tag:blogger.com,1999:blog-30694877.post6792300288353899881..comments2023-10-28T11:29:07.881-03:00Comments on Politics from a New Brunswick perspective: Victor Boudreau's big daynbpoliticohttp://www.blogger.com/profile/09517401409653124082noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-30694877.post-64947043430610085042007-03-15T12:58:00.000-03:002007-03-15T12:58:00.000-03:00I have no doubt its not a 'whim' but that doesn't ...I have no doubt its not a 'whim' but that doesn't mean anything in the long term. To account for it, the CICA has these relevant terms:<BR/><BR/><BR/>fair value<BR/>net book value<BR/>residual value<BR/>service potential<BR/>useful life<BR/><BR/> Any and every one of those is a subjective term to a government. <BR/><BR/> However, let me see if I have this straight. The 'new' highway, which has been paid for, is being accounted for differently than previous highways (otherwise there wouldn't be such an increase)<BR/><BR/> Since construction is complete, it adds to the debt the province owes, but it doesn't result in a deficit because the cost of it is being 'amortized' over its useful life. Is this right?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-18014259496881677312007-03-14T19:00:00.000-03:002007-03-14T19:00:00.000-03:00I don't believe you can count it as an asset until...I don't believe you can count it as an asset until the work is complete. I am not an accountant, but this is budgeted under national guidelines set by the Public Sector Accounting Board. This isn't accounted just on the fly by the whim of some managers in the Department of Finance nor of the minister.<BR/><BR/>PSAB is an arm of the Canadian Chartered Accountants Association. You will find their website and details on how, when and why these things are booked at http://www.cica.ca//index.cfm/ci_id/225/la_id/1.htmnbpoliticohttps://www.blogger.com/profile/09517401409653124082noreply@blogger.comtag:blogger.com,1999:blog-30694877.post-401101510043068122007-03-14T17:17:00.000-03:002007-03-14T17:17:00.000-03:00Yes, but if it is now 'amortized' over its lifespa...Yes, but if it is now 'amortized' over its lifespan, wouldn't the capital cost be LESS? There was a lot of highway work done the year before as well, but it didn't result in DOUBLING the capital asset cost.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-61929063500211204162007-03-14T15:12:00.000-03:002007-03-14T15:12:00.000-03:00Anon - it means they built a lot of highway betwee...Anon - it means they built a lot of highway between Fredericton and Grand Falls... new portions of TCH opened from Long's Creek to Woodstock.nbpoliticohttps://www.blogger.com/profile/09517401409653124082noreply@blogger.comtag:blogger.com,1999:blog-30694877.post-91106513180455159882007-03-14T14:13:00.000-03:002007-03-14T14:13:00.000-03:00OK, from some more looking it seems that fella abo...OK, from some more looking it seems that fella above was onto something. In the budget, in case people don't have the time or inclination, there are three sections-<BR/><BR/>1. Total Capital Expenditures<BR/>2. Capital Expenditures to be Expensed<BR/>3. Investment in Tangible Capital Expenditures<BR/><BR/> For last year, most departments stayed pretty close, the environment dropped by 400G, health dropped 400G, the regional development corporation saw 2 million dropped in investment in tangible capital expenditures.<BR/><BR/> However, transportation saw an increase of 500 million in both total capital expenditures, and total investment in capital expenditures.<BR/><BR/> What exacty that MEANS I don't know. They 'acquired' the TCH from the feds? Anybody?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-13810214557587452312007-03-14T14:03:00.000-03:002007-03-14T14:03:00.000-03:00To finish that thought, what capital assets were a...To finish that thought, what capital assets were acquired, and from who?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-21434913385873050322007-03-14T13:59:00.000-03:002007-03-14T13:59:00.000-03:00Thats a good take above, about the TCH. Not sure ...Thats a good take above, about the TCH. Not sure about it though, but it seems reasonable. On the Statement of Change in Net Debt the big change is labelled as "Acquisition of Tangible Capital Assets". This more than DOUBLED from last year, from 350 million to almost 800 million. <BR/><BR/> From the explanatory notes there is this:<BR/><BR/>"As part of the process of implementing tangible capital asset accounting, Government was required to establish a value for all of the tangible capital assets owned by the Province as of March 31, 2004. A value has been established for these assets and they will be amortized over their remaining useful lives."<BR/><BR/>"As a result, the estimated amortization expense in<BR/>2007-2008 of $250.4 million includes amortization expense on the value of the tangible<BR/>capital assets existing on March 31, 2004, as well as investments made since that date.<BR/><BR/>As a result of a change in accounting guidelines during the 2006-2007 fiscal year, Government is required to recognize the gross cost of a Tangible Capital Asset (including any Federal<BR/>contribution) when establishing the amortization expense. The Federal contribution is recognized over the life of the asset as a Deferred Capital Contribution, which offsets the increased amortization expense."<BR/><BR/><BR/> For those with no experience in accounting, like me, the government site that announced it in 2003 made the change from accounting for capital assets (hospitals, schools) in the year they were built to amortizing them over their useful life. <BR/><BR/> My question is, when are they PAYING for them. It seems to me that it is more 'accountable' to state how much money you actually have and owe. It seems that they pay to build a hospital, then say "well, now we ACCOUNT for it over the 30 years we have it". However, you still have $3 million less in the budget in the year you pay for it, UNLESS you've borrowed the money to pay for it in the first place and are just paying it back. <BR/><BR/> However, thats not how they typically do it, so there are some real questions about the 'value' that the government has assigned to these assets and how long they are amortized for.