Oil Pipeline Uniform Accounting Regulations (C.R.C., c. 1058)
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Regulations are current to 2024-04-01 and last amended on 2020-03-16. Previous Versions
Oil Pipeline Uniform Accounting Regulations
C.R.C., c. 1058
Regulations Respecting the Uniform System of Accounts of Oil Pipeline Companies
Short Title
1 These Regulations may be cited as the Oil Pipeline Uniform Accounting Regulations.
Interpretation
2 In these Regulations,
- Board
Board[Repealed, SOR/2020-50, s. 1]
- book cost
book cost means, in respect of plant, the amount that is recorded in a plant account without any deduction for accumulated depreciation or amortization or for any other purpose; (valeur comptable)
- Commission
Commission means the Commission referred to in subsection 26(1) of the Canadian Energy Regulator Act; (Commission)
- contingent assets
contingent assets means assets without known value to the company until fulfilment of conditions regarded as uncertain; (actif éventuel)
- contingent liabilities
contingent liabilities means liabilities that may, under certain conditions, become obligations of the company but are not direct or assumed obligations on the date of the balance sheet; (passif éventuel)
- fiscal year
fiscal year means, in relation to the accounts of a company, the calendar year or the fiscal year approved by the Commission for the accounts of the company; (exercice financier)
- minor item of plant
minor item of plant means an associated part or item included within a plant unit; (article d’installation accessoire)
- net salvage value
net salvage value means salvage value minus any removal costs; (valeur nette de récupération)
- operator
operator means a company authorized by the Commission to construct or operate an oil pipeline that is owned in undivided interest; (exploitant)
- other plant
other plant means any installation or property that is entirely distinct from and is not operated in connection with the transportation plant of the company; (autre installation)
- plant
plant means, in respect of an oil pipeline company, any installation or property the cost of which is to be recorded in the Plant Accounts listed in Schedule II; (installation)
- plant retired
plant retired means
(a) a unit of plant, whether it is replaced or not, or
(b) plant classified as a minor item of plant that is not replaced,
that is sold, abandoned, demolished, dismantled or otherwise withdrawn from transportation service; (installation réformée)
- plant unit
plant unit means a complete structure, apparatus or item of equipment that constitutes a component of any installation or property that could properly be included in the plant accounts listed in Schedule II and includes a part of any structure or apparatus where such part is a physically distinct part of such structure or apparatus and the value of such part is material; (unité d’installation)
- salvage value
salvage value means the amount received for plant retired, including insurance proceeds, and includes any amount received for material salvaged from plant retired where the material is sold; (valeur de récupération)
- transportation plant
transportation plant means plant used for any aspect of pipeline operations or plant held for use under a definite plan for future oil pipeline operations; (installation de transport)
- undivided interest
undivided interest means a beneficial ownership in common of the assets, liabilities, revenues and expenses of an oil pipeline by two or more companies or persons. (copropriété indivise)
3 A company may submit any question of doubtful interpretation of these Regulations to the Regulator for consideration and guidance.
Application
4 These Regulations apply only to a company authorized by the Commission to construct or operate an oil pipeline.
5 (1) Every Group 1 company shall
(a) keep separate books of account in Canada in a manner consistent with generally accepted accounting principles;
(b) unless otherwise authorized or instructed by the Commission, keep accounts in the manner set out in these Regulations; and
(c) keep a system of accounts as prescribed in these Regulations.
(2) Every Group 2 company
(a) shall keep separate books of account in Canada in a manner consistent with generally accepted accounting principles until the expiration of one year after such time as the Commission grants leave to abandon the operation of the pipeline;
(b) shall file a set of audited financial statements with the Regulator within one hundred and twenty (120) days after the end of each fiscal year of the company;
(c) shall comply with subsections 6(1), (7), (8) and (9); and
(d) is exempt from complying with these Regulations except as prescribed in paragraphs (a) to (c).
(3) In this section,
- Group 1 company
Group 1 company means a company listed in Schedule VII; and (compagnies du groupe 1)
- Group 2 company
Group 2 company means any company, other than a Group 1 company, that constructs or operates an oil pipeline. (compagnies du groupe 2)
- SOR/86-999, s. 1
- SOR/2020-50, s. 4
- SOR/2020-50, s. 5
Records
6 (1) A company’s accounting records shall provide sufficient particulars to show fully the facts pertaining to all entries made in the accounts.
(2) A company shall maintain the applicable accounts listed in Schedules I to VI and may, in addition, keep subsidiary accounts for its own purposes.
(3) The account numbers listed in Schedules I to VI shall be set out in the descriptive headings of the applicable ledger accounts, computer print-outs or other accounting records.
(4) All transactions applicable to a month shall be recorded in the accounts for that month and, at the end of that month, trial balances of the accounts shall be prepared.
(5) A company shall close its accounts at the end of each fiscal year.
(6) Final accounting entries for each month shall be made not later than 30 days after the last day of the month, except that the final entries for the last month of each fiscal year may be made within a period not exceeding 90 days from the end of that last month.
(7) The books, accounts and records referred to herein include not only accounting records in a limited technical sense, but all records such as minute books, stock books, reports, correspondence, memoranda, computer print-outs, tapes and card decks that may be useful in determining the history of or facts pertaining to any transaction.
(8) The books, accounts and records shall be readily accessible for examination by representatives of the Regulator.
(9) Where an oil pipeline is owned in undivided interest, the operator shall maintain all books, accounts and records in a manner that permits ready identification to the books, accounts and records of the beneficial owners of the pipeline.
(10) All accounts required to be maintained pursuant to subsection (2) shall be retained until the expiration of one year after leave to abandon the operation of the pipeline has been granted by the Commission.
- SOR/83-250, s. 1
- SOR/86-999, s. 2
- SOR/2020-50, s. 4
- SOR/2020-50, s. 5
Account Grouping
Balance Sheet Accounts
7 (1) Balance sheet accounts, set out in Schedule I as account series 1 to 93, shall, in respect of a company, disclose the company’s financial position at the balance sheet date.
(2) The balance sheet accounts referred to in subsection (1) shall record assets, liabilities, capital stock, and retained earnings or deficit, as the case may be.
Plant Accounts
8 (1) Plant accounts, set out in Schedule II as account series 100, are subsidiary to balance sheet accounts 30 (Transportation Plant) and 38 (Transportation Plant Leased to Others), and shall be used to classify a company’s transportation plant.
(2) Plant accounts shall be supported by subsidiary accounts that record the costs, by location, of
(a) each major facility including each pumping station, main pipeline, receiving, storage and delivery facility; and
(b) any other facility that is separately located.
(3) Any installation or property not used in pipeline operations shall be recorded in balance sheet account 34 (Other Plant).
Retained Earnings Accounts
9 Retained earnings accounts, set out in Schedule III as account series 300, shall show a summary of all changes in balance sheet account 92 (Retained Earnings) for each year and shall include
(a) the balance transferred from income for the year;
(b) prior period adjustments;
(c) miscellaneous retained earnings adjustments;
(d) dividend appropriations; and
(e) income tax applicable to retained earnings adjustments.
Income Accounts
10 (1) Income accounts, set out in Schedule IV as account series 400, shall show a summary of a company’s revenue, expenses and extraordinary items.
(2) A company shall inform the Regulator of all extraordinary items and shall record them in account 402 (Extraordinary Income) or account 422 (Extraordinary Income Deductions), as applicable.
(3) A company’s net balance of income or loss shall be transferred to retained earnings at the end of each fiscal year.
(4) In this section, extraordinary items means material gains or losses that are not typical of a company’s normal business activities, are not expected to occur regularly over a period of years and would not be considered as recurring factors in any evaluation of the ordinary operating process of the company.
(5) 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 an extraordinary 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 income to account 302 for the year.
- SOR/86-999, s. 3
- SOR/2020-50, s. 4
Operating Revenue Accounts
11 Operating revenue accounts, set out in Schedule V as account series 500, shall be used to classify all revenue of a company from pipeline operations and from operations incident thereto.
Operating Expense Accounts
12 (1) Operating expense accounts, set out in Schedule VI as account series 600 and 700, shall show cost elements making up a company’s maintenance, transportation and general expenses pertaining to pipeline operations.
(2) The operating expense accounts shall include a separate series of accounts for the following company service functions:
(a) the gathering function; and
(b) the trunk function.
(3) The gathering function series of accounts referred to in paragraph (2)(a) shall include amounts in respect of the gathering and collection of oil from the oil fields, refineries or other sources and transportation of oil to the point of connection to meters or storage tanks or the intake side of the manifold at the trunk receiving site or station.
(4) The trunk function series of accounts referred to in paragraph (2)(b) shall include amounts in respect of the transportation of oil from the receiving stations on the trunk line to the point of connection with the facilities of other pipelines and consignees.
(5) Expenses common to the gathering and trunk accounts referred to in subsection (2) shall be equitably apportioned between them and supported by records showing the basis of the apportionment.
(6) The operating expense accounts under the maintenance and transportation subheadings of Schedule VI shall be supported by subsidiary accounts recording the expenses, by location, of
(a) each major facility including each pipeline district, pumping station, oil tank farm and warehouse; and
(b) any other facility that is separately located.
(7) The operating expense accounts under the general subheading of Schedule VI shall be supported by subsidiary accounts recording the expenses by location where practicable or by department.
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 except for any items held therein that relate to a future period.
(4) The net monthly balance in clearing accounts shall be included in account 45 (Other Deferred Debits) or account 78 (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 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 actual 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 39 (Transportation 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 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 to which such compensation is debited.
(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 bases of distribution thereof.
Allowance for Funds Used During Construction
27 (1) A company may, at its option, capitalize an allowance for funds used during construction.
(2) An allowance for funds used during construction shall be calculated in accordance with the instructions set out in account 189 (Allowance for Funds Used During Construction), and may, at the option of the company, be prorated over the appropriate depreciable plant accounts.
- SOR/86-999, s. 4
Date Placed in Service
28 (1) On the date that plant is placed in service the company shall cease to capitalize interest during construction on the plant and shall compute and charge to the appropriate account an amount representing depreciation as determined under sections 48 to 55.
(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/86-999, s. 5
- SOR/2020-50, s. 5
Analogous Elements of Cost
29 (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
30 (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 within the plant accounts shall consist of plant units or minor items of plant.
Plant Units
31 (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.
Minor Items of Plant
32 (1) Subject to section 33, the cost of a minor item of additional plant not constituting a replacement 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.
(3) The book cost of a minor item of plant retired and not replaced shall be credited to the appropriate plant account.
Minimum Rule
33 (1) Where a minor item of plant is acquired at a cost of less than $1,000, the cost shall be debited to expense.
(2) A company shall not
(a) combine unrelated items of plant for the purpose of excluding the items from the provisions of subsection (1); or
(b) divide expenditures made under a general plan for related items that cost $1,000 or more per item into smaller parcels for the purpose of debiting capital items to expense.
(3) With the approval of the Commission after the filing of a request by a company, the company may, for the purpose of its accounting, adopt a limit of less than the amount set out in subsection (1) for any class of plant.
(4) No change may be made in the amount of a limit referred to in subsection (3) except with the prior approval of the Commission.
Major Renewals
34 (1) In this section, cost of renewals means the aggregate of
(a) the cost of material, other than old parts remaining in a rebuilt plant unit, and
(b) the cost of labour used in the rebuilding process,
but does not include the cost of dismantling and repairing old parts that are re-used.
(2) Subject to subsection (3), where the cost of renewals to parts of a plant unit exceeds 50 per cent of the new replacement cost of a plant unit of the same kind and class, the plant unit shall be considered as rebuilt.
(3) Subsection (2) does not apply to the renewal of a plant unit where the new replacement cost of that unit would not exceed $120,000.
(4) A rebuilt plant unit shall be accounted for as an addition and the old plant unit that the rebuilt plant unit replaced shall be accounted for as retired from service.
(5) Subject to subsection (6), the charge to the appropriate plant account for a rebuilt plant unit shall be the aggregate of
(a) the value of old parts remaining in the rebuilt plant unit; and
(b) the cost of labour and material applied.
(6) The cost of dismantling and repairing old parts used in the renewal of plant shall be debited to maintenance expense.
