The Agency does not pay for these programs as they fall under the Government of Canada`s financial responsibilities, but the Agency records its share of the annual benefits paid under these programs as a service provided without charge by other government departments. No amount is recorded in the Agency’s financial statements with regard to either the actuarial liability of these programs at year end or the annual increase of such liabilities.

1. Accounts receivable and advances
   
   Accounts receivable and advances are stated at amounts expected to be ultimately realized; a provision is made for receivables where recovery is considered uncertain.
2. Contingent liabilities
   
   Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.
3. Inventory
   
   Inventory consists of laboratory materials, supplies and livestock held for future program delivery and not intended for re-sale. It is valued at cost. If it no longer has service potential, it is valued at the lower of cost or net realizable value.
4. Tangible capital assets
   
   All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. Amortization of tangible capital assets is recorded on a straight-line basis over the estimated useful life of the asset as follows:
   
   

   Asset Class	Amortization Period
   Buildings	20-30 years
   Machinery and equipment	5-20 years
   Computer equipment and software	3-10 years
   Vehicles	7-10 years
   Leasehold improvements	Lesser of the remaining term of the lease or useful life of the improvement
   Assets under construction	Once in service, in accordance with asset class

5. Measurement uncertainty

   The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable.