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

Regulations are current to 2020-09-09 and last amended on 2020-03-16. Previous Versions

Plant Acquired or Constructed (continued)

Cost of Special Machine and Heavy Work Equipment Service

  •  (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

  •  (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.

  • SOR/2020-50, s. 13(F)

Cost of Contract Work

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

  • SOR/2020-50, s. 13(F)

Cost of Insurance, Injuries and Damages

  •  (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.

  • SOR/86-998, s. 7(E)
  • SOR/2020-50, s. 13(F)

Cost of Privileges

 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

 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.

  • SOR/2020-50, s. 13(F)

Earnings and Expenses During Construction

 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

 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

  •  (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

  •  (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.

  • SOR/2020-50, s. 13(F)

Date Placed in Service

  •  (1) On the date that plant is placed in service, the company shall cease to capitalize an allowance for funds used during construction on the plant and shall compute and charge to the appropriate account an amount representing depreciation as determined under sections 49 to 57.

  • (2) The date that the plant is in service, for the purpose of subsection (1), shall not be later than the first day of the month following issuance of a Leave to Open Order by the Commission.

  • SOR/86-998, s. 8
  • SOR/2020-50, s. 11
  • SOR/2020-50, s. 13(F)

Analogous Elements of Cost

  •  (1) Elements of cost analogous to those defined in sections 16 to 27 may be included in the cost of plant.

  • (2) The costs incurred in disposing of material excavated may be included as an element referred to in subsection (1).

Additions to Plant

General

  •  (1) For the purposes of these Regulations, additions to plant shall include

    • (a) increases in plant through purchase or construction of additional plant,

    • (b) the replacement of existing plant units, and

    • (c) the capitalization of major renewals to plant

    and, subject to the approval of the Commission, may include substantial improvements made to existing plant in order to make such plant more useful, more efficient, more durable or of greater capacity than the plant was when it was originally placed in service.

  • (2) The cost of additions referred to in subsection (1) shall be debited to the appropriate plant accounts.

  • (3) Typical elements of construction are set out in sections 16 to 27 and section 29.

  • (4) All expenditures relevant to new construction shall be capitalized.

  • (5) After the completion of initial construction, only the costs directly connected with additions or replacements of plant shall be capitalized.

  • (6) All property charged to plant accounts shall consist of plant units or minor items of plant.

  • SOR/2020-50, s. 11

Plant Units

  •  (1) Each company shall establish its own list of plant units for each plant account.

  • (2) A company’s list of plant units shall be filed with and be subject to the approval of the Commission.

  • (3) Subject to the approval of the Commission, the list of plant units, as filed, may be revised and amended from time to time.

  • (4) The cost of an additional plant unit shall be debited to the appropriate plant account.

  • (5) The book cost of a plant unit retired, whether replaced or not, shall be credited to the appropriate plant account.

  • (6) Where a plant unit is replaced, the book cost of the original plant unit shall be credited to the appropriate plant account and the cost of the replacement unit shall be debited to the appropriate plant account.

  • SOR/2020-50, s. 11
  • SOR/2020-50, s. 13(F)

Minor Items of Plant

  •  (1) Subject to section 33, the cost of a minor item of additional plant not constituting a replacement but identified with a plant unit shall be debited to the appropriate plant account.

  • (2) The cost of a minor item of plant that constitutes a replacement shall be debited to the appropriate expense account and the book cost of the minor item replaced shall not be adjusted.

 
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