Second-Hand Plant
35 Where second-hand plant not previously owned by the company is acquired in a physical condition that necessitates extensive expenditures to bring it up to the standard required by the company, the expenditures shall be debited to the appropriate plant account.
Retirements of Plant
General
36 (1) Where a plant unit, whether replaced or not, is retired from pipeline operations, the book cost of the plant unit shall be credited to the appropriate plant account.
(2) Where a minor item of plant is retired and not replaced, the book cost of that item shall be credited to the appropriate plant account.
(3) The book cost and the costs of removal of a depreciable plant unit or a depreciable minor item of plant retired and not replaced shall be debited to account 31 (Accumulated Depreciation — Transportation Plant) or to account 32 (Accumulated Amortization — Transportation Plant), as applicable.
(4) The net salvage value of a plant unit retired or of a minor item of plant retired and not replaced shall be credited to the accumulated depreciation or accumulated amortization account referred to in subsection (3).
(5) Each retirement project shall be supported by subsidiary records that show separately the details thereof.
Book Cost
37 Where the book cost of any retired plant is not recorded separately, the book cost of that plant shall be its appropriate share of the book cost of the entire group in which the particular plant is located.
Salvage Value
38 (1) Where salvaged material is retained for use by a company, the original cost, estimated if not known, of the material, less a fair allowance for depreciation, shall be debited to account 8 (Materials and Supplies).
(2) The salvage value of depreciable plant or salvaged material therefrom shall be credited to account 31 (Accumulated Depreciation — Transportation Plant) or account 32 (Accumulated Amortization — Transportation Plant), as applicable.
(3) The removal costs incurred in dismantling or demolishing retired depreciable plant and in recovering salvage therefrom shall be debited to account 31 (Accumulated Depreciation — Transportation Plant) or account 32 (Accumulated Amortization — Transportation Plant), as applicable, except that the current cost of removing and replacing a minor item of plant in maintenance operations shall be included in the appropriate expense account.
Ordinary Retirement
39 (1) In respect of depreciable plant, ordinary retirement means a retirement of depreciable plant that results from causes reasonably assumed to have been anticipated or contemplated in prior depreciation or amortization provisions.
(2) There shall be no debit or credit to income or to retained earnings for an ordinary retirement.
Extraordinary Retirement
40 (1) In respect of depreciable plant, extraordinary retirement means a retirement of depreciable plant that results from causes not reasonably assumed to have been anticipated or contemplated in prior depreciation or amortization provisions, including such causes as fire, storm, flood, sudden and complete obsolescence or unexpected and permanent shutdown of an entire operating assembly.
(2) Where the gain or loss on an extraordinary retirement is material, the company shall inform the Regulator and shall transfer the amount of the gain or loss from account 31 (Accumulated Depreciation-Transportation Plant) or account 32 (Accumulated Amortization-Transportation Plant) to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.
(3) Immaterial gains or losses resulting from extraordinary retirements shall be accounted for in the same way as ordinary retirements.
- SOR/86-999, s. 6
- SOR/2020-50, s. 4
Pipeline Relocations
41 (1) Where a plant unit of pipeline is relocated, it shall be considered as plant retired and its book cost shall be credited to the appropriate plant account.
(2) Where a plant unit of pipeline has been relocated, the relocated plant unit shall be considered as an addition and the cost shall be debited to the appropriate plant account.
(3) Where a company’s pipeline or any part thereof is located in accordance with an agreement that may require the company to relocate all or part of its pipeline and the circumstances are such that the company has no reasonable alternative but to relocate more than a plant unit of pipeline, the company may, with the approval of the Commission, debit the costs of relocation to expenses for the period in which the relocation was carried out.
(4) Where a relocation of a type referred to in subsection (3) results from action by a governmental authority, the cost of relocation may be accounted for in the manner set out in subsection (3).
Line Pipe Replacements
42 (1) Where a plant unit of line pipe is replaced with other pipe in the same location, a company shall debit to the appropriate plant account the cost of opening and back filling the trench together with the cost of hauling, laying and connecting the pipe, the cost of removing retired pipe from the trench and other costs of pipeline construction.
(2) The cost of reconditioning line pipe not removed shall be accounted for as repairs and not as retirements or replacements.
Other Plant
43 (1) Where plant is no longer required for pipeline purposes but is retained by the company, its book cost shall be transferred to account 34 (Other Plant) and the accumulated depreciation or accumulated amortization, if any, with respect thereto shall be transferred from account 31 (Accumulated Depreciation — Transportation Plant) or account 32 (Accumulated Amortization — Transportation Plant) to account 35 (Accumulated Depreciation — Other Plant) or to account 40 (Accumulated Amortization — Other Plant), as applicable.
(2) Where depreciable other plant included in account 34 (Other Plant) is retired or sold, the book cost, salvage and removal costs shall be recorded in account 35 (Accumulated Depreciation — Other Plant).
(3) Where the gain or loss from the sale or retirement of depreciable other plant is material, the company shall inform the Regulator and shall transfer the amount of the gain or loss from account 35 (Accumulated Depreciation-Other Plant) or account 40 (Accumulated Amortization-Other Plant) to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.
(4) Where the gain or loss from the sale or retirement of depreciable other plant included in account 34 (Other Plant) is not material, the company shall transfer the amount of the gain or loss from account 35 (Accumulated Depreciation — Other Plant) or account 40 (Accumulated Amortization — Other Plant) to account 410 (Other Income) or to account 420 (Other Income Deductions), as applicable.
- SOR/86-999, s. 7
- SOR/2020-50, s. 4
Land Retired or Sold
44 (1) Where land is retired or sold, account 30 (Transportation Plant), account 34 (Other Plant), or account 38 (Transportation Plant Leased to Others) shall be credited with the book cost of the land.
(2) Where the gain or loss from the sale or retirement of land is material the company shall inform the Regulator and shall transfer the amount of the gain or loss to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.
(3) Where the gain or loss from the sale or retirement of land is not material, the company shall transfer the amount of the gain or loss to account 410 (Other Income) or to account 420 (Other Income Deductions), as applicable.
- SOR/86-999, s. 8
- SOR/2020-50, s. 4
Maintenance
General
45 The cost of repairs recorded in the maintenance accounts for transportation plant shall include
(a) the cost of inspection to determine the repairs that are necessary;
(b) the cost of adjusting, repairing or replacing parts; and
(c) the cost of inspection, testing and running of parts to determine whether or not the repairs have been properly made and the repaired item is ready for service.
46 (1) Maintenance accounts kept in accordance with Schedule VI shall be debited with the costs of repairing and maintaining plant and shall include
(a) incidental costs including the construction and removal of false work in connection with maintenance;
(b) the cost of relocating pipeline plant where retirement accounting for units of plant is not involved;
(c) the cost of raising or lowering line pipe in the trench where retirement accounting for units of plant is not involved;
(d) the cost of repairing fences, sidewalks, driveways and streets within or adjacent to the plant; and
(e) the cost of installing, maintaining and removing temporary facilities to prevent any interruptions in operations.
(2) Where employees whose pay is normally debited to transportation expenses
(a) mow and beautify grounds and buildings,
(b) periodically restore seasonal features such as gardens, shrubbery and lawns, or
(c) clear and remove snow, ice and fallen timber,
their pay and any other costs arising from such employment may be debited to the maintenance or transportation account, at the option of the company.
Equalization of Maintenance Expenses
47 Where a company prepares a budget for its maintenance expenses for a fiscal year, the following procedure may be followed:
(a) the actual monthly expenses shall be debited to the appropriate maintenance accounts;
(b) the excess of an actual expense over a budgeted monthly expense shall be debited to account 73 (Maintenance Expense Equalization) and credited to account 610-7 or 710-7 (Equalization — Plant);
(c) the excess of a budgeted expense over an actual monthly expense shall be debited to account 610-7 or 710-7 (Equalization — Plant) and credited to account 73 (Maintenance Expense Equalization); and
(d) at the end of the fiscal year, the balance in account 73 (Maintenance Expense Equalization) shall be transferred to account 610-7 or 710-7 (Equalization — Plant).
Depreciation
General
48 In sections 49 to 57,
- group system
group system means a system by which a weighted average rate of depreciation is calculated for a particular group of plant accounts, a plant account, or a group of assets within a plant account, and established in recognition of the fact that some part of the investment in a group of assets may be recovered through salvage realization and that there will be variations in the service lives of the assets constituting the group, even among assets of the same class; (système d’amortissement par catégorie)
- service life
service life means the period of time between the placement of plant in service and its retirement for accounting purposes; (durée d’utilisation)
- service value
service value means the book cost of plant minus the estimated net salvage value of that plant. (valeur de service)
49 (1) Under the group system, in the case of an ordinary retirement of an individual asset in a group of assets, the accumulated depreciation attributable to the asset shall, for the purposes of these Regulations, be considered to be equal to the cost of the asset minus any amount that may reasonably be recoverable through salvage realization, whether or not the actual service life of the asset is shorter or longer than the anticipated average service life for the group.
(2) Individual assets, within a group of assets, remaining in use after reaching their average service life expectancy shall not be regarded as fully depreciated until actual retirement or until the group is fully depreciated, whichever is earlier.
50 (1) Charges for depreciation with respect to accounts that are classed by section 51 as being accounts covering assets that are depreciable shall be computed in conformity with the group system.
(2) A company shall charge depreciation by using such one of the following methods as is chosen by the company and approved by the Commission for use by the company:
(a) the straight line method;
(b) the use or unit of production method;
(c) the diminishing value method; or
(d) any other systematic method consistent with generally accepted accounting principles.
- SOR/86-999, s. 9
- SOR/2020-50, s. 5
Depreciable Assets
51 All plant accounts, with the exception of accounts 101, 151 and 171 (Land), are classed as accounts covering assets that are depreciable and, for the purpose of the group system of depreciation accounting, depreciable asset accounts may be grouped according to the nature of the plant included in each account.
Depreciation Charges
52 (1) There shall be debited each month to expenses or other appropriate accounts and credited to the accounts for accumulated depreciation amounts that will allocate, in a systematic and rational manner, the service value of plant over its estimated service life.
(2) Monthly depreciation charges under the straight line method shall be computed by
(a) applying the annual percentage rate of depreciation to the depreciation base as of the first of each month and dividing the result by 12; or
(b) with the prior approval of the Commission, applying the annual percentage rate of depreciation to the depreciation base at the beginning of the company fiscal year and dividing the result by 12.
(3) Monthly depreciation charges under the use or unit of production method shall be computed by applying the appropriate rate of use or production per unit for the year to the number of units of use or production for the month.
(4) Monthly depreciation charges under the diminishing value method shall be computed by applying the annual percentage rate to the depreciation base as of the first of each month and dividing the result by 12.
(5) A company shall compute depreciation in accordance with subsection 28(1).
(6) The monthly debits for depreciation of plant included in account 30 (Transportation Plant) or account 38 (Transportation Plant Leased to Others) shall be debited to account 414 (Depreciation).
(7) Depreciation on assets included in account 34 (Other Plant) shall be debited to account 412 (Other Expenses).
- SOR/86-999, s. 10
- SOR/2020-50, s. 5
Rates of Depreciation
53 (1) A separate depreciation rate shall be used in computing depreciation charges for each group of plant accounts, each plant account or each group of assets within a plant account.
(2) In determining the rate of depreciation, consideration shall be given to all relevant factors including variations in use, increasing obsolescence or inadequacy.
(3) Each depreciation rate used shall be approved by the Commission but where no rate has previously been approved for any class of plant, an interim rate as estimated by the company shall be used.
54 (1) As soon as the information can be assembled, a company shall file with the Regulator depreciation rates estimated to be appropriate for each group of plant accounts, each plant account or each group of assets within a plant account.
(2) The rates referred to in subsection (1) shall be based on the service value and estimated service life of plant, as developed by a study of the company’s history and experience and such engineering and other information as may be available with respect to future operating conditions.
(3) The rates referred to in subsection (1) shall be established to produce a charge for depreciation equal to the sum of the amounts that would otherwise be chargeable as depreciation for each of the various classes of plant included in a group of plant accounts, for each plant account or for each group of assets within a plant account.
(4) The rates referred to in subsection (1) may be developed by a company by the method deemed most appropriate for the portrayal of the depreciation experienced and, when filed, shall be accompanied by a statement showing their bases and the methods employed in their computation.
