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

Regulations are current to 2017-11-20

Retained Earnings Accounts

 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

  •  (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 Board 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.

Operating Revenue Accounts

 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

  •  (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

  •  (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

  •  (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

  •  (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 Board 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

  •  (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

  •  (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

  •  (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.

 
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