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

Securities Issued

General

• 69 (1) In sections 70 to 74,

  discount

  discount means the excess of the par or stated value of any security issued or resold over the value of the consideration received for the security; (escompte)

  expense

  expense includes

  • (a) any commission paid for marketing equity and debt securities,

  • (b) the cost of preparing and distributing prospectuses,

  • (c) the cost of preparing certificates and other similar documents, and

  • (d) legal fees in respect of the issuance of securities; (dépenses)

  premium

  premium means the excess value of the consideration received from the issue or resale of securities over the par or stated value of the securities. (prime)

• (2) Where a prospectus includes the issuance of long-term debt and capital stock, the items of expense that are distinguishable as to debt or stock shall be segregated and the remaining expenses shall be apportioned by using the ratio that the proceeds of long-term debt or capital stock bear to the total proceeds.

• (3) Separate ledger accounts shall be maintained for each class or subclass of securities.

Share Capital

• 70 (1) Premiums received on the issuance of par value shares shall be credited to account 210 (Contributed Surplus).

• (2) The cost of issuing shares shall be debited to account 177 (Share Capital Expense) and subsequent costs of issuing shares shall be debited to account 728 (Other General Expense).

• (3) [Revoked, SOR/86-998, s. 21]

Long-term Debt

• 71 (1) The total discount and expense or the total premium less expense, as the case may be, associated with each series of each class of long-term debt shall be recorded in a separate subaccount of account 170 (Unamortized Debt Discount and Expense) or account 270 (Unamortized Debt Premium and Expense).

• (2) All the debit balances in the subaccounts referred to in subsection (1) shall be considered as part of the balance in account 170 (Unamortized Debt Discount and Expense).

• (3) All the credit balances in the subaccounts referred to in subsection (1) shall be considered as part of the balance in account 270 (Unamortized Debt Premium and Expense).

• (4) Where the total discount and expense or the total premium less expense applicable to any particular issue of securities does not exceed $25,000, a company, at the time of issue, may debit the entire amount to account 321 (Amortization of Debt Discount, Premium and Expense), as applicable.

72 In each fiscal period of a company, there shall be debited to account 321 (Amortization of Debt Discount, Premium and Expense), and credited to account 170 (Unamortized Debt Discount and Expense), a portion of each of the debit balances included in account 170 and the calculation of that portion shall be based on the ratio of the fiscal period to the remaining life of the respective securities, calculated from the beginning of the fiscal period to the date of maturity of the debt to which the charges relate, and correspondingly there shall be credited to account 321 (Amortization of Debt Discount, Premium and Expense) and debited to account 270 (Unamortized Debt Premium and Expense), a similar portion of each of the credit balances included in account 270.

• 73 (1) Where any issue or series of long-term debt of a company is redeemed before its maturity date, otherwise than by exchange or conversion into shares, the amount of the unamortized debt discount and expense or unamortized premium less expense applicable to the portion of the debt redeemed shall be credited to account 170 (Unamortized Debt Discount and Expense) or debited to account 270 (Unamortized Debt Premium and Expense), as applicable, and where the amount is not material, concurrently debited or credited to account 321 (Amortization of Debt Discount, Premium and Expense) as applicable, in the year of redemption.

• (2) Where the amount referred to in subsection (1) is material, the company shall inform the Regulator and shall debit the amount to account 341 (Extraordinary Income Deductions) or credit the amount to account 331 (Extraordinary Income), as applicable.

• (3) Notwithstanding subsections (1) and (2), where an issue or series of long-term debt of a company is redeemed before its maturity date by refunding through the issuance of new long-term debt, the company may, where the amount is not material, amortize the amount of unamortized discount and expense or unamortized premium less expense applicable to the portion of the debt redeemed, by regular debits or credits as applicable, to account 321 over a period not exceeding the lesser of the remainder of the original life of the issue or series redeemed or the life of the new long-term debt.

• (4) Where the amount referred to in subsection (3) is material, the company shall inform the Regulator and shall debit the amount to account 341 (Extraordinary Income Deductions), or credit the amount to account 331 (Extraordinary Income), as applicable.

• (5) Where an issue or series of long-term debt of a company is redeemed before its maturity date by exchange for or conversion into capital stock of the company, the manner of accounting for the transaction shall be subject to the prior approval of the Commission.

Company Long-term Debt Owned

• 74 (1) Where any long-term debt is reacquired and included in account 221 (Company Long-term Debt Owned), and the amount of the difference between the amount paid upon reacquisition and the par value plus the applicable unamortized premium or minus the applicable unamortized discount and expense, as the case may be, is not material, the amount of the difference shall be debited to account 329 (Other Income Deductions) or credited to account 319 (Other Income), as applicable.