(5) A company shall, at any time, upon direction of the Commission, conduct a study on the suitability of depreciation rates in use in the light of the company’s history and available engineering data, and shall submit to the Commission for approval a report of the results of such study together with recommendations for any desired changes in depreciation rates.
55 (1) Where, in the opinion of a company, depreciation rates that have been filed with the Regulator are no longer applicable, the company shall file revised rates with the Commission for approval.
(2) Where a company acquires plant for which no depreciation rates have been approved by the Commission, the company shall immediately compile and submit to the Regulator its estimate of the appropriate depreciation rates, developed in accordance with the provisions of sections 53 and 54.
Accumulated Depreciation
56 (1) Accumulated depreciation shall be subdivided to show separately the amount applicable to
(a) each group of plant accounts,
(b) each plant account, or
(c) each group of assets within a plant account,
for which a separate weighted average rate of depreciation has been established.
(2) Where the amount is material, accumulated depreciation applicable to the assets in one depreciation group shall not be transferred by a company to another depreciation group without the approval of the Commission.
Plant Records
57 (1) A company shall keep records of depreciable plant and plant retirements in sufficient detail to show the service life of plant that has been retired and to permit the service life of plant to be estimated by the use of the mortality method or other appropriate method.
(2) The records referred to in subsection (1) shall reflect, for each group of depreciable plant in respect of which a separate depreciation rate has been established, the percentage of the value of salvage from plant retired from that group.
(3) Where the amount is material, assets shall not be transferred from a group of plant accounts, plant account or group of assets within a plant account to another group of plant accounts, plant account or group of assets within a plant account without the approval of the Commission.
Amortization
58 For the purposes of sections 59 and 60, amortization means the gradual extinguishing of an amount included in account 30 (Transportation Plant), account 38 (Transportation Plant Leased to Others) or account 34 (Other Plant), by distributing such amount over a fixed period or over the estimated remaining life of the plant.
59 Where it is anticipated by a company that plant will be abandoned owing to the exhaustion of a particular source of traffic, obsolescence or any other cause, the company shall not change from depreciation accounting to amortization accounting without first obtaining the authorization of the Commission.
60 (1) The monthly debits for amortization of transportation plant included in account 30 (Transportation Plant), account 36 (Improvements to Leased Facilities) and account 38 (Transportation Plant Leased to Others) shall be debited to account 423 (Amortization).
(2) Amortization on assets included in account 34 (Other Plant) shall be debited to account 412 (Other Expenses).
Insurance
61 (1) Insurance premiums paid to insurance companies shall be debited to account 630-14 or 730-14 (Insurance), unless the premiums are chargeable to clearing accounts or relate to
(a) the construction of pipeline facilities; or
(b) employee benefits.
(2) Insurance costs relative to the construction of pipeline facilities shall be debited pro rata to the appropriate plant accounts.
(3) Insurance costs relative to employee benefits shall be debited to account 630-13 or 730-13 (Employee Benefits).
(4) Any amount recovered from the insurance referred to in subsection (1), (2) or (3) shall be credited to the account or accounts originally debited with the related loss or expense.
(5) Where a company elects to create and maintain reserves for self-insurance, account 630-14 or account 730-14 (Insurance) shall be debited with estimated amounts in lieu of commercial insurance premiums, and account 72 (Insurance Appropriations) shall be credited with the estimated amounts.
(6) A schedule of risks covered by self-insurance shall be kept showing the character of risk and the rates used to compute the estimated amounts referred to in subsection (5).
(7) The rates referred to in subsection (6) shall not exceed commercial rates for the same protection.
(8) Where, as a result of an event or accident covered by self-insurance, costs are incurred of a type that would normally be debited to an expense account, such costs shall be debited to the insurance appropriations account and any excess of the expenditure over the applicable self-insurance shall be debited to the appropriate expense account.
(9) Where the self-insurance schedule referred to in subsection (6) covers the retirement of plant, the accounting for the retirement shall be as outlined in section 36 and the self-insurance applicable to the retired item shall be transferred from account 72 (Insurance Appropriations) to account 31 (Accumulated Depreciation — Transportation Plant) or to account 32 (Accumulated Amortization — Transportation Plant), as applicable.
(10) Where a company insures with a commercial insurance company any risks covered by self-insurance, the premiums for the insurance policy shall be debited to the insurance appropriations account and any recoveries under the policies shall be credited thereto.
Funds and Appropriations
62 (1) Cash, securities or other assets set aside for a specific purpose shall be debited to account 22 (Sinking Funds), account 23 (Miscellaneous Special Funds), or account 3 (Special Deposits), as applicable, and the appropriate asset account shall be credited.
(2) Income from assets held in account 22 (Sinking Funds) and account 23 (Miscellaneous Special Funds) shall be credited to account 407 (Income from Sinking and Other Funds).
(3) Where a mortgage or any contractual obligation entered into by a company requires that income from assets held in a fund be added to that fund, the company shall make the necessary transfer to the fund account.
(4) Where a transfer referred to in subsection (3) is to account 23 (Miscellaneous Special Funds), and represents a company’s contribution to account 70 (Welfare and Pension Appropriations) or to account 72 (Insurance Appropriations), the company shall concurrently debit account 420 (Other Income Deductions) and credit account 70 or 72, as applicable, with the amount transferred.
(5) A company’s contribution to account 70 (Welfare and Pension Appropriations) or to account 72 (Insurance Appropriations) shall be provided by debits to expenses.
(6) Where the gain or loss on the sale of assets recorded in account 22 (Sinking Funds) or account 23 (Miscellaneous Special Funds) is material, the company shall inform the Regulator and shall transfer the gain or loss to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.
(7) Where the gain or loss on the sale of assets referred to in subsection (6) is not material, the company shall transfer the gain or loss to account 407 (Income from Sinking and Other Funds) or to account 420 (Other Income Deductions), as applicable.
- SOR/86-999, s. 11
- SOR/2020-50, s. 4
Securities Owned
General
63 (1) In this section and sections 64 to 68, cost means the amount of money paid by a company to acquire securities or, where the consideration paid for the securities is other than money, the money value of the consideration at the time the securities are acquired.
(2) A company shall record the cost of its investment in securities, excluding amounts paid for accrued interest and accrued dividends, in the appropriate accounts at the time of acquisition of the securities.
(3) [Revoked, SOR/86-999, s. 12]
(4) Where securities having a fixed maturity date and recorded in account 2 (Temporary Cash Investments), account 20 (Investments in Affiliated Companies), account 21 (Other Investments), account 22 (Sinking Funds), or account 23 (Miscellaneous Special Funds) are purchased at a discount or premium, that discount or premium may be amortized over the remaining life of the securities by periodic debits or credits to the account in which the cost of the securities is recorded, with corresponding credits or debits to account 406 (Income from Investments), account 405 (Income from Affiliated Companies) or account 407 (Income from Sinking and Other Funds), as applicable, and if the amount to be amortized does not exceed $1,000, a company may write off the total discount or premium at one time.
(5) No amortization entries shall be recorded in respect of discounts on securities held as investments unless there is reason to believe that the securities will be disposed of at a sum equal to their par value, or that the par value will be collected at maturity.
- SOR/86-999, s. 12
Temporary Cash Investments
64 (1) Where the gain or loss on the sale of assets recorded in account 2 (Temporary Cash Investments) is material, the company shall inform the Regulator and shall transfer the amount of the gain or loss to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.
(2) A gain or loss on a sale referred to in subsection (1) that is not material shall be transferred to account 406 (Income from Investments).
- SOR/86-999, s. 13
- SOR/2020-50, s. 4
65 (1) Where the amount required to provide for reductions in the market value of temporary cash investments is material, the company shall inform the Regulator and shall debit the amount required to account 422 (Extraordinary Income Deductions) and concurrently credit account 2 (Temporary Cash Investments).
(2) Where the amount required to provide for reductions in the market value of temporary cash investments is not material, it shall be debited to account 406 (Income from Investments) and concurrently credited to account 2 (Temporary Cash Investments).
- SOR/86-999, s. 14
- SOR/2020-50, s. 4
Investments in Affiliated Companies and Other Investments
66 (1) Where the gain or loss on the sale of assets recorded in account 20 (Investments in Affiliated Companies) or account 21 (Other Investments) is material, the company shall inform the Regulator and shall transfer the amount of the gain or loss to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.
(2) A gain or loss on a sale referred to in subsection (1) that is not material shall be transferred to account 410 (Other Income) or to account 420 (Other Income Deductions), as applicable.
- SOR/86-999, s. 15
- SOR/2020-50, s. 4
67 (1) A company shall be governed by recognized accounting principles in reducing the value at which securities are recorded in account 20 (Investment in Affiliated Companies) or account 21 (Other Investments) to reflect anticipated loss in value.
(2) Permanent impairment of the value of securities referred to in subsection (1) shall be recorded in the accounts but fluctuations in market value shall not be recorded.
(3) Where a reduction in the value of securities referred to in subsection (1) is material, the company shall inform the Regulator and shall debit the amount of the reduction to account 422 (Extraordinary Income Deductions).
(4) Where a reduction in the value of securities referred to in subsection (1) is not material, the company shall debit the amount of the reduction to account 415 (Provision for Loss in Valuation of Investments).
- SOR/86-999, s. 16
- SOR/2020-50, s. 4
68 (1) Subject to the approval of the Commission, a company may write-down its investment in a separately incorporated company controlled by the company to reflect the company’s share of the losses of the separately incorporated company, where the operation of such a company is considered to be an integral part of the company’s oil transportation system.
(2) A company shall credit the amount of a write-down referred to in subsection (1) to account 74 (Allowance for Loss in Value of Investments) and debit that amount to account 415 (Provision for Loss in Valuation of Investments) unless the amount of the write-down is material, in which case it shall be debited to account 422 (Extraordinary Income Deductions).
(3) Subject to the approval of the Commission, where a company provides for a loss in accordance with this section and the separately incorporated company makes a profit in a subsequent year, the controlling company shall adjust the allowance for losses recorded in account 74 by debiting the amount of the profit to that account and concurrently crediting account 404 (Investment Valuation Adjustment) unless the profit is material, in which case it shall be credited to account 402 (Extraordinary Income).
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.
Capital Stock
70 (1) Premiums received on the issuance of par value capital stock shall be credited to account 91 (Contributed Surplus).
(2) The cost of issuing capital stock shall be debited to account 42 (Organization Expenses).
(3) [Revoked, SOR/86-999, s. 17]
- SOR/86-999, s. 17
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 41 (Unamortized Debt Discount and Expense) or account 76 (Unamortized Premium on Long Term Debt).
(2) All the debit balances in the subaccounts referred to in subsection (1) shall be considered as part of the balance in account 41 (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 76 (Unamortized Premium on Long Term Debt).
(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 418 (Amortization of Discount on Long Term Debt), or credit the entire amount to account 408 (Release of Premium on Long Term Debt), as applicable.
72 In each fiscal period of a company, there shall be debited to account 418 (Amortization of Discount on Long Term Debt), and credited to account 41 (Unamortized Debt Discount and Expense), a portion of each of the debit balances included in account 41 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 income account 408 (Release of Premium on Long Term Debt) and debited to account 76 (Unamortized Premium on Long Term Debt), a similar portion of each of the credit balances included in account 76.
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 capital stock, 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 41 (Unamortized Debt Discount and Expense) or debited to account 76 (Unamortized Premium on Long Term Debt), as applicable, and where the amount is not material, concurrently debited to account 418 (Amortization of Discount on Long Term Debt) or credited to account 408 (Release of Premium on Long Term Debt), 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 422 (Extraordinary Income Deductions) or credit the amount to account 402 (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 to account 418 or credits to account 408, as applicable, 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 422 (Extraordinary Income Deductions), or credit the amount to account 402 (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.
- SOR/86-999, s. 18
- SOR/2020-50, s. 4
- SOR/2020-50, s. 5
Company Long Term Debt Owned
74 (1) Where any long term debt is reacquired and included in account 24 (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 420 (Other Income Deductions) or credited to account 410 (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 422 (Extraordinary Income Deductions) or credit the amount to account 402 (Extraordinary Income), as applicable.
