1401 Overview

This chapter establishes the Department of Veterans Affairs’ (VA) financial policies regarding accounting for heritage assets and stewardship land to include recognition, measurement, and presentation and disclosure in VA’s consolidated financial statements.

Key points covered in this chapter:

• VA will recognize, record, report, and disclose heritage assets and stewardship land in accordance with:
  • Office of Management and Budget (OMB) Circular A-136;
  • Treasury Financial Manual (TFM), Volume 1, Part 2, Chapter 4700; and
  • Statements of Federal Financial Accounting Standards (SFFAS) 6, SFFAS 29, SFFAS 59, and Technical Release (TR) 9.

1402 Revisions

Section	Revision	Office	Reason for Change	Effective Date
Various	Completed full review	OFP	Updated guidance	March 2026
1403	Add definitions for Classification Categories for Land, and Land Held for Disposal or Exchange	FMBT	Add SFFAS 59 detail	March 2026
140502	Noted removal of land from balance sheets effective in Fiscal Year 2026	OFP	SFFAS 59	March 2026
140503	Add five bullets on note disclosures	FMBT	Add SFFAS 29 paragraph 40a-e detail	March 2026
Appendix B	Updated Example CAI and Disposal Plans Update Memo	OFP	Per CAI website link added to A&R	March 2026

For a complete list of previous policy revisions, see Appendix A: Previous Policy Revisions.

1403 Definitions

Assets – Tangible or intangible items owned by the Federal Government, which would have probable future economic benefits that can be obtained or controlled by a Federal Government entity.

Book Value – The net amount at which an asset or group of assets is carried on the books of record (also referred to as carrying value or amount). It equals the gross amount of any asset minus any allowance or valuation adjustment amount.

Budget Object Class Code (BOC) – The lowest level of object class. BOC codes are required on all spending transactions to classify obligations and expenditures according to the nature of the services or items purchased.

Capital Asset Inventory (CAI) System – The database of record for VA’s real property portfolio, including VA’s owned and leased assets, managed by the Office of Asset Enterprise Management (OAEM). The CAI database also houses the Facility Condition Assessment (FCA) data, agreement information, and historical asset information for the portfolio.

Capitalize – To record an expenditure or contribution, which will benefit a future period as an asset, rather than to treat the expenditure as an expense of the period in which it occurs.

Classification Categories for Heritage Assets:

• Art and Artifact Collections – Objects gathered and maintained for exhibition, for example, museum collections, art collections, and library collections. Includes artwork (refer to VA Directive 7531, Acquisition of Artwork, Decorative Furnishings and Decorative Items), archives, historic medical equipment, artifacts, documents, medals and awards, furniture, archaeological materials, and photographs. Historical documents in any medium including paper, film, and electronic media;
• Buildings /Structures – Includes historic hospitals, quarters, lodges, and chapels; buildings/structures with incidental use in general Government operations (< 50% utilization); generally listed in the National Register of Historic Places (NRHP) system. Expectation for indefinite preservation due to unique characteristics or historic significance differentiates heritage asset properties from other property;
• Monuments – A statue, building, or other structure erected to commemorate a famous or notable person or event; may also be known as: memorial, statue, pillar, column, obelisk, cross, cenotaph, tomb, mausoleum, or shrine;
• Non-Building – Any heritage asset that does not fall into one of the other categories should be classified as “Non-Building” when it has historical, natural, or architectural significance or cultural, educational, or artistic importance, including historic flag poles, rostrums, gates, and historic walls;
• Archaeological Sites – Generally listed in the NRHP system;
• Multi-Use Buildings/Structures – Predominately used for Government operations (>= 50% utilization); see MUHA definition; and
• Cemeteries –Cemetery heritage assets include the stones, plaques and monuments identifying the names, service and service units of Veterans and their dependents. See VA Directive 7545, Cultural Resource Management, for related information.

Classification Categories for Land

• Commercial – Land or land rights used to generate an inflow of resources whether from the land or activities on the land, whether or not the land use or activities produce a profit;
• Conservation and Preservation – Land or land rights predominantly used for protection and proper use of natural resources or associated with protection of buildings, other objects, and landscapes from use; and
• Operational – Land or land rights used predominately for general or administrative purposes.

Cost – An amount or value expended for goods or services produced or received.

Deferred Maintenance – Maintenance not performed when it should have been or was scheduled to be and that, therefore, has been put off or delayed to a future period.

Devise – To transmit or gift real property by will.

Direct Cost – Costs directly associated with providing goods or services.

Disclosure – Refers to reporting information in notes regarded as an integral part of the basic financial statements.

