Gas Pipeline Uniform Accounting Regulations (SOR/83-190)

Operating Revenue Accounts

11 Operating revenue accounts, set out in Schedule V as account series 500 to 579, shall be used to classify all revenue of a company from pipeline operations.

Operating and Maintenance Expense Accounts

• 12 (1) Operating expense accounts, set out in Schedule VI as account series 610 to 729, shall include records of a company’s operating expenses pertaining to pipeline operations.

• (2) Maintenance expense accounts, set out in Schedule VII as accounts series 810 to 889, shall include records of a company’s maintenance expenses pertaining to pipeline operations.

• (3) The operating and maintenance expenses referred to in subsections (1) and (2) shall be recorded in the appropriate account under the applicable service function referred to in Schedule VI and VII.

• (4) The service functions referred to in subsection (3) are

  • (a) gathering;

  • (b) products extraction;

  • (c) gas supply (operating only);

  • (d) underground storage;

  • (e) transmission;

  • (f) general; and

  • (g) administrative and general (operating only).

• (5) Expenses common to more than one operating or maintenance expense account shall, where practicable, be equitably apportioned between such accounts and adequate records showing the basis of such apportionment shall be maintained.

• (6) The operating and maintenance expense accounts under the service functions listed in paragraphs (4)(a) to (f) shall be supported by subsidiary accounts that record the expenses, by location as practicable for each major facility such as each main gathering system, products extraction plant, gas storage facility, compressor station, main pipeline system and any other facility that is separately located.

Clearing Accounts

• 13 (1) Where it is not possible to record expenditures directly to a particular expense or plant account, a company may maintain clearing accounts for recording the expenditures.

• (2) Amounts recorded in clearing accounts shall be regularly distributed to the appropriate expense or plant accounts on an equitable basis.

• (3) Any balances in the clearing accounts shall be substantially distributed before the end of each fiscal year unless items held therein relate to a future period.

• (4) The net monthly balance in clearing accounts shall be included in account 179 (Other Deferred Debits) or account 279 (Other Deferred Credits), as applicable.

• (5) Where an operator maintains clearing accounts for the purpose of distributing monthly balances to the beneficial owners of a pipeline, the accounts shall contain sufficient particulars to permit ready identification and reconciliation with the accounts of the beneficial owners.

Interpretation of Lists of Items

• 14 (1) An item that appears in a representative list in any account in the schedules shall be included in the corresponding account of a company if the inclusion of the item is consistent with the text of the account.

• (2) A representative list shall be considered only as representative and not as excluding from an account any analogous component or item that is omitted from the list.

Plant Acquired or Constructed

General

• 15 (1) A company shall record in the plant accounts the costs incurred to acquire or construct any plant.

• (2) Where the consideration given for plant referred to in subsection (1) is other than money, the money value of the consideration on the day the contract for the acquisition or construction comes into force shall be debited to the applicable accounts and a record of the consideration, in sufficient detail to identify it, shall be retained by the company.

• (3) Where a company purchases all or part of the existing facilities of another company, the purchasing company shall prepare and submit to the Commission for approval details of the proposed method of accounting for such purchase together with the company’s reasons for the proposed method of accounting.

• (4) Where the facilities referred to in subsection (3) are purchased from an affiliated company, the original cost of the facilities to the affiliated company and the accumulated depreciation applicable to the facilities to the date of purchase, as shown in the accounts of the affiliated company, shall be recorded in the accounts of the purchasing company.

• (5) Balance sheet account 115 (Gas Plant Under Construction) shall be supported by subsidiary records that record separately each transaction for each project involving plant additions, replacements or relocations.

• (6) Where a plant acquired by a company is constructed by or for that company, the costs to be recorded in the plant accounts shall include the elements of cost set out in sections 16 to 27 and section 29.

Cost of Labour

• 16 (1) Cost of labour for construction of plant shall include the amount paid for labour, including employee benefits, performed by the company’s employees.

• (2) Where the employees referred to in subsection (1) are specially assigned to construction work, their pay while so engaged shall be included in the cost of the work.

• (3) No charge shall be made to plant accounts for the pay of the company’s employees whose services in connection with construction are merely incidental, except as provided in section 26.

• (4) The allocation of travelling and other incidental expenses of the company’s employees shall be made to accounts on the same basis as the distribution of the pay of those employees.