- SOR/86-999, s. 19
- SOR/2020-50, s. 4
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 75 (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 86 (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/86-999, s. 20]
- SOR/86-999, s. 20
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 303 (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 income to account 302 for the year.
- SOR/86-999, s. 21
- SOR/2020-50, s. 4
Contingent Assets and Liabilities
79 (1) [Revoked, SOR/86-999, s. 22]
(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.
- SOR/86-999, s. 22
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.
Oil Accounting
Allowance Oil Accounting
81 (1) A company shall record any amounts earned as a result of its tariff relating to oil allowances covering losses due to shrinkage or other factors.
(2) Oil allowances referred to in subsection (1) shall be valued at not more than the market value at point of delivery and shall be debited to account 9 (Oil Inventory) and concurrently shall be credited to account 505 or 555 (Allowance Oil Revenue).
(3) Gains in oil allowances resulting from pumping, temperature corrections or other factors shall be debited to account 9 (Oil Inventory) and credited to account 505 or 555 (Allowance Oil Revenue).
(4) Shortages in oil allowances shall be debited to account 505 or 555 (Allowance Oil Revenue) and credited to account 9 (Oil Inventory).
(5) Where, at balance sheet date, the debits to account 505 or 555 (Allowance Oil Revenue) exceed the credits, the net debit shall be debited to account 620-8 or 720-8 (Oil Loss).
General Oil Accounting
82 (1) Where the operations of a company have consumed oil that has been accounted for by a debit to account 9 (Oil Inventory), that account shall be credited and account 620-2 or 720-2 (Operating Fuel and Power) shall be debited with the oil at the value of the inventory of oil carried in account 9.
(2) Oil lost through line breaks or other extraordinary circumstances shall be accounted for by debiting account 620-8 or 720-8 (Oil Loss) and crediting account 9 (Oil Inventory), and purchases of oil to replenish shortages or losses shall be accounted for by debiting account 9.
(3) Where a company requires part of its oil inventory to provide an operating oil supply, account 33 (Operating Oil Supply) shall be debited and account 9 (Oil Inventory) shall be credited with the value of the oil so required and the oil shall be priced at the value at which it is carried in inventory.
(4) Sales of oil shall be accounted for by a credit to account 9 (Oil Inventory) or account 33 (Operating Oil Supply), as applicable, and the difference between the selling price and the value at which the oil is recorded in account 9 or 33 shall be debited or credited, as applicable, to account 620-8 or 720-8 (Oil Loss).
SCHEDULE I(ss. 6 and 7)
Index of Accounts
Balance Sheet Accounts
Assets
Current Assets
- 1Cash
- 2Temporary cash investments
- 3Special deposits
- 4Accounts receivable — trade
- 5Accounts receivable — other
- 6Accounts receivable — affiliated companies
- 7Interest and dividends receivable
- 8Materials and supplies
- 9Oil inventory
- 12Other current assets
- 15Prepaid expenses
Investments
- 20Investments in affiliated companies
- 21Other investments
- 22Sinking funds
- 23Miscellaneous special funds
- 24Company long term debt owned
Fixed Assets
- 30Transportation plant
- 31Accumulated depreciation — transportation plant
- 32Accumulated amortization — transportation plant
- 33Operating oil supply
- 34Other plant
- 35Accumulated depreciation — other plant
- 36Improvements to leased facilities
- 37Accumulated amortization — improvements to leased facilities
- 38Transportation plant leased to others
- 39Transportation plant under construction
- 40Accumulated amortization — other plant
Deferred Debits
- 41Unamortized debt discount and expense
- 42Organization expenses
- 43Public improvements
- 44Preliminary survey and investigation costs
- 45Other deferred debits
Liabilities
Current Liabilities
- 50Loans and notes payable
- 51Joint revenue payable
- 52Accounts payable and accrued
- 53Accounts payable — affiliated companies
- 54Interest payable and accrued
- 55Dividends payable
- 56Taxes accrued
- 57Long term debt due within one year
- 60Other current liabilities
Deferred Credits and Appropriations
- 70Welfare and pension appropriations
- 71Accumulated tax reductions applicable to future years
- 72Insurance appropriations
- 73Maintenance expense equalization
- 74Allowance for loss in value of investments
- 75Allowance for doubtful accounts
- 76Unamortized premium on long term debt
- 78Other deferred credits
Long Term Liabilities
- 80Long term debt
- 85Advances from affiliated companies
- 86Other long term debt
Capital Stock and Surplus
- 90Capital stock
- 91Contributed surplus
- 92Retained earnings
- 93Excess of appraised value of fixed assets over depreciated cost
Text Pertaining to Balance Sheet Accounts
Assets
Current Assets
1 Cash
This account shall include
(a) commercial bank accounts available for general chequing purposes as distinguished from bank accounts provided for special deposits or other special purposes;
(b) petty cash funds; and
(c) funds received by a company, recorded as cash receipts and undeposited at the close of the accounting period.
2 Temporary Cash Investments
This account shall include the cost of securities acquired for the purpose of temporarily investing cash, such as government treasury bills, deposit receipts, short term notes and other investments of a short term nature. (See Regulations, sections 63, 64 and 65).
3 Special Deposits
This account shall include
(a) the unexpended balances of funds deposited specifically for the payment of dividends, interest and other current liabilities; and
(b) other deposits subject to current withdrawal for specific purposes only, including amounts deposited with airlines, utilities, or unemployment insurance commissions.
4 Accounts Receivable — Trade
This account shall include amounts receivable for the transportation, storage and delivery of oil, exclusive of such amounts receivable from affiliated companies.
5 Accounts Receivable — Other
This account shall include the following items when the amounts involved are considered collectable:
(a) advances to officers, employees and agents as working funds;
(b) amounts due from corporations, firms and individuals;
(c) the book value of notes receivable or other similar evidence of money receivable, due within one year from the date of issue; and
(d) other similar items.
(See Regulations, section 75).
6 Accounts Receivable — Affiliated Companies
(1) This account shall include all amounts due from affiliated companies, such as trade accounts, dividends and interest, where such amounts are subject to settlement within one year from the date of the balance sheet. (See Regulations, section 80).
(2) This account shall be maintained in a manner that will enable information on receivables from each affiliated company to be submitted under the following headings:
(a) secured obligations;
(b) unsecured notes;
(c) advances;
(d) debit balances in open accounts;
(e) interest accrued on any of the above when such interest is subject to current settlement; and
(f) miscellaneous receivables.
7 Interest and Dividends Receivable
(1) This account shall include the amount of interest accrued to the date of the balance sheet on
(a) bonds owned,
(b) loans made, and
(c) the amount of dividends declared on stocks owned,
except where the interest or dividend receivable is from an affiliated company.
(2) No dividends or other returns on securities issued or assumed by the accounting company shall be included in this account.
8 Materials and Supplies
(1) This account shall include the cost of materials purchased primarily for use in construction, operations or maintenance such as shop material, articles in process of fabrication by the accounting company, spare parts, fittings, valves, appliances, line pipe and other supplies, but shall not include the cost of materials referred to in account 39 (Transportation Plant Under Construction).
(2) Materials and supplies purchased shall be debited to this account at their actual costs at the point of free delivery plus transportation costs, ad valorem taxes and any other relevant costs and in determining the cost of materials and supplies, allowance shall be made for all discounts allowed in their purchase.
(3) Materials and supplies issued shall be credited to this account and concurrently debited to the appropriate construction, operating or maintenance expense account on the basis of a unit price determined by the use of cumulative average, first in — first out, or such other method of inventory accounting as conforms with accepted accounting practices consistently applied.
(4) Materials recovered in connection with construction, maintenance work or the replacement or demolition of plant shall be debited to this account at their original cost, estimated if not known, less a fair allowance for depreciation, and concurrently credited to the appropriate construction, maintenance or accumulated depreciation account.
(5) Where salvaged material is sold at a higher or lower price than that at which it is included in this account, an appropriate adjustment shall be made in the accounts which were credited when the material was recovered.
9 Oil Inventory
(1) This account shall include the balances representing the value of oil owned by the company other than the value of oil used to maintain lines and storage tanks in condition for the transportation of commercial oil.
(2) The oil stock referred to in subsection (1) shall be valued at not more than its market value at point of delivery at the balance sheet date. (See Regulations, sections 81 and 82).
12 Other Current Assets
This account shall include current assets not provided for in other accounts under the Regulations.
15 Prepaid Expenses
(1) Expenses paid in advance by the accounting company to cover any future period of time shall be entered in this account until subsequently debited to appropriate accounts.
(2) The prepaid expense account shall be maintained so as to disclose the amount of each class of expenditure.
Investments
20 Investments in Affiliated Companies
(1) This account shall include the cost of the company’s investment in securities issued or assumed by affiliated companies and investment advances made to affiliated companies. (See Regulations, sections 63, 66, 67 and 68).
(2) This account shall be maintained in a manner that will enable information on the investment in each affiliated company to be submitted under the following headings:
(a) stocks;
(b) bonds and debentures;
(c) other secured obligations;
(d) unsecured notes;
(e) investment advances;
(f) interest accrued on any of the above when the interest is not subject to current settlement; and
(g) miscellaneous investments.
(3) Where any security referred to in subsection (2) is pledged, a complete record thereof shall be maintained.
21 Other Investments
(1) This account shall include
(a) the cost of the company’s investment in securities issued or assumed by non-affiliated companies, other than securities held in special deposits or special funds; and
(b) investment advances made to non-affiliated companies and individuals. (See Regulations, sections 63, 66 and 67).
(2) This account shall be maintained in a manner that will enable information on the investment in each non-affiliated company to be submitted under the following headings:
(a) stocks;
(b) bonds and debentures;
(c) other secured obligations;
(d) unsecured notes;
(e) investment advances;
(f) interest accrued on any of the above when interest is not subject to current settlement; and
(g) miscellaneous investments.
(3) Where any security referred to in subsection (2) is pledged, a complete record thereof shall be maintained.
22 Sinking Funds
(1) This account shall include cash and the cost of securities and other assets that
(a) have been segregated in distinct funds;
(b) are for the purpose of providing resources for the redemption of debt or capital stock; and
(c) are held by trustees or by the company’s treasurer.
(2) A separate account shall be kept for the sinking funds applicable to each class of debt or capital stock issue.
(3) An appropriate record shall be maintained for securities issued or assumed by the company and held in sinking funds. (See Regulations, section 62).
23 Miscellaneous Special Funds
(1) This account shall include cash and the cost of securities and other assets that are held by trustees, managers or the company’s treasurer and that have been segregated in funds for insurance, employees’ pensions, savings, relief, hospital and other purposes not provided for in other accounts under the Regulations.
(2) A separate account shall be kept for each fund.
(3) This account shall not include funds that the company holds solely as trustee and in which it has no beneficial interest. (See Regulations, section 62).
24 Company Long Term Debt Owned
(1) This account shall include the par value of long term debt actually issued or assumed by a company and reacquired by it and not retired or cancelled, but shall not include long term debt held in sinking funds or miscellaneous special funds. (See Regulations, section 74).
(2) Where the long term debt referred to in subsection (1) is to be repaid in a foreign currency, for the purposes of that subsection par value means the par value in the foreign currency converted to the Canadian dollar equivalent.
(3) This account shall show
(a) total par value unpledged; and
(b) total par value pledged.
Fixed Assets
30 Transportation Plant
(1) This account shall include the company’s investment in plant used or held for use under a definite plan for pipeline operations. (See Regulations, sections 15 to 35).
(2) Where transportation plant is retired from service, this account shall be credited with the cost of the plant retired from service. (See Regulations, sections 36 to 44).
(3) Where the consideration given for transportation plant is other than cash, the value of such consideration shall be determined on a cash basis and the entry recording such transaction shall describe the actual consideration with sufficient particularity to identify it.
(4) The company shall furnish the Commission, at its request, with the particulars of the determination of the cash value of any consideration referred to in subsection (3).
(5) The balance in this account shall be classified according to Schedule II and shall be supported by subsidiary records in which the plant is subdivided into component parts corresponding to
(a) each group of plant accounts;
(b) each plant account; or
(c) each asset or group of assets within a plant account.
(6) The records referred to in subsection (5) shall show in detail the current debits and credits.