Donation – A contribution to the Government (i.e., gifting of a resource to VA by a non-Federal entity).

Expense – Outflows or other use of assets and/or incurrence of liabilities (or a combination of both), in which the benefits do not extend beyond the present accounting period.

General Property, Plant, and Equipment (PP&E) – Tangible assets which have an estimated useful life of two or more years; are not intended for sale in the ordinary course of operations and are intended to be used or available for use by the entity. PP&E includes land and land rights owned by the Federal Government acquired for or in connection with items of PP&E.

Heritage Assets – Items that would normally be classified as PP&E except that they are unique for one or more of the following reasons: historical or natural significance; cultural, educational, or artistic importance; or significant architectural characteristics. Heritage assets consist of collection type heritage assets such as objects gathered and maintained for exhibition, and non-collection-type heritage assets such as parks, memorials, monuments, and buildings. Heritage assets are generally expected to be preserved indefinitely. This term is specific to Federal accounting.

Historic Property – Any historic district, site, building, structure, or object included in, or eligible for inclusion in, the National Register of Historic Places maintained by the Secretary of the Interior. This term includes artifacts, records, and remains that are related to and are or were located within such properties. The term includes properties of traditional religious and cultural importance to an Indian tribe or Native Hawaiian organization that meet the National Register criteria.

Indirect Cost – Costs not directly associated with providing goods or services. These costs are allocated through the indirect cost allocation process. For example, some costs such as building maintenance or administrative expenses are more difficult to assign to a specific product and therefore are considered indirect costs.

Land Held for Disposal or Exchange – Land for which VA has satisfied the statutory disposal authority requirements. Disposal includes conveyances of Federal land to non-Federal entities not limited to sale, transfer, exchange, lease, public-private partnership, and donation, or any combination thereof.

Multi-Use Heritage Assets (MUHA) – Heritage Assets that serve two purposes—a heritage function and general Government operations. In cases where a heritage asset serves two purposes, the heritage asset should be considered MUHA if the predominant use of the asset is in general Government operations (e.g., the main Treasury building used as an office building). Heritage assets having an incidental use in Government operations are not MUHA and are simply referred to as heritage assets.

Nonexchange Revenue – Revenue that is not earned but received in donation or due to legislation or regulation such as taxes, duties, fines, and penalties. Donations may be financial resources such as cash or securities, or non-financial resources such as land or buildings.

Overhead Cost – Costs that are generally associated with utilities, building maintenance, and supplies essential to the overall accomplishment of a project. Overhead costs will be expensed or capitalized depending on their materiality to overall costs of individual projects. When overhead costs are determined to be material to a project and are distributed to the costs of a project, the costs will be allocated based on a distribution methodology that is both documented and auditable.

Recognize – The recording of financial transactions in the financial records of an entity.

Stewardship Land – Land and land rights owned by the Federal Government intended to be held indefinitely but not acquired for or in connection with items of general PP&E. Examples of stewardship land include land used as national cemeteries, forests and parks, land used for wildlife and grazing, and land preserving historic landmarks.

Stewardship PP&E – Consists of assets whose physical properties resemble those of general PP&E traditionally capitalized in financial statements. Because of unique characteristics of stewardship PP&E, valuation would be difficult and matching costs with specific periods would not be meaningful. To demonstrate accountability for these assets, entities will report on their existence. Stewardship PP&E includes heritage assets and stewardship land.

1404 Roles and Responsibilities

Office of Management, Office of Asset Enterprise Management (OAEM) is responsible formanaging VA’s portfolio of capital assets, the Capital Asset Inventory (CAI) database, performance monitoring of the portfolio, real property management, disposal and reuse planning, real property data management, and on-going analysis of the portfolio.

Office of Management, Office of Financial Reporting (OFR) is responsible for updating heritage artifact information for the Agency Financial Report (AFR).

Office of Acquisitions, Logistics, and Construction (OALC), Office of Construction and Facilities Management (CFM), provides guidance on historic property preservation, maintains information about VA’s programs to comply with Federal preservation requirements, and is responsible for development and management of heritage artifact classification, tracking, and reporting for VA historic items under their History Office’s control.

Administration and Staff Offices are responsible for the continuous update of the Capital Asset Inventory (CAI) heritage-related fields as needed and as assets under their control are acquired or disposed.

Local Finance Offices are responsible for maintaining necessary documentation for heritage assets and stewardship land for audit and control purposes.

