Oil Pipeline Uniform Accounting Regulations (C.R.C., c. 1058)

Index of Accounts

Income Accounts

Credits

• 401 Operating revenue

• 402 Extraordinary income

• 403 Other revenue

• 404 Investment valuation adjustment

• 405 Income from affiliated companies

• 406 Income from investments

• 407 Income from sinking and other funds

• 408 Release of premium on long term debt

• 409 Gain on foreign exchange

• 410 Other income

• 410.1 Allowance for funds used during construction (Credit)

Debits

• 411 Operating expenses

• 412 Other expenses

• 413 Provision for income taxes

• 414 Depreciation

• 415 Provision for loss in valuation of investments

• 416 Interest on long term debt

• 417 Other interest

• 418 Amortization of discount on long term debt

• 419 Loss on foreign exchange

• 420 Other income deductions

• 421 Interest on amounts due affiliated companies

• 422 Extraordinary income deductions

• 423 Amortization

• 425 Income transferred to other companies

Text Pertaining to Income Accounts

General

The balance of all income accounts shall be closed to retained earnings account 302 (Balance Transferred from Income) at the end of each fiscal year.

Credits

• 401 Operating Revenue

  This account shall include total revenue derived from operations, as shown in the classification of operating revenue accounts.

• 402 Extraordinary Income

  • (1) Unless otherwise directed by the Commission in a particular case, a company shall include in this account all material gains constituting extraordinary items: (See Regulations, subsections 10(2) and (4)).

  • (2) The following is a representative list of items of extraordinary income to be included in the account: (See Regulations, section 14)

    • (a) gain on extraordinary retirement of depreciable plant: (See Regulations, section 40);

    • (b) gain on sale or retirement of depreciable other plant: (See Regulations, section 43);

    • (c) gain on sale or retirement of land: (See Regulations, section 44);

    • (d) gain on sale of assets included in Sinking Funds or Miscellaneous Special Funds: (See Regulations, section 62);

    • (e) gain on sale of Temporary Cash Investments: (See Regulations, section 64);

    • (f) gain on sale of Investments in Affiliated Companies or Other Investments: (See Regulations, section 66);

    • (g) adjustment to account 74 as described in subsection 68(2) of the Regulations;

    • (h) gain on redemption of long term debt: (See Regulations, section 73); and

    • (i) gain on reacquisition of long term debt: (See Regulations, section 73).

• 403 Other Revenue

  • (1) This account shall include

    • (a) the total revenue derived from operation of, or income arising from, assets included in account 34 (Other Plant); and

    • (b) the total revenue from transportation plant leased to others in the form of operating units or systems, where the lessee has exclusive possession.

  • (2) The following is a representative list of items of revenue to be included in the account: (See Regulations, section 14)

    • (a) revenue from commercial power plants;

    • (b) revenue from land and buildings not used in pipeline service;

    • (c) revenue from land and property acquired and held in anticipation of an indefinite future use; and

    • (d) revenue from mineral and timber land.

• 404 Investment Valuation Adjustment

  • (1) With the approval of the Commission, this account shall be credited with amounts debited to account 74 (Allowance for Loss in Value of Investments) in respect of reductions in the allowance for loss in value of investments carried in account 20 (Investments in Affiliated Companies) and account 21 (Other Investments): (See texts of accounts 74 and 415, and Regulations, section 68).

  • (2) With the approval of the Commission, this account shall include credits arising under the terms of agreements or contracts that provide that any surplus resulting from the operation by others of properties of other companies having a separate corporate existence but whose operations are considered to be an integral part of the company’s oil transportation system, is to be paid in whole or in part to the company.

  • (3) In determining the amount receivable under subsection (2), consideration shall be given not only to the revenues and expenses but also to other items of income or deduction that affect that amount.

• 405 Income from Affiliated Companies

  • (1) This account shall include income from a company’s investment in stocks, securities and other types of indebtedness that are issued or assumed by affiliated companies and in respect of which the income is the property of the accounting company, whether such stocks, securities and other types of indebtedness are owned by the accounting company and held in its treasury or deposited in trust or are otherwise controlled: (See Regulations, section 80).

  • (2) The amounts included in this account shall be divided to show separately the following types of income:

    • (a) dividends;

    • (b) interest; and

    • (c) other income.

  • (3) Income from affiliated companies shall not be credited to this account until such time as it is recorded on the books of the affiliated company.

  • (4) At the option of the company, there may be included in this account the applicable portion of discount or premium on any investments recorded in account 20: (See Regulations, section 63).