31 Accumulated Depreciation — Transportation Plant
(1) This account shall be credited with amounts of depreciation concurrently debited to account 414 (Depreciation) to cover the loss in service value of depreciable transportation plant, the cost of which is included in account 30 (Transportation Plant) or in account 38 (Transportation Plant Leased to Others).
(2) At the time of retirement of depreciable transportation plant, this account shall be credited with amounts recovered from salvage and insurance and debited with
(a) the cost of the plant retired; and
(b) the costs of removal, demolition or dismantling of the plant retired.
(3) Where, as a result of an extraordinary retirement, a material gain or loss is credited to account 402 (Extraordinary Income) or debited to account 422 (Extraordinary Income Deductions), this account shall be debited or credited, as applicable. (See Regulations, section 40).
(4) For general ledger and balance sheet purposes, this account shall be regarded and treated as a composite reserve but, for the purposes of analysis, the company shall maintain subsidiary records in which the accumulated depreciation is subdivided into component parts corresponding to
(a) each group of plant accounts;
(b) each plant account; or
(c) each asset or group of assets within a plant account.
(5) The records referred to in subsection (4) shall show in detail the current debits and credits.
(6) This account shall be subdivided as follows:
(a) Accumulated depreciation — Transportation plant; and
(b) Accumulated depreciation — Transportation plant leased to others.
32 Accumulated Amortization — Transportation Plant
(1) Where a company is authorized by the Commission to amortize amounts carried in Account 30 (Transportation Plant), or in Account 38 (Transportation Plant Leased to Others), this account shall be credited with amounts concurrently debited to Account 423 (Amortization). (See Regulations, sections 59 and 60).
(2) Where a change from depreciation accounting to amortization accounting is authorized by the Commission with respect to any group of plant accounts, plant account or group of assets within a plant account, the applicable balance in Account 31 (Accumulated Depreciation — Transportation Plant) shall be transferred to this account.
(3) When the final costs of retirement of amortizable transportation plant are established, this account shall be credited with amounts recovered from salvage and insurance and debited with
(a) the cost of the plant retired; and
(b) the costs of removal, demolition or dismantling of the plant retired.
(4) Where, as a result of an extraordinary retirement, a material gain or loss is credited to account 402 (Extraordinary Income) or debited to account 422 (Extraordinary Income Deductions), this account shall be debited or credited, as applicable. (See Regulations, section 40).
(5) Subsidiary records shall be maintained for each group of plant items under a separate amortization authorization.
(6) This account shall be subdivided as follows:
(a) Accumulated amortization — Transportation plant; and
(b) Accumulated amortization — Transportation plant leased to others.
33 Operating Oil Supply
This account shall include the value of oil owned by the company and used to maintain lines and storage tanks in condition for the transportation of commercial oil. (See Regulations, section 82).
34 Other Plant
(1) This account shall include investment in any installation or property that is entirely distinct from and not operated in connection with transportation plant.
(2) Where other plant is retired from service, this account shall be credited with the cost of the plant retired.
(3) The following is a representative list of items of other plant to be included: (See Regulations, section 14)
(a) commercial power plants;
(b) land and buildings not used in pipeline service;
(c) land and property acquired and held in anticipation of an indefinite future use;
(d) mineral and timber lands.
35 Accumulated Depreciation — Other Plant
(1) This account shall be credited with amounts of depreciation debited to account 412 (Other Expenses) to cover loss in service value of depreciable plant, the cost of which is included in account 34 (Other Plant).
(2) At the time of retirement of depreciable other plant, this account shall be credited with amounts recovered from salvage and insurance and debited with
(a) the cost of the plant retired; and
(b) the costs of removal, demolition or dismantling of the plant retired.
36 Improvements to Leased Facilities
(1) This account shall include the cost of improvements made to facilities leased from others, where the improvements are made for the purpose of oil pipeline operations.
(2) Any amounts refunded to the company by the lessor in connection with the improvements referred to in subsection (1) shall be credited to this account.
(3) The balance in this account shall be classified according to Schedule II.
(4) Where the service life of the improvements is terminable by the action of the lease, the cost of the improvements, less net salvage, shall be spread over the life of the lease by debits to account 423 (Amortization) and concurrent credits to account 37 (Accumulated Amortization — Improvements to Leased Facilities).
(5) Where the service life of the improvements is not terminated by the action of the lease, the cost of the improvements, less net salvage, shall be accounted for as depreciable plant by debits to account 414 (Depreciation) and concurrent credits to account 31 (Accumulated Depreciation — Transportation Plant).
37 Accumulated Amortization — Improvements to Leased Facilities
This account shall be credited with amounts written off and concurrently debited to account 423 (Amortization) in respect of improvements to leased facilities, the cost of which is included in account 36 (Improvements to Leased Facilities).
38 Transportation Plant Leased to Others
(1) This account shall include the cost of transportation plant owned but leased to others as operating units or systems, where the lessee has exclusive possession.
(2) The balance in this account shall be classified according to Schedule II.
39 Transportation Plant Under Construction
(1) This account shall include the cost of construction of transportation plant not yet placed in service, including:
(a) the cost of land acquired for such construction;
(b) unapplied construction material and supplies;
(c) taxes during construction; and
(d) any other elements of construction cost.
(2) When any plant, the cost of construction of which has been included in this account, is placed in service, the cost of construction shall be credited to this account and debited to the appropriate descriptive plant accounts or to plant account 191 (Unclassified Plant in Service).
40 Accumulated Amortization — Other Plant
(1) Where there is a change from depreciation accounting to amortization accounting, the applicable balance in account 35 (Accumulated Depreciation — Other Plant) shall be transferred to this account.
(2) At the time of retirement of amortizable other plant, this account shall be credited with amounts recovered from salvage, including insurance proceeds and debited with
(a) the book cost of the plant retired; and
(b) the costs of removal, demolition or dismantling of the plant retired.
Deferred Debits
41 Unamortized Debt Discount and Expenses
(1) This account shall include the total of the debit balances in the subaccounts maintained for each series of each class of long term debt in accordance with section 71.
(2) The amounts recorded in this account shall be amortized in accordance with sections 72 or 73, as applicable.
42 Organization Expenses
(1) This account shall include
(a) all fees paid to governments for the privilege of incorporation;
(b) legal fees in respect of the incorporation of the company; and
(c) any expenditures incidental to organizing a company.
(2) Amounts recorded in this account shall be amortized or otherwise disposed of by a company in such manner as the Commission may approve or direct.
43 Public Improvements
(1) This account shall include
(a) the deferred portion of assessments by governmental authority (by mutual consent or otherwise) to cover the cost of constructing public improvements, where a company has elected to make payment by lump sum and not by instalments over a number of years; and
(b) the cost borne by a company of public improvements constructed by it under governmental requirements.
(2) Any amount that is no longer deferred shall be debited to account 630-16 or 730-16 (Taxes Other than Income Taxes), as applicable.
(3) Where, in any year, public improvements individually and in the aggregate are not material, they may, at the option of the company, be debited to account 630-16 or 730-16 (Taxes Other than Income Taxes), as applicable.
(4) The following is a representative list of items of public improvements to be included in the account: (See Regulations, section 14)
(a) cost of land outside a company’s right-of-way to provide for the relocation of street or highway;
(b) curbing street and highway;
(c) damage to property of others when incidental to highway construction;
(d) drainage system;
(e) engineering — when such costs apply to items chargeable to this account;
(f) flood protection;
(g) grading street and highway;
(h) guttering street and highway;
(i) irrigation system;
(j) levee;
(k) paving street and highway;
(l) sewer system;
(m) sidewalk;
(n) street lighting system; and
(o) water works.
44 Preliminary Survey and Investigation Costs
(1) This account shall be debited with
(a) all expenditures for preliminary surveys, plans, investigations and similar items made for the purpose of determining the feasibility of projects for oil pipeline service;
(b) the costs associated with applications for Certificates of Public Convenience and Necessity and Commission hearings; and
(c) the cost in respect of the acquisition of options to purchase land, land rights, easements and similar items for use in projects that are contemplated.
(2) Where, as a result of the expenditures referred to in subsection (1), plant is acquired or constructed, this account shall be credited and the appropriate accounts debited with the costs related to that plant.
(3) Where a project referred to in subsection (1) is not proceeded with, the costs included in this account shall be transferred to account 420 (Other Income Deductions), unless the amount is material, in which case the company shall inform the Regulator and, unless otherwise directed by the Commission, shall debit the amount to account 422 (Extraordinary Income Deductions).
(4) Records supporting entries in this account shall be maintained in a manner that will enable complete information to be available as to the nature and purpose of the expenditures.
45 Other Deferred Debits
This account shall include
(a) expenditures that cannot be disposed of until further information is received;
(b) undistributed balances in clearing accounts; and
(c) items of a deferred nature, not provided for in other accounts under the Regulations, that are to be amortized over future periods.
Liabilities
Current Liabilities
50 Loans and Notes Payable
(1) This account shall include any balances representing the company’s outstanding obligations in the form of loans, notes or other similar evidences of indebtedness that are payable on demand or within one year from the date of the balance sheet.
(2) This account shall be maintained in such form as to show separately the amounts of indebtedness secured by collateral.
51 Joint Revenue Payable
This account shall include the revenue from transportation of oil and oil products that is payable to other parties under a joint tariff, other than revenue recorded in account 53 (Accounts Payable — Affiliated Companies).
52 Accounts Payable and Accrued
(1) This account shall include
(a) the amount of vouchers and payrolls or accounts unpaid on the date of the balance sheet;
(b) outstanding drafts drawn by agents;
(c) unpaid rents under leases or agreements;
(d) taxes collected from employees and others for the account of taxing agencies; and
(e) other items of the nature of demand liabilities not included in account 50 (Loans and Notes Payable), account 51 (Joint Revenue Payable), account 53 (Accounts Payable — Affiliated Companies), account 54 (Interest Payable and Accrued) or account 60 (Other Current Liabilities).
(2) This account shall also include a company’s estimated accrued liabilities with respect to accounts payable. (See Regulations, sections 77 and 78).
(3) A company’s estimates of liabilities for injuries to persons and for loss and damage claims shall not be included in this account but shall be credited to account 60 (Other Current Liabilities) or account 78 (Other Deferred Credits), as applicable.
53 Accounts Payable — Affiliated Companies
This account shall include
(a) notes,
(b) advances,
(c) credit balances in open accounts,
(d) long term debt due within one year,
(e) joint revenue payable,
(f) interest on any matter referred to in paragraphs (a) to (e),
(g) dividends, and
(h) miscellaneous amounts
owed to an affiliated company and subject to settlement within one year from the date of the balance sheet.
54 Interest Payable and Accrued
This account shall be credited with interest, other than interest payable to affiliated companies, due or accrued on
(a) notes payable;
(b) bank overdrafts and loans; and
(c) long term debt and other obligations.
55 Dividends Payable
This account shall include dividends declared on capital stock and not yet paid by a company, other than dividends payable to affiliated companies and recorded in account 53.
56 Taxes Accrued
(1) This account shall be credited with the accruals of all taxes that are payable to federal, provincial, or other governmental authorities.
(2) The accruals referred to in subsection (1) may be based upon estimates, provided that the estimates are adjusted to reflect in this account at all times a company’s estimate of its unpaid liability for each of the several classes of taxes that has not been finally settled.
(3) All tax payments for which accruals have been made shall be debited to this account.
(4) The records supporting the entries in this account shall be kept to show separately, by classes of taxes, the amount of the tax accruals for the current year and the adjustments of accruals for prior years.
57 Long Term Debt Due Within One Year
This account shall include
(a) the amount of long term debt and any premiums thereon that become payable within one year from the date of the balance sheet,
(b) the amount of matured and unpaid long term debt and any premiums thereon for which there has been no specific agreement for extension of the time of payment, and
(c) the amount of long term debt called for redemption but not presented to the company or its agents for payment,
other than the portion of any liability to be recorded in account 53 (Accounts Payable — Affiliated Companies).
60 Other Current Liabilities
This account shall include
(a) contractors’ holdbacks and all other current liabilities not provided for in other accounts under the Regulations; and
(b) the company’s estimate of current liabilities in respect of
(i) injuries to persons, and
(ii) loss and damage claims.
