Mr. Paul O'Toole:

I will do my best. The Cabra training centre was brought into being in 1975 when AnCO purchased a factory that made bowling equipment for approximately €400,000. Over the intervening 35 years, FÁS and AnCO spent approximately €7 million on capital works improving and equipping the centre and making it fit for purpose. The total expenditure over 35 years was about €7.4 million. The building was built in the 1950s and over that period of time literally tens of thousands of learners either attended Cabra or had training managed from there.

The impairment arises because at the time of disposal following 2010, the carrying value of asset - in other words, how it was reflected in the books of FÁS - was greater than the net recoverable amount. It was carried in the books on an historical cost basis. The €7.4 million charge is accumulated, the depreciation is charged against that annually and the result is termed the net book value. That is the accounting convention used by FÁS and by many organisations. Buildings are written off over a period of 50 years. There is not an active market in FÁS training centres so on the rare occasion they come to the market, it is basically what the value is for their alternative use. It was on the basis that people might use the asset. What has happened is that the site and the buildings are going to different State organisations. An Post is developing a sorting office on the site and we have handed the remainder of the site to the Department of Education and Skills for a national school. At the time of disposal, we looked at what market opportunities were there and we had the site and buildings valued at €1.5 million. A repair was required to the roof and that is where the net realisable value of €1.2 million came into being. It reflects the commercial value of its alternative use at the time of disposal.

The observations of the Comptroller and Auditor General mean we need to look at our depreciation policy to see if it is appropriate to write off buildings and fittings over that period of time. It reflects the fact that the assets are purchased and developed not as commercial assets but as State institutions and if they go on the market where one is looking for alternative uses, it will depend on market conditions at the time.