• 406 Income from Investments

  • (1) This account shall include

    • (a) interest and dividends from investments recorded in account 2 (Temporary Cash Investments) and account 21 (Other Investments);

    • (b) interest on bank balances, open accounts and special deposits, where the interest is the property of the company; and

    • (c) where the amounts involved are not material, profits and losses on sales or amounts required to provide allowance for the decrease in market value of temporary cash investments: (See Regulations, sections 64 and 65).

  • (2) At the option of the company, there may be included in this account any applicable portion of discount or premium on investments recorded in accounts 2 and 21: (See Regulations, section 63).

• 407 Income from Sinking and Other Funds

  • (1) This account shall include

    • (a) the income accrued on cash, securities and other assets (not including securities issued or assumed by the company) recorded in account 22 (Sinking Funds) and account 23 (Miscellaneous Special Funds); and

    • (b) immaterial gains realized and losses sustained in the sale of securities recorded in account 22 (Sinking Funds) and account 23 (Miscellaneous Special Funds): (See Regulations, section 62).

  • (2) At the option of the company, there may be included in this account the applicable portion of the discount or premium on any securities recorded in account 22 (Sinking Funds) and account 23 (Miscellaneous Special Funds): (See Regulations, section 62).

• 408 Release of Premium on Long Term Debt

  • (1) This account shall include, during each fiscal period, such portion of the premium on outstanding long term debt as may be applicable to the period.

  • (2) The portion referred to in subsection (1) shall be determined in accordance with section 71, 72 or 73 of the Regulations, as applicable.

• 409 Gain on Foreign Exchange

  This account shall include gains on foreign exchange during the fiscal year, including realized gains as well as gains due to the conversion to the Canadian dollar equivalent, on assets and liabilities held in foreign currencies.

• 410 Other Income

  This account shall include

  • (a) gains realized from the sale of materials and supplies not purchased for resale;

  • (b) immaterial gains realized from reacquisition at less than net book value of debt securities issued by the company;

  • (c) immaterial gains arising from the sale of land, other plant or investments carried in account 20 (Investments in Affiliated Companies) and account 21 (Other Investments);

  • (d) the excess, if any, of capitalized interest during construction over the debits to accounts 416 (Interest on Long Term Debt) or 417 (Other Interest); and

  • (e) all other income items not provided for in other accounts under the Regulations.

• 410.1 Allowance for funds used during construction (Credit)

  This account shall be credited with amounts concurrently debited to account 189 (Allowance for funds used during construction): (See Regulations, section 27 and account 189).

Debits

• 411 Operating Expenses

  This account shall include the total of the balances contained in the operating expense accounts listed in the 600 and 700 series of accounts.

• 412 Other Expenses

  • (1) This account shall include

    • (a) all expenses, including depreciation but excluding income taxes, arising from the operation of other plant the cost of which is included in account 34 (Other Plant); and

    • (b) all expenses, other than depreciation, of transportation plant leased to others as operating units or systems while the lessee has exclusive possession.

  • (2) The following is a representative list of items of other expenses to be included in the account: (See Regulations, section 14)

    • (a) expenses of commercial power plants;

    • (b) expenses of land and buildings not used in pipeline service;

    • (c) expenses of land and property acquired and held in anticipation of an indefinite future use; and

    • (d) expenses of mineral and timber land.

• 413 Provision for Income Taxes

  • (1) This account shall include provision for federal, provincial or other government income taxes levied on the basis of a company’s operations for the fiscal year, except income taxes that are debited to account 318 (Income Tax Applicable to Retained Earnings Adjustments).

  • (2) This account shall be subdivided as follows:

    • (a) current income taxes applicable to income before extraordinary items;

    • (b) current income taxes and reductions of current income taxes applicable to extraordinary items; and

    • (c) deferred income taxes.

• 414 Depreciation

  • (1) This account shall include debits for the depreciation of plant included in

    • (a) account 30 (Transportation Plant);

    • (b) account 38 (Transportation Plant Leased to Others); and

    • (c) account 36 (Improvements to Leased Facilities).

  • (2) The company’s subsidiary records shall be maintained to show separately the debits for depreciation for each plant account.

• 415 Provision for Loss in Valuation of Investments

  • (1) This account shall be debited with amounts concurrently credited to account 74 (Allowance for Loss in Value of Investments) in respect of a reduction in the value of investments carried in account 20 (Investments in Affiliated Companies) or account 21 (Other Investments): (See text of account 74 and Regulations, sections 67 and 68).