Cost of Materials and Supplies

• 17 (1) Cost of materials and supplies shall include the purchase price of materials and supplies at the point of free delivery, the cost of ad valorem taxes, inspection, transportation and, where appropriate, a suitable proportion of store expenses.

• (2) In determining the cost of materials and supplies, suitable allowance shall be made for all discounts allowed and realized on the purchase thereof.

• (3) In debiting the plant accounts with materials and supplies used, allowance shall be made for the value of

  • (a) unused portions and other salvage;

  • (b) the materials recovered from temporary pipe, scaffolding and other temporary structures used in construction; and

  • (c) small tools recovered and usable for other purposes.

Cost of Special Machine and Heavy Work Equipment Service

• 18 (1) Cost of special machine and heavy work equipment service shall include the cost of labour, material, depreciation, supplies and other costs incurred in maintaining and operating power shovels, scrapers, pile drivers, dredgers, ditchers, material loaders and similar equipment, and any amount paid to others for rent, operation and maintenance of such equipment.

• (2) Where a construction project necessitates the purchase of equipment to be used exclusively on the project until the project is completed, the cost of the equipment shall be debited to the accounts representing the cost of the project and while the cost remains so debited no debit shall be made to expenses for depreciation on the equipment.

• (3) The amount realized from any subsequent sale of equipment referred to in subsection (2), or the appraised value of any equipment retained after the completion of the project for which it was purchased, shall be credited to the accounts debited with the equipment’s cost.

• (4) The appraised value of equipment retained after the completion of the project for which it was purchased shall be debited to the appropriate plant account and, thereafter, for the purposes of accounting, that appraised value shall be considered as the cost of the equipment.

Cost of Transportation

• 19 (1) Cost of transportation incurred in the construction of plant shall include the cost of transporting men, equipment and material and supplies used for construction purposes.

• (2) The cost of transportation of construction material to the point where material is received by the company shall be included, if practicable, in the cost of the material.

Cost of Contract Work

20 Cost of contract work shall include any amount paid for work performed under contract by other companies and individuals.

Cost of Insurance, Injuries and Damages

• 21 (1) Cost of insurance, injuries and damages shall include

  • (a) the premiums paid for insuring plant during construction;

  • (b) the costs incurred for protection against fire and wilful destruction of plant during construction; and

  • (c) the costs incurred in respect of injuries to persons, damage to property of others and damage to plant incidental to construction.

• (2) Insurance recovered or recoverable for compensation for injuries to persons injured during the construction of plant shall be credited to the account or accounts debited with the cost of the injuries.

• (3) Insurance recovered or recoverable in respect of property damage incidental to the construction of plant shall be credited to the account or accounts debited with the cost of the damage.

• (4) Subject to subsection (5), any injury or damage incidental to the removal of a structure or part thereof shall be debited to the account recording the retirement costs of the structure.

• (5) Any injury or damage incidental to the removal of a structure or part thereof that is an encumbrance on newly acquired land by a company shall be included in the cost of that land.

Cost of Privileges

22 Cost of privileges shall include compensation paid for the temporary use of public and private property in connection with a construction project.

Cost of Engineering Services

23 Cost of engineering services shall include any amount paid to other companies, firms or individuals engaged by the company to plan, design, prepare estimates, supervise, inspect or give general advice and assistance in connection with a construction project.

Earnings and Expenses During Construction

24 Earnings and expenses during the construction of plant shall include all revenues derived during the construction period from property that is included in the cost of plant under construction and all expenses that are attributable to the revenues received.

Cost of Rents

25 Cost of rents shall include any amount paid for the use of construction quarters and office space occupied by construction forces.

Cost of Overhead During Construction

• 26 (1) Cost of overhead during construction shall include engineering, supervision and administrative salaries and expenses, employee benefits, legal fees, taxes, shop service and other analogous items, to the extent that they may be reasonably considered to be plant costs.

• (2) Only actual and reasonable overhead costs shall be assigned to particular jobs or units.

• (3) The records supporting the entries for cost of overhead during construction shall show the total amount of each type of overhead expenditure capitalized in the year and the basis of distribution thereof in accordance with the instructions set out in account 498 (Overhead Charged to Construction).

Allowance for Funds Used During Construction

• 27 (1) A company may, at its option, capitalize an allowance for funds used during construction.

• (2) The allowance for funds used during construction shall be calculated in accordance with the instructions set out in account 497 (Allowance for Funds Used During Construction), and may, at the option of the company, be prorated over the appropriate depreciable plant accounts.