For P3s that are classified, for accounting purposes, as a capital lease and are signed by the Province of Alberta, the budgeting impacts are as follows:
■ The acquisition value of the asset is equal to the net present value of the lease payments plus any Government of Alberta (GOA) capital contribution, which includes interest accumulated during the construction period. This value is recorded as a capital asset (or capital expense if the asset is owned by a school board, post-secondary institution or Alberta Health Services) upon acceptance of the asset by the GOA or as the asset is constructed, depending on the terms of the agreement.
■ The acquisition value of the capital asset/capital expense is statutory and, as such, is not included in the Ministry voted appropriations.
■ Both the liability and the asset acquisition itself are recorded in the ministry balance sheet.
■ The principal portion of payments is a voted, non-budgetary expenditure. Principal repayment reduces the liability corresponding with the asset acquisition.
■ The interest portion of payments is a voted, budgetary debt servicing expense under the Expense and Equipment/Inventory Purchases vote.