  • (2) With the approval of the Commission, this account shall include all debits under the terms of agreements or contracts that provide that the deficits resulting from the operation by others of properties of other companies having a separate corporate existence but whose operations are considered to be an integral part of the company’s oil transportation system, are to be paid in whole or in part by the company.

  • (3) In considering the amount payable under subsection (2), consideration shall be given to the revenues and expenses and to other items of income or deductions that affect that amount.

• 416 Interest on Long Term Debt

  • (1) This account shall include current accruals of interest on all classes of debt included in account 80 (Long Term Debt) and account 57 (Long Term Debt Due Within One Year), less current accruals on the debt included in account 24 (Company Long Term Debt Owned).

  • (2) This account shall be maintained to show separately the interest on each class of long term debt.

• 417 Other Interest

  This account shall include

  • (a) all interest except that debited to account 416 (Interest on Long Term Debt) or to account 421 (Interest on Amounts Due Affiliated Companies); and

  • (b) all discounts, premiums and expenses on short term notes issued by the company and maturing one year or less from the date of the balance sheet.

• 418 Amortization of Discount on Long Term Debt

  This account shall be debited during each fiscal period of the company with the portion of the discount and expenses on long term debt obligations that is applicable to that period and such portion shall be determined in accordance with section 71, 72 or 73 of the Regulations, as applicable.

• 419 Loss on Foreign Exchange

  This account shall include losses on foreign exchange during the fiscal year, including realized losses as well as losses due to the conversion to the Canadian dollar equivalent of assets and liabilities held in foreign currencies.

• 420 Other Income Deductions

  This account shall include

  • (a) immaterial losses through reacquisitions at greater than net book value of debt securities issued by the company;

  • (b) immaterial losses arising from the sale of land, other plant or investments carried in account 20 (Investments in Affiliated Companies) and account 21 (Other Investments); and

  • (c) all other income deductions not provided for in other accounts under the Regulations.

• 421 Interest on Amounts Due Affiliated Companies

  This account shall include the current accruals of interest on all classes of debt included in account 85 (Advances from Affiliated Companies) or account 53 (Accounts Payable — Affiliated Companies).

• 422 Extraordinary Income Deductions

  • (1) A company shall include in this account all material losses constituting extraordinary items. (See Regulations, subsections 10(2) and (4)).

  • (2) The following is a representative list of items of extraordinary deductions to be included in the account: (See Regulations, section 14)

    • (a) loss on an extraordinary retirement of depreciable plant: (See Regulations, section 40);

    • (b) loss on sale or retirement of depreciable Other Plant: (See Regulations, section 43);

    • (c) loss on sale or retirement of land: (See Regulations, section 44);

    • (d) loss on sale of assets included in Sinking Funds or Miscellaneous Special Funds: (See Regulations, section 62);

    • (e) loss on sale of Temporary Cash Investments: (See Regulations, section 64);

    • (f) reduction in the value of Temporary Cash Investments: (See Regulations, section 65);

    • (g) loss on sale of Investments in Affiliated Companies or Other Investments: (See Regulations, section 66);

    • (h) reduction in the value of Investments in Affiliated Companies or Other Investments: (See Regulations, section 67);

    • (i) loss on redemption of long term debt: (See Regulations, section 73);

    • (j) loss on reacquisition of long term debt: (See Regulations, section 73); and

    • (k) payments for options to purchase land for use in contemplated projects not proceeded with: (See text of account 44).

• 423 Amortization

  • (1) This account shall include

    • (a) debits for the amortization of plant included in

      • (i) account 30 (Transportation Plant), and

      • (ii) account 38 (Transportation Plant Leased to Others),

    if a change from depreciation accounting to amortization accounting has been approved by the Commission: (See Regulations, section 60); and

    • (b) debits for the amortization of Improvements to Leased Facilities: (See text of account 36).

  • (2) Subsidiary records shall be maintained to show separately the amortization expense for each

    • (a) group of plant accounts;

    • (b) plant account; or

    • (c) group of assets within a plant account that perform similar functions.

• 425 Income Transferred to Other Companies

  • (1) This account shall include the whole or any portion of income of a company where that income is payable to another company under the terms of an agreement or contract that contains no obligation for reimbursement by that other company to the accounting company.

  • (2) In determining the amount payable by an accounting company under subsection (1), consideration shall be given to revenues and expenses and other items of income or deduction that affect that amount.