Deferred Credits and Appropriations
70 Welfare and Pension Appropriations
(1) This account shall include
(a) the credit balances that represent the liability of the company for any amount contributed by employees and by the company, through debits to expenses or other accounts approved for the purpose by the Commission, for
(i) pensions,
(ii) accidents and death benefits,
(iii) savings,
(iv) relief, and
(v) hospital, or other provident purposes,
whether or not a special fund has been established to meet such liabilities. (See Regulations, section 62 and account 23 (Miscellaneous Special Funds)); and
(b) the credit balances representing the liability of the company for amounts provided by debits to expenses in respect of deferred compensation payments under an employees’ profit sharing plan.
(2) Separate subaccounts shall be maintained for each kind of appropriation created pursuant to subsection (1).
(3) Disbursements shall be debited to this account and any excess of the disbursements over the amounts appropriated shall be transferred to account 630-13 or 730-13 (Employee Benefits) or to account 630-11 or 730-11 (Injuries to Persons and Property Damage), as applicable.
(4) Current amounts payable relative to funded welfare, pension and other plans with insurance companies or trustees shall be transferred to account 52 (Accounts Payable and Accrued).
71 Accumulated Tax Reductions Applicable to Future Years
(1) Where a company does not follow the taxes payable or flow-through basis of accounting for income taxes, this account shall include the amount by which a company’s provision for income taxes for a particular year differs from the amount of income taxes payable for that year.
(2) Where a company does not follow the method of accounting for accumulated tax reductions applicable to future years, the company shall show the amount of its accumulated tax reductions in its annual financial report to Statistics Canada pursuant to the Statistics Act.
72 Insurance Appropriations
(1) This account shall include the credit balances that represent insurance appropriations concurrently debited to expenses to cover self-insurance against losses through accident, fire, flood, burglary or other hazards and re-insurance recoveries from insurance companies. (See Regulations, sections 61 and 62).
(2) To the extent that a loss or damage sustained is covered by this account, the amount of that loss or damage shall be debited to this account.
(3) Separate subaccounts shall be maintained for each kind of insurance reserve created.
73 Maintenance Expense Equalization
This account shall include the differences between actual and budgeted monthly maintenance expenses. (See Regulations, section 47).
74 Allowance for Loss in Value of Investments
(1) This account shall include all the credit balances maintained by a company where the credit balances represent reductions in the gross book value of investments carried in account 20 (Investments in Affiliated Companies) and account 21 (Other Investments). (See account 415 (Provision for Loss in Valuation of Investments)).
(2) Debits to this account that represent reductions in the allowance for loss in value of investments carried in accounts 20 or 21 shall be made only after approval of the Commission. (See account 404 (Investment Valuation Adjustment)).
75 Allowance For Doubtful Accounts
(1) This account shall include the total of the balances maintained by a company for the purpose of providing for reductions in the value of current assets recorded in
(a) account 4 (Accounts Receivable — Trade),
(b) account 5 (Accounts Receivable — Other),
(c) account 6 (Accounts Receivable — Affiliated Companies), or
(d) account 12 (Other Current Assets),
and the corresponding debits shall be made to accounts 630-15 or 730-15 (Bad Debts), as applicable.
(2) Collections on accounts that were previously debited to this account shall be credited to this account.
76 Unamortized Premium On Long Term Debt
(1) This account shall include the unamortized premiums received from the issuance of long term debt and shall include the total of the credit balances in the subaccounts maintained for each series of each class of long term debt. (See Regulations, section 71).
(2) The amounts recorded in this account shall be amortized in accordance with sections 72 or 73 of the Regulations, as applicable.
78 Other Deferred Credits
This account shall include
(a) credit items that cannot be disposed of until further information is received;
(b) undistributed balances in clearing accounts; and
(c) credit items of a deferred nature, not provided for in other accounts under the Regulations, that are to be amortized over future periods.
Long Term Liabilities
80 Long Term Debt
(1) This account shall include
(a) the total par value of unmatured debt maturing more than one year from the date of the balance sheet, where the debt is issued and not retired or cancelled; and
(b) the total par value of any unmatured debt similar to the debt referred to in paragraph (a) of any other company, the payment of which has been assumed by the company.
(2) The amounts in this account shall be divided to show the par value of
(a) certificates or other evidences of long term debt, pledged and unpledged, held in the company’s treasury, by its agents or trustees, or otherwise subject to the company’s control; and
(b) certificates or other evidences of long term debt issued and outstanding, and not held by the company, its agents or trustees, or subject to the company’s control.
(3) The amounts included in this account shall be further divided to show the amount of each of the following classes of long term debt:
(a) mortgage bonds — bonds that are secured by lien on physical property and not included in any other subdivisions of this account;
(b) collateral trust bonds — bonds and notes that are secured by a lien on securities or other negotiable paper and stock trust certificates that are similar in character to collateral trust bonds;
(c) income bonds — bonds that are a lien on a company’s revenue alone, or bonds that, while being a lien on the company’s property and franchises, provide for payment of interest only if the interest is earned;
(d) convertible bonds — bonds that may be converted into capital stock of the company according to the agreement under which they are issued; and
(e) miscellaneous obligations — all other long term obligations that mature more than one year from the date of the balance sheet.
(4) Each of the classes listed in subsection (3) shall be divided into subclasses according to
(a) differences in security given therefor;
(b) rates of interest;
(c) interest dates; and
(d) dates of maturity.
(5) Long term debt securities are considered to be issued when they have been sold to a bona fide purchaser for valuable consideration and the purchaser holds them free from all control by the accounting company.
(6) All long term debt securities that are issued, not reacquired and are held by or for the company are considered to be outstanding.
(7) Long term debt that is to be repaid in a foreign currency shall be included in this account in accordance with generally accepted accounting practice.
85 Advances from Affiliated Companies
(1) This account shall include
(a) the par value of bonds, debentures, and long term notes payable,
(b) the par value of non-negotiable notes,
(c) the par value of matured long term bonds, debentures or notes payable where,
(i) the bonds, debentures or notes of the company are held by an affiliated company,
(ii) there is no agreement for an extension as to time of payment, and
(iii) the collection of the principal is not enforced,
(d) credit balances in open accounts with affiliated companies, other than credit balances in current accounts, and
(e) interest accrued on any matter referred to in paragraphs (a) to (d)
owed to an affiliated company and not subject to settlement within one year from the date of the balance sheet.
(2) Separate subaccounts shall be kept for each of the items listed in subsection (1). (See Regulations, section 80).
86 Other Long Term Debt
This account shall include amounts payable more than one year from the date of the balance sheet if such amounts have not been provided for elsewhere and loans payable authorized by subsection 76(2) of the Regulations.
Capital Stock and Surplus
90 Capital Stock
(1) This account shall include
(a) the total par value of par value stock, and
(b) the total amount received from the issuance of stock without par value, excluding amounts that have been properly allocated to account 91 (Contributed Surplus),
if the stock has been issued to bona fide purchasers and has not been reacquired and cancelled, and
(c) appropriations of retained earnings that have been transferred to this account.
(2) Premiums received from the issue of par value stock shall be credited to account 91 (Contributed Surplus).
(3) Where capital stock is reduced or cancelled, this account shall be debited with the appropriate amount applicable to the particular series or class of stock involved.
(4) Where capital stock having par value is exchanged for capital stock without par value, any amounts with respect thereto in account 91 (Contributed Surplus) shall be transferred to this account.
(5) This account shall be subdivided in a manner that shows the total amount credited to this account with respect to each series or class of stock issued and outstanding and carrying different conditions.
(6) An appropriate record shall be maintained showing the number of shares issued and outstanding for each series or class referred to in subsection (5).
91 Contributed Surplus
(1) This account shall include
(a) surplus arising from transactions relating to the company’s share capital; and
(b) capital contributions and donations from government and other sources.
(2) The following is a representative list of items of contributed surplus to be included in this account: (See Regulations, section 14)
(a) premiums received on the issue of par value shares;
(b) proceeds from the sale of donated shares;
(c) credits resulting from redemption or conversion of shares at less than the amount recorded as share capital;
(d) other contributions made by shareholders in excess of par or stated value of shares;
(e) the portion of the proceeds from the issue of no par value shares that has been properly allocated to this account; and
(f) capital contributions in the form of subsidies, building sites and other such contributions.
92 Retained Earnings
This account shall include the balance, debit or credit, of the amounts included in the Retained Earnings accounts listed in Schedule III.
93 Excess of Appraised Value of Fixed Assets Over Depreciated Cost
(1) This account shall be credited with the increase in value of fixed assets of the company as a result of an appraisal, where the appraisal is associated with
(a) an actual purchase and sale of fixed assets as in the acquisition of an affiliated company;
(b) a reorganization of the accounting company; or
(c) a substantial issue of securities, whether equity shares or otherwise.
(2) The crediting of this account in the manner referred to in subsection (1) and the disposition of any amounts included therein shall be subject to the prior approval of the Commission.
SCHEDULE II(ss. 2, 6 and 8 and ss. 30, 36 and 38 of Sch. I)
INDEX OF ACCOUNTS
Plant Accounts
| Gathering Lines | Trunk Lines | General | |
|---|---|---|---|
| 101 | 151 | 171 | Land |
| 102 | 152 | Land rights | |
| 103 | 153 | Pipelines | |
| 106 | 156 | 176 | Buildings |
| 108 | 158 | Pumping equipment | |
| 109 | 159 | Station oil lines | |
| 110 | 160 | Other station equipment | |
| 111 | 161 | Oil tanks | |
| 112 | 162 | Receiving and delivery facilities | |
| 113 | 163 | 183 | Communication systems |
| 184 | Office furniture and equipment | ||
| 185 | Vehicles and other work equipment | ||
| 186 | Miscellaneous plant | ||
| 187 | Aircraft | ||
| 188 | Joint plant | ||
| 189 | Allowance for Funds Used During Construction | ||
| 190 | Overhead during construction | ||
| 191 | Unclassified plant in service |
Text Pertaining to Plant Accounts
General
1 The total of the balances in the plant accounts shall equal the total of the balances in balance sheet accounts 30 (Transportation Plant) and 38 (Transportation Plant Leased to Others).
2 Where the same account title is used for more than one group of plant accounts, the account text instructions are given in detail only for the accounts under the gathering lines group, except in the case of account 153 (Pipelines).
Gathering Lines
101 Land
(1) This account shall include
(a) the cost of land owned in fee simple and used for the construction and operation of pipelines; and
(b) the cost of removing the property of others from the land and relocating the property.
(2) The cost of land not used in transportation service or for which there is no definite plan for use in pipeline operations, shall be debited to account 34 (Other Plant).
(3) Net proceeds from the sale of timber, minerals or improvements that were part of the land cost shall be credited to this account.
(4) Subject to the approval of the Commission, a company shall credit the amount of any excess of net proceeds referred to in subsection (3) over the original cost of the timber, minerals or improvements included in land cost to account 402 (Extraordinary Income) unless the amount of the excess is not material, in which case the company shall credit that amount to account 410 (Other Income).
(5) The following is a representative list of items of land to be included in the account: (See Regulations, section 14)
(a) abstract;
(b) appraisal;
(c) arbitrator in expropriation cases;
(d) commissions paid to others;
(e) compensation and expenses of outside land agents if specifically assigned to acquisition of land except arbitrary apportionments for incidental services;
(f) cost of clearing, filling and levelling submerged or low land;
(g) compensation for damages to property of others;
(h) cost of a ditch for waterway when it is part of consideration for purchase;
(i) engineering and survey expenses in connection with the purchase of land in fee-simple;
(j) expropriation expenses, including court costs and special counsel fees;
(k) judgments and decreed costs to clear or defend titles;
(l) legal and notarial fees;
(m) plats;
(n) premiums on expropriation bonds;
(o) cost of registering, filing and depositing title documents and plans;
(p) payments for release and discharge of encumbrances and charges against the land;
(q) payments for release from restrictive provisions of original title documents and for other rights;
(r) removal and relocation of buildings and other structures on the land that are not purchased;
(s) rent of land where it is part of the consideration for purchase; and
(t) taxes accrued on the land and assumed at time of purchase.
102 Land Rights
(1) This account shall include amounts paid for registered land rights or easements and the costs incurred in connection with obtaining the land rights.
