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

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.

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.

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).

• 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).

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.

• 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).

• 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]

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.