• (2) Where the amount of the difference referred to in subsection (1) is material, the company shall inform the Regulator and shall debit the amount of the difference to account 341 (Extraordinary Income Deductions) or credit that amount to account 331 (Extraordinary Income), as applicable.

Current Assets and Liabilities

Current Assets

• 75 (1) Subject to subsection (2), current assets shall include cash and other assets that are not restricted from use for current operations and, in the normal course of operations, are expected to be converted into cash or consumed in the production of income within a one-year period.

• (2) Materials and supplies shall be included in current assets notwithstanding that they may not be consumed in a one-year period.

• (3) Current assets that are of doubtful value shall be written down or written off to the appropriate income or operating expense accounts to an extent required to adjust their value, but uncollectable accounts receivable shall be debited to account 145 (Allowance for Doubtful Accounts) to the extent that an allowance has been provided therefor.

Current Liabilities

• 76 (1) Current liabilities shall include obligations that are payable on demand or that mature or become due within one year.

• (2) Notwithstanding subsection (1), loans payable that have a maturity date within a one-year period and

  • (a) have been incurred primarily for the construction of plant, and

  • (b) will be replaced by long-term financing,

  may be included in account 249 (Other Long-term Debt).

Accrued Assets and Liabilities

• 77 (1) Where, during any month, a transaction has occurred that affects the accounts of a company but the amount involved cannot be determined with accuracy at the end of that month, the amount shall be estimated and included in the proper accounts, unless it would not appreciably affect the accounts.

• (2) Where the actual amount involved in a transaction referred to in subsection (1) has been finally determined, the estimated amount referred to in that subsection shall be adjusted to show the actual amount.

• (3) [Revoked, SOR/86-998, s. 24]

Prior Period Adjustments

• 78 (1) Where, in any fiscal year of a company, the amount of an adjustment to the income of a company for a prior fiscal year is material and the amount of the adjustment

  • (a) is specifically identified with and directly related to the business activities of a particular prior fiscal year,

  • (b) is not attributable to economic events or obsolescence occurring subsequent to the date of the financial statements for such prior fiscal year,

  • (c) depends primarily on decisions or determinations by persons other than the company, and

  • (d) could not be reasonably estimated prior to such decisions or determinations,

  the company shall inform the Regulator and shall record the amount of the adjustment in account 351 (Prior Period Adjustments).

• (2) Where, in any fiscal year of a company, the amount of an adjustment to the income of a company for a prior fiscal year is not material, the company shall include the amount of the adjustment in the same accounts in which it would have been recorded if it had been recorded in that prior fiscal year.

• (3) For the purposes of this section, the following shall be applied in determining materiality:

  • (a) items of a similar nature shall be considered in the aggregate and dissimilar items shall be considered individually; and

  • (b) to qualify for inclusion as a prior period item, the item should exceed the greater of one per cent of the total operating revenue and 10 per cent of the balance transferred from utility income accounts to account 350 (Balance Transferred from Income) for the year.

Contingent Assets and Liabilities

• 79 (1) [Revoked, SOR/86-998, s. 26]

• (2) The par value of securities or the total value of other obligations for which a company with other parties is jointly and severally liable shall be stated as a liability only in the amount that was not primarily assumed by the other parties under the terms of the agreement by which the company and the other parties become jointly and severally liable.

• (3) The amount by which the value referred to in subsection (2) exceeds the liability stated or subsequently established according to the agreement shall be shown as a contingent liability.

Affiliated Companies

• 80 (1) For the purposes of these Regulations, one company is affiliated with another company if one of them is the subsidiary of the other or both are subsidiaries of the same company or each of them is controlled by the same person.

• (2) For the purposes of these Regulations, a company is a subsidiary of another company if

  • (a) it is controlled by

    • (i) that other company,

    • (ii) that other company and one or more companies each of which is controlled by that other company, or

    • (iii) two or more companies each of which is controlled by that other company; or

  • (b) it is a subsidiary of a company that is subsidiary to that other company.

• (3) For the purposes of these Regulations, a company is controlled by another company or person or by two or more other companies if

  • (a) shares of the company carrying more than 50 per cent of the votes for the election of directors are held, otherwise than by way of security only, by or for the benefit of that other company or person or by or for the benefit of such other companies; and

  • (b) the votes carried by shares referred to in paragraph (a) are sufficient, if exercised, to elect a majority of the board of directors of the company.