(2) Temporary land rights or easements used for construction purposes only and the cost of clearing, levelling or grading land for which the company has acquired land rights both before and after the construction of facilities thereon shall be included in the plant account provided for the facilities constructed.
(3) A company shall credit to this account the net proceeds from the sale of timber, minerals or improvements that were part of the cost of land rights.
(4) Subject to the approval of the Commission, a company shall credit the amount of any excess of net proceeds referred to in subsection (3) over the original cost of the timber, minerals or improvements included in the cost of land rights to account 402 (Extraordinary Income) unless the amount of the excess is not material, in which case the company shall credit that amount to account 410 (Other Income).
(5) The following is a representative list of items of land rights to be included in the account: (See Regulations, section 14)
(a) abstract expenses;
(b) engineering and survey expenses;
(c) expropriation expenses;
(d) fees and costs of registering, filing and depositing title documents and plans;
(e) judgments and decreed costs of clearing or defending titles;
(f) legal and notarial fees;
(g) outside land right agents’ compensation;
(h) plats;
(i) premiums on expropriation bonds;
(j) payments for release and discharge of encumbrances and charges against the land affected by the land rights;
(k) payments for tenants’ consents, options and easements; and
(l) servitudes.
103 Pipelines
(1) This account shall include the cost of installed line pipe and line pipe fittings laid in the construction of gathering lines and shall be maintained to show separately the costs of line pipe, line pipe fittings and pipeline construction.
(2) The following is a representative list of pipeline fittings to be included in the account: (See Regulations, section 14)
(a) flange;
(b) scraper trap; and
(c) valve.
(3) The following is a representative list of items of work and material to be included in the account: (See Regulations, section 14)
(a) Labour and Equipment
(i) backfilling,
(ii) cleaning up rights-of-way,
(iii) clearing rights-of-way,
(iv) construction damage,
(v) ditching,
(vi) engineering and surveying,
(vii) hauling and stringing,
(viii) inspection and testing,
(ix) installing line pipe fittings,
(x) laying,
(xi) superintendence,
(xii) treating, and
(xiii) welding; and
(b) Material
(i) barrier,
(ii) bent,
(iii) bridge, road, fence and gate when essential to pipeline construction,
(iv) casting pipe,
(v) cathodic protection system,
(vi) clamp and sleeve,
(vii) cattleguard,
(viii) culvert,
(ix) insulator,
(x) pole,
(xi) protective coating,
(xii) river weight,
(xiii) rock shield,
(xiv) slab,
(xv) support and cable,
(xvi) vent line, and
(xvii) wire.
106 Buildings
(1) This account shall include the cost of buildings, including foundations and other components such as heating, lighting, plumbing, air conditioning and sprinkler systems.
(2) The following is a representative list of items of buildings to be included in the account: (See Regulations, section 14)
(a) air strip;
(b) clearing and landscaping building area;
(c) fencing;
(d) loading platform;
(e) sewage system;
(f) road and parking area;
(g) boiler;
(h) cistern;
(i) incinerator; and
(j) pipe rack.
108 Pumping Equipment
(1) This account shall include the cost of engines, motors, pumps and all other pumping equipment required in the transportation of oil, including installation costs and the cost of any special foundations.
(2) The following is a representative list of items of pumping equipment to be included in the account: (See Regulations, section 14)
(a) air compressor;
(b) air cooling system;
(c) air intake and exhaust system;
(d) air starting system;
(e) booster pump;
(f) engine cooling system;
(g) engine and motor;
(h) exhaust silencer;
(i) fuel oil system;
(j) fuel and water storage tank;
(k) heat exchanger;
(l) generator;
(m) lube oil system;
(n) pump;
(o) seal oil system;
(p) speed controller; and
(q) speed increaser.
109 Station Oil Lines
This account shall include the incoming and outgoing station gate valves at each station and the pipelines, fittings, manifolds and tank lines between those valves.
110 Other Station Equipment
(1) This account shall include the cost of all station equipment not provided for in other accounts under the Regulations.
(2) The following is a representative list of items of other station equipment to be included in the account: (See Regulations, section 14)
(a) calibration tank;
(b) compensator;
(c) electrical system;
(d) electrical equipment and control;
(e) firefighting equipment;
(f) fuel and lubricating oil tank;
(g) gasoline system;
(h) metering equipment complete with strainer and filter;
(i) oil sump system;
(j) oil trap;
(k) oil treating plant;
(l) outside power line and lighting facilities;
(m) permanent water right;
(n) reservoir;
(o) safety device;
(p) service line;
(q) siding and spur track for station use;
(r) skimmer;
(s) station tools and equipment;
(t) station instrument control;
(u) steam system;
(v) substation;
(w) utility and instrument air system; and
(x) water system, storage tank and tower structure.
111 Oil Tanks
(1) This account shall include the cost of tanks used for the storage of crude or product oil and other appurtenances necessary to equip the tanks for such storage.
(2) The following is a representative list of items of oil tanks to be included in the account: (See Regulations, section 14)
(a) ammonia injection system;
(b) catwalk;
(c) cathodic protection system;
(d) fire protection equipment attached to the tank;
(e) fire wall;
(f) grade;
(g) inlet valve;
(h) oil tank;
(i) outlet valve;
(j) roof;
(k) steam coil;
(l) swing pipe; and
(m) tank gauge system.
112 Receiving and Delivery Facilities
(1) This account shall include the cost of facilities for receiving or delivering oil and oil products to or from vessels, railroad cars and trucks.
(2) The following is a representative list of items of receiving and delivery facilities to be included in the account: (See Regulations, section 14)
(a) automatic sampler;
(a.1) barge;
(b) ballast system;
(b.1) breakwater;
(c) calibration tank;
(c.1) cargo hose;
(d) cofferdam;
(e) crane;
(f) crib;
(g) delivery rack;
(h) derrick;
(i) dock;
(j) dock structure;
(k) engine and pump at loading rack and on wharf;
(l) grading and site preparation;
(m) gravitometer;
(n) loading platform;
(o) metering equipment complete with strainer and filter;
(p) oil tank at dock;
(q) oil line pipe and fittings used in connection with receiving and delivery facilities;
(r) pier;
(s) pumping equipment;
(t) pumphouse;
(u) rail track used in connection with receiving and delivery facilities;
(v) seawall;
(w) slip including piling;
(x) tanker;
(y) wharf; and
(z) winch.
113 Communication Systems
(1) This account shall include the cost of telephone, telegraph, radio, radar and other communication structures and equipment used wholly or predominantly in oil transportation operations.
(2) The following is a representative list of items of communication systems to be included in the account: (See Regulations, section 14)
(a) Telephone and Telegraph Equipment
(i) aerial attachment,
(ii) battery,
(iii) brace,
(iv) bracket,
(v) cable and wire,
(vi) cable box and appurtenance,
(vii) conduit and appurtenance,
(viii) connecting wire,
(ix) current controlling instrument,
(x) cross arm and cross arm bolt,
(xi) electric generator and motor,
(xii) electric meter,
(xiii) fuse and mechanical protector,
(xiv) guy stub and anchor,
(xv) guy rod and wire,
(xvi) insulator and pin,
(xvii) rectifier,
(xviii) rheostat,
(xix) pole,
(xx) sending and receiving instrument,
(xxi) stationary engine,
(xxii) submarine cable and connection,
(xxiii) switchboard,
(xxiv) telephone pole box,
(xxv) testing outfit,
(xxvi) tower,
(xxvii) transformer, and
(xxviii) underground cable and connection; and
(b) Radio and Radar Equipment
(i) aerial or antenna and attachments,
(ii) control unit,
(iii) power generating, converting or supply equipment,
(iv) radar console and associated equipment,
(v) radio tower,
(vi) specialized testing and repair equipment, and
(vii) transmitter and receiver, including mobile unit.
Trunk Lines
151 Land
For the text of this account, see account 101.
152 Land Rights
For the text of this account, see account 102.
153 Pipelines
(1) This account shall include the costs of line pipe, line pipe fittings and labour incurred in the construction of trunk lines, including the costs of scraper traps, main line valves and other trunk line facilities between stations.
(2) This account shall be maintained to show separately the costs of line pipe, line pipe fittings and pipeline construction, respectively.
(3) The representative list of items of pipeline fittings and work and material to be included is the same as the list set out for account 103: (See Regulations, section 14).
156 Buildings
For the text of this account, see account 106.
158 Pumping Equipment
For the text of this account, see account 108.
159 Station Oil Lines
For the text of this account, see account 109.
160 Other Station Equipment
For the text of this account, see account 110.
161 Oil Tanks
For the text of this account, see account 111.
162 Receiving and Delivery Facilities
For the text of this account, see account 112.
163 Communications Systems
For the text of this account, see account 113.
General
171 Land
For the text of this account, see account 101.
176 Buildings
For the text of this account, see account 106.
183 Communication Systems
For the text of this account, see account 113.
184 Office Furniture and Equipment
(1) This account shall include the cost of office equipment, furniture and fixtures that are not built in or permanently attached to buildings.
(2) The following is a representative list of items of office furniture and equipment to be included in the account: (See Regulations, section 14)
(a) accounting machine;
(a.1) adding machine;
(b) air conditioner;
(c) calculating machine;
(d) carpet;
(e) chair;
(f) clock;
(g) comptometer;
(h) desk;
(i) dictating machine;
(j) duplicating machine;
(k) filing cabinet;
(l) fire extinguisher;
(m) humidifier;
(n) I.B.M. panel;
(o) integrator;
(p) lamp;
(q) library;
(r) locker;
(s) photographic equipment;
(t) projection equipment;
(u) rug;
(v) safe;
(w) space heater;
(x) table;
(y) typewriter; and
(z) water cooler.
185 Vehicles and Other Work Equipment
(1) This account shall include the cost of
(a) motor and other vehicles,
(b) motor and other portable work equipment,
(c) garage equipment, and
(d) portable tools,
not specifically provided for in other accounts under the Regulations.
(2) The following is a representative list of vehicles and other work equipment to be included in the account: (See Regulations, section 14)
(a) air compressor;
(b) automobile;
(c) compressed air tool;
(d) concrete mixer and breaker;
(e) derrick;
(f) ditching machine;
(g) drill and hammer;
(h) gasoline and oil pump, portable;
(i) grading machine;
(j) hand truck;
(k) hydraulic outfit;
(l) laying tongs;
(m) motor boat and barge;
(n) motorcycle;
(o) motor and generator;
(p) pipe cleaning machine;
(q) power mower;
(r) power shovel;
(s) pump tamping and back filling machine;
(t) tractor;
(u) truck and truck trailer;
(v) valve reseating machine;
(w) welding machine; and
(x) winch.
186 Miscellaneous Plant
This account shall include the cost of plant used in pipeline operations where such plant is not provided for in other accounts under the Regulations.
187 Aircraft
This account shall include the cost of aircraft and navigational and other flying equipment attached to or used to equip aircraft.
188 Joint Plant
(1) This account shall include a company’s contribution towards the cost of construction of a project involving joint use of facilities by the company and others, where title to the project is not held by the company.
(2) Where title to a project involving joint use of facilities is held by a company, the company’s contribution to the cost shall be included in the applicable plant account.
(3) Notwithstanding subsections (1) and (2), plant that is held in undivided interest shall be included in the appropriate plant accounts.
189 Allowance for Funds Used During Construction
(1) A company shall not, without the approval of the Commission, charge an allowance for funds used during construction (in this section referred to as an “allowance”).
(2) The rate used to determine the amount of an allowance shall be based on a reasonable allowance for the use of funds expended during the construction period, whether or not such funds have been borrowed.
(3) Where an allowance is capitalized, the relevant amounts shall be debited to this account and concurrently credited to account 410.1 (Allowance for Funds Used During Construction (Credit)).
(4) An allowance capitalized prior to the coming into force of these Regulations shall be included in this account, except where it has been prorated over the appropriate plant accounts.
(5) A company may, at its option, close out this account by prorating the allowance to the plant accounts (see section 27 of these Regulations).
190 Overhead During Construction
(1) This account shall include that portion of a company’s overhead expense attributable to the acquisition of plant and that portion shall be calculated on the basis of actual costs equitably allocated to each job or unit.