1405 Policies

140501 General Policies

1. VA will use the Capital Asset Inventory (CAI) web application maintained by the Office of Asset Enterprise Management (OAEM) to serve as VA’s data source for heritage asset classification.
2. Annually, OAEM will send out a notification to the Administrations and Staff Offices to review, update, and confirm CAI information including heritage assets. See Appendix B: Example CAI and Disposal Plans Update Memo for an example of the annual data call memorandum.
3. Administration and Staff Offices will continuously update the heritage-related fields in CAI as assets and artifacts are acquired and disposed.
4. When updating CAI information, Administrations and Staff Offices will consult with Construction and Facilities Management (CFM) regarding historic real property data elements.
5. Local Finance Offices will maintain appropriate documentation for audit and control purposes (e.g., documentation supporting the classification and quantification in physical units; proof of ownership; and how they relate to the agency mission).

140502 Recognition, Measurement, and Accounting

1. In accordance with Statements of Federal Financial Accounting Standards (SFFAS) 6, 29, and 59, VA will account for PP&E in categories that include general PP&E, heritage assets (both regular heritage assets and Multi-Use Heritage Assets (MUHA)) and stewardship land.
2. In accordance with SFFAS 59, VA will recognize estimated acres of stewardship land under the predominant single use type among three general categories including:
   • Commercial use land;
   • Conservation and preservation land; and
   • Operational land.
3. In accordance with SFFAS 29, paragraph 18, VA will consider heritage assets to be MUHA when the assets serve two purposes and the predominant use is in general Government operations.
4. VA will use the proper Budget Object Class (BOC) Codes to classify all obligations of funds for heritage asset transactions (not associated to the general PP&E costs of MUHA), stewardship land, and permanent land rights. See Volume XIII, Chapter 2 – Budget Object Class Codes, for current codes.
5. VA will recognize and record costs for heritage assets, MUHA, and stewardship land as follows:
   1. When heritage assets are used solely or predominantly for a heritage function, all costs of acquisition, improvement, reconstruction, or renovation are recognized as a general operating expense in the period incurred to bring the item to its current condition. Direct, indirect, and overhead costs will be recognized in the period incurred. Refer to SFFAS 6, paragraph 26, for examples of costs to be considered.
      1. No amounts for heritage assets acquired through donation or devise (willed gift) should be recognized in the cost.
      2. Transfers of heritage assets from one Federal entity to another do not affect the net cost of operations or net position of either entity since these assets were expensed upon acquisition.
      3. In accordance with SFFAS 7, paragraph 346, if capitalized assets are transferred to an entity for retention as heritage assets, the transferring entity should recognize a transfer-out of capitalized assets (a negative other financing source).
   2. When heritage assets are considered MUHA, VA will comply with SFFAS 6, paragraphs 214-215. The portion of the cost attributed to the general Government operations will be capitalized as general PP&E if the capitalization threshold is met. The cost of acquisition, improvement, reconstruction, or renovation of MUHA should be considered when determining the amount to capitalize. The portion of the costs not capitalized as they are attributed to the heritage asset function will be treated as a heritage asset and expensed as described in the prior paragraph. Asset capitalization criteria is presented in Volume V, Chapter 7 – General Property, Plant, and Equipment.
      1. In accordance with SFFAS 7, MUHA acquired through donation or devise should be recognized as general PP&E at the assets’ fair value at the time received, and the amount should also be recognized as “nonexchange revenue.”
      2. Transfers of MUHA from one Federal entity to another are transfers of capitalized assets. The receiving entity should recognize a transfer-in as an additional financing source and the transferring entity should recognize a transfer-out. The value recorded should be the transferring entity’s book value of the MUHA. If the receiving entity is not provided the book value, the MUHA should be recorded at its estimated fair value. Refer to SFFAS 7, paragraph 74.
   3. Stewardship land and permanent land rights acquisition cost should be recognized as a general operating expense on the Statement of Net Cost in the period in which the cost is incurred. The cost should include all costs to prepare stewardship land for its intended use (e.g., razing a building) in accordance with SFFAS 29, paragraph 37 and SFFAS 59, paragraph 9.
      1. No amounts for stewardship land acquired through donation or devise should be recognized in the cost of stewardship land in accordance with SFFAS 29, paragraph 38.
      2. In accordance with SFFAS 59, paragraph 8c, transfers of stewardship land from one Federal entity to another does not affect the net cost of operations or net position of either entity since these assets were expensed upon acquisition. The transferring and recipient entities should properly adjust for estimated acres of land information. In some cases, land may be acquired along with existing buildings or other structures in accordance with SFFAS 29, paragraph 37. The following accounting treatment should apply:
         • If the structures associated with the acquired land would be deemed heritage assets and are significant in and of themselves, the entity should use its judgment as to whether an acquisition cost should be recognized as the cost of stewardship land, heritage asset, or both;
         • If the value of the structures is insignificant, and their acquisition is merely a byproduct of the acquisition of stewardship land, the cost in its entirety should be recognized as an acquisition of stewardship land; or
         • Significant structures that have an operating use (e.g., a constructed hotel or employee-housing block) should be treated/recognized as general PP&E by identifying the cost attributable to general PP&E and segregating it from the cost of the stewardship land acquired.