<BR/><BR/> It's true that more governments are doing this, mostly because accountants are sick of learning two different accounting procedures, one for private, and one for public institutions.<BR/><BR/> However, anybody remotely familiar with Enron, Nortel, etc., knows the kind of fancy footwork companies are capable of when amortizing assets. So just because 'everybody else is doing it', doesn't necessarily mean its more 'accountable'. Like any system, the devil is in the details.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-24912125627394674992007-03-14T11:23:00.000-03:002007-03-14T11:23:00.000-03:00I hate tax increases as much as much as the next g...I hate tax increases as much as much as the next guy, but remember: This is the government's first budget. This is the one people will hate. Very predictable. Any (majority) government's first budget is the one where they cut stuff. I suspect that subsequent budgets will be much more voter-friendly and that people will have short memories. It's a common cycle.Brian Cormierhttps://www.blogger.com/profile/16158686531829277501noreply@blogger.comtag:blogger.com,1999:blog-30694877.post-60101731443369267462007-03-13T23:30:00.000-03:002007-03-13T23:30:00.000-03:00This is non-accountant's take but debt is up beca...This is non-accountant's take but debt is up because they have to account for the TCH. It's costing about half a billion to twin the Valley. That is paid with debt hence the higher debt level. But because it is an asset we only see the yearly depreciation on the income statement, hence a small surplus.<BR/><BR/>Overall impact is if the actuals equal the budget, we're about $320 million in the hole albeit with a new highway.Eugenehttps://www.blogger.com/profile/10449818999808881910noreply@blogger.comtag:blogger.com,1999:blog-30694877.post-4786498423564085312007-03-13T23:16:00.000-03:002007-03-13T23:16:00.000-03:00People are actually amazed that the NB Liberals ar...People are actually amazed that the NB Liberals are not following through on their so called promises. Gimme a break. This is only a start. 3 more years of this crap. The voters of Moncton East should hang their heads in shame for voting Collins in as the newest MLA. Gawd.Muddy River Toryhttps://www.blogger.com/profile/07591192268618391824noreply@blogger.comtag:blogger.com,1999:blog-30694877.post-17448976676414419332007-03-13T23:01:00.000-03:002007-03-13T23:01:00.000-03:00Why exactly is debt going up? Is that because of ...Why exactly is debt going up? Is that because of interest rates or is it a numbers game?<BR/><BR/> To Spinks, with income splitting you have to keep in mind that some in the middle class will be saving some taxes-just not you.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-75248985270904377902007-03-13T20:11:00.000-03:002007-03-13T20:11:00.000-03:00It's going to take a while to digest the budget, s...It's going to take a while to digest the budget, separate fact from fiction and then cross reference everything with what was promised in the campaign. <BR/><BR/>But don't forget the Liberal's basic campaign assertion was that all election promises had been costed and were affordable without tax increases.<BR/><BR/>The budget papers show revenues this year are $235 million higher than expected and yet there's still not enough money to meet next year's commitments. That has to be looked at pretty closely, including the shaky assertions that Grant Thornton discovered hidden costs during its financial review. It didn't. <BR/><BR/>Finally, although I know it meets the technical definition, I don't think you can seriously call this a balanced budget since it will increase the provincial debt next year by $356 million.<BR/><BR/>Last fall the Auditor General expressed concern with the way Volpe over used the word 'balanced' when talking about financial statements that drove up the debt. <BR/><BR/>New Brunswick has not had a budgeted increase in the debt this high in more than a decade.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-86960607760481127442007-03-13T19:43:00.000-03:002007-03-13T19:43:00.000-03:00Yes. These Liberals were going to be different. A ...Yes. These Liberals were going to be different. A new government that would do the right things to finally get NB moving. They scoured the world for the best ideas. They promised: this time it will be different. Yes. Raising taxes. Different. And most certainly must be the reason behind the amazing growth of Singapore, Ireland, Portugal. Color me doubtful. <BR/><BR/>Let's see. Provincial Liberals to Federal government: Give us more money. How different is that?<BR/><BR/>Provincial Liberals to NB citizens.Higher taxes, more regulation,payoffs to our client groups. How Liberal is that? <BR/><BR/>It's unfortunate that with so much good happening in Saint John and Canada that NB'ers put such an obviously incompetent crew in charge. <BR/><BR/>New Brunswickers rightfully expected a positive change in governance. What they got was more of the same old, same old. Shame on us for being so,so gullible. I guess mobility remains an NB must.<BR/><BR/>ConeastAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-30694877.post-41550579673754096262007-03-13T18:26:00.000-03:002007-03-13T18:26:00.000-03:00Okay income splitting good. I concur.Raising taxes...Okay income splitting good. I concur.<BR/><BR/>Raising taxes...bad, bad, bad, bad. Wisely they did this in their first year but man, add that to HST rebate...GONE, property taxes through the roof...AGAIN...rumours of another massive power hike...well suffice it to say the middle class in this province gets hit yet again...and as per usual the politicians don't care. I suspect we'll all take it lying down again (what else can you do), but man, this is AWFUL! Okay doctor, I feel better now...until I get the bill!Spinkshttps://www.blogger.com/profile/10044519689330008751noreply@blogger.com