(2) The company may, at its option, close out this account by prorating the amounts recorded therein to the appropriate plant accounts: (See Regulations, section 26).
191 Unclassified Plant in Service
This account shall include the cost of transportation plant pending analysis and distribution to the appropriate plant accounts.
- SOR/86-999, s. 23
- SOR/2020-50, s. 5
SCHEDULE III(ss. 6 and 9 and s. 92 of Sch. I)
Index of Accounts
Retained Earnings Accounts
302 Balance transferred from income
303 Prior period adjustments
304 Miscellaneous retained earnings adjustments
315 Dividend appropriations
318 Income tax applicable to retained earnings adjustments
Text Pertaining to Retained Earnings Accounts
General
The balances in all retained earnings accounts shall be closed to balance sheet account 92 (Retained Earnings) at the end of each fiscal year.
302 Balance Transferred from Income
This account shall show the debit or credit balance brought forward from the income accounts for the fiscal year.
303 Prior Period Adjustments
(1) Unless otherwise directed by the Commission in a particular case, a company shall include in this account all material adjustments to the income of prior fiscal years where such adjustments meet the requirements of subsection 78(1) of the Regulations.
(2) The following is a representative list of items of prior period adjustments to be included in the account: (See Regulations, section 14)
(a) adjustment or settlement of income taxes; and
(b) adjustment or settlement of claims resulting from litigation.
304 Miscellaneous Retained Earnings Adjustments
(1) This account shall include adjustments to retained earnings not provided for elsewhere.
(2) A company shall not use this account without obtaining the prior approval of the Commission.
315 Dividend Appropriations
(1) This account shall include the amount of dividends declared during the fiscal year on all classes of outstanding capital stock.
(2) Subsidiary records shall be maintained showing separately the dividends declared on each type and class of capital stock.
(3) Where dividends are paid in other than money, complete details of each transaction shall be maintained.
(4) Dividends declared out of contributed surplus shall be debited to account 91 (Contributed Surplus).
318 Income Tax Applicable to Retained Earnings Adjustments
This account shall include the estimated federal, provincial or other government income taxes (debit or credit) assignable to the aggregate of items of both taxable income and deductions from taxable income that, for accounting purposes, are recorded in retained earnings accounts.
SCHEDULE IV(ss. 6 and 10)
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.
- SOR/86-999, s. 24
- SOR/2020-50, s. 5
SCHEDULE V(ss. 6 and 11)
INDEX OF ACCOUNTS
Operating Revenue Accounts
| Gathering Lines | Trunk Lines | |
|---|---|---|
| 501 | 551 | Transportation revenue |
| 502 | 552 | Storage and demurrage revenue |
| 503 | 553 | Rent revenue |
| 504 | 554 | Miscellaneous operating revenue |
| 505 | 555 | Allowance oil revenue |
| 506 | 556 | Receiving and delivery revenue |
Text Pertaining to Operating Revenue Accounts
General
1 The total of the balances in the operating revenue accounts shall equal the balance in account 401 (Operating Revenue).
2 The following account text instructions are given in detail only for the accounts in the gathering lines group.
Gathering Lines
501 Transportation Revenue
This account shall include revenue from the transportation of oil and oil products.
502 Storage and Demurrage Revenue
This account shall include revenue obtained from the storage of oil on the basis of tariff charges and demurrage charges incident to the failure of consignees to receive shipments promptly.
503 Rent Revenue
This account shall include rent revenues from the use by others of assets included in account 30 (Transportation Plant) and in account 38 (Transportation Plant Leased to Others).
504 Miscellaneous Operating Revenue
This account shall include miscellaneous operating revenue not provided for in other accounts under the Regulations.
505 Allowance Oil Revenue
This account shall include revenue earned as a result of the company’s tariff relating to oil allowances covering loss due to shrinkage and other causes: (See Regulations, section 81).
506 Receiving and Delivery Revenue
This account shall include revenue earned on the basis of tariff charges for receiving, delivering, unloading and loading at the company’s receiving and delivery facilities.
Trunk Lines
551 Transportation Revenue
For the text of this account, see account 501.
552 Storage and Demurrage Revenue
For the text of this account, see account 502.
553 Rent Revenue
For the text of this account, see account 503.
554 Miscellaneous Operating Revenue
For the text of this account, see account 504.
555 Allowance Oil Revenue
For the text of this account, see account 505.
556 Receiving and Delivery Revenue
For the text of this account, see account 506.
SCHEDULE VI(ss. 6, 12 and 46)
INDEX OF ACCOUNTS
Operating Expense Accounts
| Gathering Lines | Trunk Lines | |
|---|---|---|
| 610 | 710 | Maintenance |
| 610-1 | 710-1 | Salaries and wages |
| 610-3 | 710-3 | Materials and supplies |
| 610-4 | 710-4 | Outside services |
| 610-5 | 710-5 | Other expenses |
| 610-7 | 710-7 | Equalization — plant |
| 620 | 720 | Transportation |
| 620-1 | 720-1 | Salaries and wages |
| 620-2 | 720-2 | Operating fuel and power |
| 620-3 | 720-3 | Materials and supplies |
| 620-4 | 720-4 | Outside services |
| 620-5 | 720-5 | Other expenses |
| 620-8 | 720-8 | Oil loss |
| 630 | 730 | General |
| 630-1 | 730-1 | Salaries and wages |
| 630-3 | 730-3 | Materials and supplies |
| 630-4 | 730-4 | Outside services |
| 630-5 | 730-5 | Other expenses |
| 630-9 | 730-9 | Law expenses |
| 630-10 | 730-10 | Rent |
| 630-11 | 730-11 | Injuries to persons and property damage |
| 630-13 | 730-13 | Employee benefits |
| 630-14 | 730-14 | Insurance |
| 630-15 | 730-15 | Bad debts |
| 630-16 | 730-16 | Taxes other than income taxes |
Text Pertaining to Operating Expense Accounts
General
1 The total of the balances in the operating expense accounts shall equal the balance in income account 411 (Operating Expenses).
2 The following account text instructions are given in detail only for the accounts in the gathering lines group.
Gathering Lines
610 Maintenance
This account shall include the total of the balances recorded in accounts 610-1 to 610-7.
610-1 Salaries and Wages
This account shall include the salaries and wages, including holiday and sick leave pay, for personnel directly engaged in the maintenance of transportation plant.
610-3 Materials and Supplies
(1) This account shall include the cost of materials and supplies used in the maintenance of transportation plant.
(2) The salvage value of materials recovered in maintenance work shall be credited to this account.
610-4 Outside Services
(1) This account shall include the cost of maintenance services provided by persons other than company employees, under contract, agreement or other arrangement.
(2) The cost of services performed by affiliated companies shall be segregated within this account.
610-5 Other Expenses
This account shall include maintenance expenses not provided for in other accounts under the Regulations.
610-7 Equalization — Plant
This account shall include the difference between actual and budgeted maintenance expenses: (See Regulations, section 47).
620 Transportation
This account shall include the total of the balances recorded in accounts 620-1 to 620-8.
620-1 Salaries and Wages
This account shall include the salaries and wages, including holiday and sick leave pay, for employees of the company directly engaged in transportation operations.
620-2 Operating Fuel and Power
This account shall include
(a) the cost of fuel and power consumed in operations; and
(b) the cost of normal utilities services where the cost is directly attributable to operations.
620-3 Materials and Supplies
This account shall include the cost of materials and supplies consumed in transportation operations.
620-4 Outside Services
(1) This account shall include the cost of transportation services provided by persons other than company employees, under contract, agreement or other arrangement.
(2) The cost of services performed by affiliated companies shall be segregated within this account.
620-5 Other Expenses
This account shall include transportation expenses not provided for in other accounts under the Regulations.
620-8 Oil Loss
This account shall include
(a) the value of oil and oil products lost in the course of transportation or during storage;
(b) gain or loss on sale of oil that is recorded in account 9 (Oil Inventory) or account 33 (Operating Oil Supply); and
(c) the net debits, if any, at balance sheet date in account 505 or 555 (Allowance Oil Revenue): (See Regulations, sections 81 and 82).
630 General
This account shall include the total of the balances recorded in accounts 630-1 to 630-16.
630-1 Salaries and Wages
This account shall include the salaries and wages, including holiday and sick leave pay, for executives, general officers, general office personnel and other employees whose salaries and wages cannot be directly allocated to maintenance or transportation accounts.
630-3 Materials and Supplies
This account shall include the cost of materials and supplies used for administration and general services by the company.
630-4 Outside Services
This account shall include the fees and expenses of professional consultants and other outside parties for general services.
630-5 Other Expenses
This account shall include
(a) expenses of aircraft and vehicles used for general purposes;
(b) travel and other expenses of general employees and officers;
(c) utility services; and
(d) all other incidental general expenses not provided for in other accounts under the Regulations.
630-9 Law Expenses
This account shall include
(a) the pay and expenses of the law department of the company not provided for in other accounts under the Regulations;
(b) the fees, costs and expenses of lawsuits; and
(c) the payments of special law fees.
630-10 Rent
This account shall include rents payable in respect of leased plant used in pipeline service and not provided for in other accounts under the Regulations.
630-11 Injuries to Persons and Property Damage
This account shall include all expenses, except law expenses, incurred as a result of injury to or the death of an employee or other person or damage to or destruction of the property of others.
630-13 Employee Benefits
This account shall include
(a) the cost to the company of annuities and pensions for active or retired employees, their beneficiaries or designees;
(b) contributions to health or welfare funds or payments for similar benefits to or on behalf of employees; and
(c) premiums, to the extent borne by the company, for group life, health, accident and other beneficial insurance for employees: (See text of account 70 (Welfare and Pension Appropriations)).
630-14 Insurance
(1) This account shall include premiums payable to insurance companies against any loss that may be sustained by the company.
(2) Where the company provides self-insurance, the reserve accrual shall be debited to this account: (See Regulations, section 61).
630-15 Bad Debts
This account shall be debited with amounts receivable and determined to be uncollectable.
630-16 Taxes Other Than Income Taxes
This account shall include taxes levied under the laws of Canada or any province other than income taxes and ad valorem taxes on material.
Trunk Lines
710 Maintenance
This account shall include the total of the balances recorded in accounts 710-1 to 710-7.
710-1 Salaries and Wages
For the text of this account, see account 610-1.
710-3 Materials and Supplies
For the text of this account, see account 610-3.
710-4 Outside Services
For the text of this account, see account 610-4.
710-5 Other Expenses
For the text of this account, see account 610-5.
710-7 Equalization — Plant
For the text of this account, see account 610-7.
720 Transportation
This account shall include the total of the balances recorded in accounts 720-1 to 720-8.
720-1 Salaries and Wages
For the text of this account, see account 620-1.
720-2 Operating Fuel and Power
For the text of this account, see account 620-2.
720-3 Materials and Supplies
For the text of this account, see account 620-3.
720-4 Outside Services
For the text of this account, see account 620-4.
720-5 Other Expenses
For the text of this account, see account 620-5.
720-8 Oil Loss
For the text of this account, see account 620-8.
730 General
This account shall include the total of the balances recorded in accounts 730-1 to 730-16.
730-1 Salaries and Wages
For the text of this account, see account 630-1.
730-3 Materials and Supplies
For the text of this account, see account 630-3.
730-4 Outside Services
For the text of this account, see account 630-4.
730-5 Other Expenses
For the text of this account, see account 630-5.
730-9 Law Expenses
For the text of this account, see account 630-9.
730-10 Rent
For the text of this account, see account 630-10.
730-11 Injuries to Persons and Property Damage
For the text of this account, see account 630-11.
730-13 Employee Benefits
For the text of this account, see account 630-13.
730-14 Insurance
For the text of this account, see account 630-14.
730-15 Bad Debts
For the text of this account, see account 630-15.
730-16 Taxes Other Than Income Taxes
For the text of this account, see account 630-16.
SCHEDULE VII(s. 5)Group 1 Companies
- Enbridge Pipelines Inc.
- Enbridge Pipelines (NW) Inc.
- Kinder Morgan Cochin ULC
- Trans Mountain Pipeline ULC
- Trans-Northern Pipelines Inc.
- TransCanada Keystone Pipeline GP Ltd.
- SOR/86-999, s. 25
- SOR/2020-51, s. 1
- Date modified: