For P3s that are classified, for accounting purposes, as a capital lease, the budget impact is as follows:
• The acquisition value of the asset is equal to the net present value of the lease payments plus any GOA cash investment (if any), which includes interest accumulated during the construction period. This value is included in the GOA Capital Plan 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 is a statutory capital investment and, as such, is not included in the Ministry voted appropriations. Both the liability corresponding with the asset acquisition and asset acquisition 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.
• Amortization of the capital asset is a voted, budgetary expense under the Expense and Equipment/Inventory Purchases vote.