." Maintenance would generally be classified as an operating expense.

Repairs:

Repairs are usually charged to operations.

Extraordinary repairs, which do not add to the value of an asset nor appreciably prolong its life beyond that contemplated when it was purchased or constructed, are also considered to be operating expenses as opposed to capital. For example, roof replacement, while extraordinary in amount, merely keeps the building in normal operating condition, does not add to the service potential or prolong its useful life.

Replacements:

Replacements involve the removal of a major part or component of plant or equipment and the substitution of a new part or component of essentially the same type and performance capabilities. Such costs are generally operational in nature and should not be confused with the replacement of stand-alone units, such as mobiles, cameras, transmitters, etc., which fall under the Capital Vote.

Improvements:

Improvements can be either operational or capital. If the improvements do not add to the value and useful life of the asset, it is operational in nature. If on the other hand, the improvements, such as the replacement of old windows with new energy saving windows, adds to the value of the asset and prolongs its useful life, it is capital.

Additions:

Additions are extensions, enlargements or expansions of an existing asset and typically enhance the service potential of the asset, and as such should be treated as capital.

To summarize, assets should be classified as "capital assets" (and be funded from the capital vote):

• If the asset is a stand-alone item (i.e., it can function independently, such as a computer, a camera, a transmitter, etc.);
• If the asset will be productive or benefit the Corporation for more than one year;
• If the cost outlay or project results in a "Betterment" to an existing asset (i.e., replacing old windows in a building with new energy saving windows);
• If the cost represents a replacement of a stand-alone asset (i.e., a vehicle or a camera) rather than an improvement or essential maintenance (such as overhauling a heating system).

APPENDIX B

Check list for determining whether costs are accounted for as Capital or Operating

APPENDIX C

LOCATION CODES

SAP – ASSET RECORDS

GUIDELINES AND PROCEDURES

TRACKING AND MANAGEMENT OF ASSETS

Assets are tracked and managed in SAP using the following fields and codes:

• Cost Center (usually the center in which the asset is located)
• Location Code (the city, town, municipality, etc.), which is linked to a Plant Code
• Plant Code (the plant to which the asset is linked which has responsibility for tracking and managing the asset), which is linked to a Location Code
• Room Number (the actual room within a building in which the asset is located)

RESPONSIBILITY FOR CONTROL OVER LOCATION CODES

• The Corporate Manager, Master Data and Security, Head Office, will be responsible for the control and maintenance of the location code table in SAP on the advice and recommendations of the designated Network Finance and Administration Officers.
• Consultation with the Corporate Manager, Property Management is required to ensure that Finance and Administration and Property Management use the same code to identify the same property.
• The tables will be reviewed and updated on an ongoing basis.

LOCATION CODES

Location codes will be comprised of six digits, the first four for City/Town/Location and the other two for address

• There should be only 1 four-digit code for each City/Town/Location.
• There should be only 1 two-digit code for each site/address.
• The location “name” in SAP should be complete and clearly identify the location.
• All locations should have a name (usually city, town, municipality, etc.).
• When it is confirmed that CBC/Radio-Canada no longer occupies a location, the person responsible for maintaining the location codes will verify if there are assets still assigned to that location and if so, notify the network office to “move” the assets in SAP.
• In order to avoid assigning assets to a location, which the CBC/Radio-Canada no longer occupies, access to the location code may have to be blocked or deactivated.

Assets Transfer Notice Form (33.5 kb MS Excel)

APPENDIX D

LOW VALUE ASSETS (LVA) TO BE MANAGED IN SAP

The media and support Vice Presidents have approved the following list of assets to be tracked and managed in SAP. The guidelines pertaining to this list include the following:

• Such assets must be tracked and managed in Class 31 – Low Value Assets
• Individual managers can add to the list, however, they cannot delete assets from this list
• Individual managers are responsible for the deletion of such assets from SAP, once the assets have been traded-in, sold, donated, lost, stolen or scrapped and/or are of no further use to the Corporation
• Assets not included on the list may be tracked and managed either in SAP or outside SAP

The approved list includes the following types of assets:

• Wireless Transmitters
• Wireless Receivers
• High End Microphones
• Laptop Computers
• Desktop Computers
• Digital Still Cameras
• Consumer Video Cameras
• Portable TV Sets, VCRs, Professional CD Players and Video Projectors

APPENDIX E

FORMS

• Asset Transfer Notice (34.5 kb .xls)
• Asset Request for Write-off and Disposal (70.5 kb .xls)
• Senior Management Questionnaire (44 kb .doc)