Topic:"Accounting Standards" in M03154

POLICY - 02 Cash flows presented in the Statement of Cash Flow should be classified by operating activities, financing activities and investing activities.2 - 03 The Statement of Cash Flow should disclose at least the following items: - a....

AI summary The text outlines requirements for the classification and disclosure of cash flows in the Statement of Cash Flow, including operating, financing, and investing activities, and specifies items that must be disclosed such as cash from operations, discontinued operations, and debt-related transactions.

- h. cash and cash equivalents. 1 CICA Handbook, 1540.03 2 CICA Handbook, 1540.12

AI summary The text references sections from the CICA Handbook related to cash and cash equivalents, indicating a focus on accounting standards and policies concerning financial instruments and cash management.

1 CICA Handbook 1650.16 3 CICA Handbook 1650.14 c. When Canadian dollars are deposited to the US dollar bank account the cost of these dollars also goes to the operating expense resulting in the net exchange difference being recognized in...

AI summary The text discusses the recognition of net exchange differences as operating expenses when Canadian dollars are deposited into a US dollar bank account, referencing specific CICA handbooks.

OVERVIEW - 04 The account structure utilized by NSPI has been designed to address operational, financial and regulatory requirements. Accordingly, the account structure meets internal, CICA and UARB needs and is consistent with the FERC un...

AI summary NSPI's account structure is designed to meet operational, financial, and regulatory requirements, aligning with CICA and UARB standards as well as the FERC uniform system of accounts.

Cost Components Automatic Controls Panels Cost Elements Deleted: Page Break Data Loggers Meters Boiler (013) Deleted: August 10, 2006 December 31, 2009 Accounting Policy and Procedures Manual Page 6140-5 Corporate Controller's Division Cos...

AI summary The text lists various cost components related to boiler systems, circulating water systems, wastewater systems, and feedwater systems, including elements such as tanks, valves, piping, and meters. It references deleted pages and an accounting policy manual from December 31, 2009.

Cost Elements Architect's Plans Foundations Rails Belts Gates Road Beds Chutes Hoppers Screening System Controls Magnets Switches Dust Collectors Measuring Devices Ties Elevators Motors Wiring Filters Painting - First Time Fuel Handling -...

AI summary The text outlines various cost elements related to infrastructure and fuel handling, including architectural components, machinery, and accounting procedures. A section on fuel handling for oil is marked as deleted, and a page reference from an accounting manual is included.

Overhead Conductor (039) Deleted: August 10, 2006 Deleted: ¶ Page Break Corporate Controller's Division December 31, 2009 Accounting Policy and Procedures Manual Page 6140-12 Cost Components Conductor Cost Elements Conductors Dead Ends Spl...

AI summary The document outlines cost components and elements related to overhead conductor devices, transformers, and associated equipment as part of the accounting policy and procedures manual from December 31, 2009.

GENERAL 01 The construction work in progress ("CWIP") accounts contain all work orders relating to assets that are under construction, but not placed in service. These accounts also include retirements in progress. The work order is the ma...

AI summary The construction work in progress (CWIP) accounts track all work orders for assets under construction and retirements in progress. Work orders are central to data control, processing, and the budget process.

MAINTENANCE AND LICENSING AGREEMENTS 05 Maintenance or licensing agreements which extend more than one year should be recorded as prepaid expenses and charged to operations on a straight-line basis over the period covered by the agreement....

AI summary The text outlines accounting practices for maintenance and licensing agreements, stating that those exceeding one year should be recorded as prepaid expenses and amortized over the agreement period, while software maintenance labour should be expensed as incurred.

PROCEDURES - 07 The contributions required from customers are generally determined in accordance with internal operations guidelines and procedures. Contributions may take the form of cash or other assets or services. - 08 When a contribut...

AI summary The text outlines procedures for recording customer contributions, which may be in cash or other assets, and their accounting treatment. It describes journal entries for when contributions are received and when they are transferred to plant in service. References to deleted content and a CICA standard are also noted.

GENERAL - 01 Overhead expenses are integral costs associated with the construction of capital assets. Generally accepted accounting principles state that the cost of a capital asset not only includes direct construction or development cost...

AI summary Overhead expenses are essential in capital asset construction and must be allocated to projects. The Public Utilities Board and UARB have approved the use of direct labour costs as a method for allocating overhead expenses to capital projects.

