I. Inventory

Inventory is recorded at historical cost, using the weighted average valuation method, in accordance with SFFAS No. 3, Accounting for Inventory and Related Property, and consists of retail goods purchased for resale at the CVC’s gift shops. The recorded values are adjusted based on the results of periodic physical inventory counts. Inventory purchased for resale may be categorized as follows: (1) purchased goods held for current sale, (2) purchased goods held in reserve for future sale, and (3) slow-moving, excess or obsolete inventory. Examples of the retail goods included in inventory that are classified as “held for current sale” are books, t-shirts, jewelry and other souvenirs. AOC may also record an allowance which is based on slow- moving, excess or obsolete and damaged inventory, as a result of known restrictions on the sale or disposition of inventory (see Note 6).

J. General Property, Plant and Equipment, Net AOC records property (buildings and equipment) at cost. Buildings and equipment are depreciated over their esti- mated useful lives, which range from three to 40 years, using the straight-line method. Depreciation is based on the half-year and full-month conventions for buildings and equipment, respectively. All property (buildings and equip- ment) is in AOC’s possession and there is nothing held by others (see Note 7).

The following table presents AOC capitalization thresholds and related useful lives:

See Table, Full Report, Page 118

K. Stewardship PP&E

Stewardship land and heritage assets have physical prop- erties that resemble those of General PP&E, which are traditionally capitalized in the financial statements. Due to the nature of stewardship assets, however, determining a monetary value would be difficult, and matching costs with specific periods may not be possible or meaningful. Heritage assets are PP&E that are unique and are generally expected to be preserved indefinitely. Heritage assets have historical or natural significance; are of cultural, educational, or artistic importance; or have significant architectural characteristics. These assets are reported in terms of physical units rather than cost or other monetary values per SFFAS No. 29 Accounting for Heritage Assets and Stewardship Land. There are two types of heritage assets: collection, which are objects gathered and maintained for exhibition, such as museum and art collections; and non-collection, which are parks, memorials, monuments and buildings. AOC holds both collection and non-collection heritage stewardship assets (see Note 8).

L. Liabilities

Liabilities represent the amounts owed to others for goods or services received, and amounts owed for progress in contract performance. Some liabilities are funded while others are unfunded because no liability may be paid without an enacted appropriation. For example, future appropriations may be enacted to fund activities for accrued unfunded annual leave and workers’ compensation. The Balance Sheet presents the following types of liabilities:

• Accounts Payable,

• Debt Held by the Public,

• Unfunded Actual and Actuarial Workers’ Compensation,

• Other Liabilities

• Accrued Annual Leave

• Advances from Others

• Capital Lease Liability

• Contract Holdbacks, and

• Custodian and Accrued Liabilities

M. Personnel Compensation and Benefits

Federal Employee Benefits

The Federal Employees’ Compensation Act (FECA) provides income and medical cost protection to covered federal civilian employees injured on the job, employees who have incurred a work-related occupational disease, and beneficiaries of employees whose death is attributable to a job-related injury or occupational disease. The FECA program is administered by the U.S. Department of Labor (DOL), which initially pays valid claims and subsequently seeks reimbursement from the federal agencies employing the claimants. The DOL determines the actuarial liabil- ity for claims outstanding at the end of each fiscal year. This liability includes the estimated future costs of death benefits, workers’ compensation, and medical and mis- cellaneous costs for approved compensation cases (see Note 11).

AOC recognizes its share of the cost of providing future pension benefits to eligible employees over the period the related services are rendered. The amount funded by the Office of Personnel Management is considered imputed financing (see Note 16).

AOC recognizes a current-period expense for the future cost of post-retirement health benefits and life insurance for its employees while they are actively employed. This amount is also considered imputed financing (see Note 16).