The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management’s estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.
4. Parliamentary Authorities
The Agency receives most of its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and Agency Net Financial Position and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Agency has different net results 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 current year authorities used:
| (In thousands of dollars) | 2012 | 2011 |
|---|---|---|
| Net cost of operations before government funding and transfers | $ 826,965 | $ 782,999 |
| Adjustments for items affecting net cost of operations but not affecting authorities: | ||
| Add (less): | ||
| Services provided without charge by other government departments | (82,764) | (65,821) |
| Amortization of tangible capital assets | (37,640) | (31,550) |
| Revenues pursuant to Section 30 of the CFIA act | 56,570 | - |
| Accounts receivable and liabilities transferred to Shared Services Canada | (2,063) | - |
| Bad debt | (113) | (193) |
| Net changes in future funding requirements | (37,304) | (13,576) |
| Low value assets funded by other government departments | (47) | (103) |
| Loss on disposal of tangible capital assets | (113) | (543) |
| Post-capitalization of tangible capital assets | 47 | 818 |
| Net book value of transfer in/out | - | (87) |
| (103,427) | (111,055) | |
| Adjustments for items not affecting net cost of operations but affecting authorities: | ||
| Add (less): | ||
| Acquisition of tangible capital assets | 14,277 | 50,065 |
| Proceeds from disposal of tangible capital assets | (119) | (218) |
| 14,158 | 49,847 | |
| Current year authorities used | $737,696 | $721,791 |