140503 Presentation and Disclosure in the Financial Statements

1. VA will report and disclose heritage assets and stewardship land in the financial statements and related notes in accordance with OMB Circular A-136, and Treasury Financial Manual (TFM) Volume 1, Part 2, Chapter 4700.
2. VA will comply with SFFAS 6, 29, 59, TR 9 and OMB Circular A-136 for stewardship PP&E reporting.
3. In accordance with SFFAS 59 and OMB Circular A-136, effective in Fiscal Year 2026, land values (except temporary land rights) are removed from balance sheets. This removal applies to stewardship land and permanent land rights as well as other land under PP&E.
4. In conformance with Generally Accepted Accounting Principles (GAAP), VA makes financial reporting assertions about heritage assets and stewardship land generally in five broad categories: existence, completeness, rights and obligations, valuation, and presentation and disclosure. Refer to TR 9, paragraph 22.
5. In accordance with OMB Circular A-136, Agency Financial Report (AFR) disclosures for stewardship land and permanent land rights will include at a minimum:
   • A concise statement defining VA’s Federal land and explaining how stewardship land relates to VA’s mission;
   • A brief description of VA’s stewardship land policies addressing goals and principles guiding land acquisition, maintenance, and disposal;
   • Information and acreage detail of land use by predominant categories among commercial, conservation and preservation, and operational land;
   • If applicable, an estimate of acreage held for disposal or exchange and their predominant use; and
   • Stewardship land rights information addressing the different types of rights acquired, whether permanent or temporary, and the amount paid to maintain those rights.
6. VA may report some investments in heritage assets as both heritage assets and stewardship land where the type of information reported for the physical unit is different for each category of stewardship asset.

1406 Authorities and References

• Federal Accounting Standards Advisory Board (FASAB) Handbook by Chapter
  • Statement of Federal Financial Accounting Standards (SFFAS) 6, Accounting for Property, Plant, and Equipment;
  • SFFAS 7, Accounting for Revenue and Other Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting;
  • SFFAS 29, Heritage Assets and Stewardship Land;
  • SFFAS 59, Accounting and Reporting of Government Land;
  • Technical Release 9: Implementation Guide for SFFAS 29.
• OMB Circular A-136, Financial Reporting Requirements
• Treasury Financial Manual, Volume 1, Part 2, Chapter 4700, Federal Entity Reporting Requirements for the Financial Report of the United States Government
• 36 C.F.R. Part 800 – Protection of Historic Properties
• VA Capital Asset Inventory (CAI) web application (VA intranet access only)
• VA Directive 7531, Acquisition of Artwork, Decorative Furnishings and Decorative Items (VA intranet access only)
• VA Directive 7545, Cultural Resource Management (VA intranet access only)
• VA Office of Construction & Facilities Management, Historic Preservation
• VA Financial Policy
  • Volume V, Chapter 7 – General Property, Plant, and Equipment
  • Volume XIII, Chapter 2 – Budget Object Class Codes
• Example VA CAI and Disposal Plans Update Memo displayed in Appendix B with attachments

1407 Rescissions

Volume V, Chapter 14 – Heritage Assets and Stewardship Land, August 2022.

Appendix A: Previous Policy Revisions

Section	Revision	Office	Reason for Change	Effective Date
Various	Titles of reference documents are listed only once in text and again in section 1406; grammar edited	OFP (047G)	Remove unnecessary duplication and comply with style guide changes	August 2022
1402 Revisions	Moved prior update items to App. A	OFP (047G)	Prior detail is less helpful to readers	August 2022
1403  Definitions	Definitions are added for disclosure and classification categories for heritage assets.	OFP (047G)	Full review; moving detail from policy to definitions	August 2022
1404  Roles and Responsibilities	Add CFM responsibility for History Office heritage asset reporting	OFP (047G)	New sub-office and assignment under CFM	August 2022
1405  Policies	Removed parentheses and “for more information” from references and several SFFAS references.	OFP (047G)	Simplify presentation	August 2022
140503E Presentation and Disclosure	Added reference to balance sheet note disclosure items from SFFAS 29 and 59	OFP (047G)	Clarity	August 2022
1406  Authorities and References	Removed references to SFFAC 6 and SFFAS 8,14,32, & 57; added SFFAS 59.	OFP (047G)	Text update and coverage changes	August 2022
Appendix B	Update CAI data call memorandum	OAEM (044)	Full update	August 2022
Various	Hyperlinks are moved to Authorities and References section only; master library link is substituted for individual FASAB document links	OFP (047G)	Master links identify most recent document updates; policy formatting change	November 2021
140503D Presentation and Disclosure in the Financial Statement	Remove Required Supplementary Stewardship Information (RSSI) instruction.	047G	FASAB treatment changed from RSSI to basic information with SFFAS 57.	November 2021
1405  Policies	Updated various hyperlinks and formatting	OFP (047G)	Updated guidance	March 2020
1406  Authorities and References	Added reference to TR 9 and CFM Historic Preservation Removed reference to SFFAS 16	OFP (047G)	Updated guidance SFFAS 16 rescinded by SFFAS 29 par. 14 (July 2005)	March 2020
Various	Updated financial policy to align with iFAMS configuration	OFP (047G)	FMBT and iFAMS updates	March 2020
Various	Reformatted to new policy format and completed 5-year review	OFP (047G)	Reorganized chapter layout and changed policy chapter title from “Heritage Assets” to “Heritage Assets and Stewardship Land”	May 2018
1403 Definitions	Updated and added several definitions	OFP (047G)	Enhance reader understanding	May 2018
1405 Policies	Added Stewardship Land policy information	OFP (047G)	Enhance reader understanding Previous policy did not include Stewardship Land	May 2018
Appendix A	Moved information from previous chapter appendix to the policy section and replaced with an example of a notification memorandum requesting an update and review capital asset inventory	OFP (047G)	Enhance reader understanding	May 2018
Appendix B	Removed	OFP (047G)	Provided the information in section 140503  Financial Reporting and Disclosure of Heritage Assets and Stewardship Land	May 2018

Appendix B: Example CAI and Disposal Plans Update Memo

Department of Veterans Affairs Memorandum

Date:          August 12, 2025

From:        Acting Chief Operating Officer (10C)

Subj:          For Action: Fiscal Year 2025 Capital Asset Inventory and Disposal Plans Update (VIEWS                         13480141)

To:            Veterans Integrated Service Network (VISN) Directors (10N1-23)

1. PURPOSE: This memorandum requests information for the Department of Veterans Affairs Capital Asset Inventory (CAI) and Disposal Plans Update for fiscal year 2025. The Office of Asset Enterprise Management (OAEM) call memo is attached.
   
2. BACKGROUND: VA must ensure that CAI is accurate and complete to meet a host of reporting requirements, as well as for internal decision making through efforts such as the Strategic Capital Investment Planning process. Data quality is of tremendous importance to how VA reports and requests support for VA space. While data quality has improved, there are still challenges with the accuracy and completeness of our real property data.
   
   Accurate data helps VA make informed decisions on it’s asset needs. To promote data accuracy, a “2025 CAI Call Memo” briefing is scheduled for 11:00 a.m., Eastern Standard Time (EST) on Thursday, August 14, 2025, and 3:00 p.m. EST on Tuesday, August 19, 2025. There will also be three CAI Office Hour Sessions to provide additional support, scheduled for 1:00 p.m. EST on Tuesday, August 5, 2025; 9:00 a.m. EST on Wednesday, August 13, 2025; and 2:00 p.m. EST on Thursday, August 21, 2025. Additional, the “Training and Resources Information” section of CAI’s homepage lists resource to aid in understanding CAI data elements.
   
   There are four attachments (A-D) included that provide detailed instructions and requirements to enable data accuracy for the completion of this data call. Point-in-time certification will take place directly in CAI via electronic account access certification and confirming that CAI data, disposal plan data, and supporting documentation is updated. Lease data is included in t he call memo as Attachment D. The Facility Condition Assessment and Space Calculator adjustments will be address in a future data call.
   
3. DECISION: VISNs must complete the requested CAI and Disposal Plans Update for their medical centers directly in CAI and confirm completion of their submissions via email to CAI-CALL-Memo@va.gov, no later than Monday, September 8, 2025.
   
4. For additional information or questions regarding this memorandum, please contact Nikki Zook or Brian Stebner, OAEM, at Nikki.Zook@va.gov and Brian.Stebner@va.gov.

/s/
Gregory Goins
Gregory W. Goins, FACHE

Attachments