DETERMINATION OF ELIGIBLE OVERHEAD EXPENSES 06 The next step is the identification of operating expenses that will benefit construction or development activities. A separate determination is made for each division. The process relies on bu...

AI summary The text discusses the process of identifying operating expenses that benefit construction or development activities, with a focus on budgeted expenses. It references the Corporate Controller's Division and an accounting policy manual dated December 31, 2009.

APPLICATION OF ADMINISTRATIVE AND VEHICLE OVERHEAD (SELF - CONSTRUCTED ASSETS) - 6230 expense figures since the overhead application rate for a particular fiscal year must be determined before the year commences.

AI summary The document discusses the determination of overhead application rates for administrative and vehicle expenses in fiscal years, emphasizing that these rates must be established before the year begins.

09 Shared Services Division Eligible Overhead Expenses and rates are calculated for each Shared Services Division, deemed to have capital related labour and expenses. These eligible expenses include, but are not limited to, office supplies...

AI summary The Shared Services Division's eligible overhead expenses, including office supplies, training, rent, and materials, are calculated with a separate allocation of head office rent added to the division's expenses.

10 HEAD OFFICE RENT Head Office rent is allocated to the three operating divisions based on the square footage occupied by each division. F o r a d et ai l e d di s c u s si o n of t h e g e n e r al l e d g e r a c c o u nt s t r u c t u...

AI summary Head Office rent is allocated to operating divisions based on square footage. A detailed discussion of the general ledger account structure is referenced in Section 3100. The document also contains deleted content related to capital-related overhead expenses and accounting policies as of December 31, 2009.

GENERAL - 01 Overhead expenses are integral costs associated with the construction of capital assets. Generally accepted accounting principles state that the cost of a capital asset not only includes direct construction or development cost...

AI summary Overhead expenses are essential in capital asset construction and must be allocated to capital projects. These costs include both direct and indirect expenses, with the latter being allocated based on labour costs as per the Public Utilities Board's ruling.

10 Shared Services Division Eligible Overhead Expenses and rates are calculated for each Shared Services Division deemed to have capital related labour and expenses. These eligible expenses include, but are not limited to, office supplies,...

AI summary The Shared Services Division calculates eligible overhead expenses, including office supplies, training, rent, and materials, for divisions with capital-related labour and expenses.

REVIEW OF OVERHEAD APPLICATION RATE 14 The overhead application rate will be reviewed on a periodic basis by Capital Accounting to assess its reasonableness. Deleted: Corporate Deleted: Services

AI summary The overhead application rate will be periodically reviewed by Capital Accounting to assess its reasonableness. The terms 'Corporate' and 'Services' have been deleted from the text.

POLICY - 04 Allowance for funds used during construction should be capitalized at the effective cost-of-capital rate, compounded semi-annually, except in the following circumstances: - a. Projects that will be under construction for less t...

AI summary The text discusses the capitalization of Allowance for Funds Used During Construction (AFUDC) at the effective cost-of-capital rate, compounded semi-annually, with exceptions for short-duration projects, projects delayed for over a year due to extraordinary circumstances, and projects where capitalization would exceed economic value or future benefits.

ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION - 6240

AI summary The document discusses the Allowance for Funds Used During Construction (AFUDC), a financial mechanism used to account for the cost of capital during the construction phase of utility projects.

08 Accounting Entry . Work order D387 will be used to demonstrate the general ledger entries required to record AFUDC. If the annual AFUDC rate was 10.2%, it must first be divided by 12 to arrive at the monthly rate. The result of this cal...

AI summary This section explains how to calculate and record the Allowance for Funds Used During Construction (AFUDC) using a work order. The example uses a 10.2% annual AFUDC rate applied to a $99,500 base, resulting in a monthly AFUDC of $845.75, which is recorded as a debit to CWIP and a credit to Interest Capitalized.

DEFINITION 01 Purchase price discrepancy is the excess of the cost of acquired assets over the net of the amount assigned to assets acquired and liabilities assumed as approved by the UARB.

AI summary The document defines 'purchase price discrepancy' as the difference between the cost of acquired assets and the net value of assets acquired and liabilities assumed, as approved by the Utility and Review Board (UARB).

POLICY - 02 Purchase price discrepancies should be recorded as assets. - 03 Section 1520 states purchase price discrepancies are not included in rate base. Section 5320 discusses the amortization of purchase price discrepancies.

AI summary The document discusses the treatment of purchase price discrepancies, stating they should be recorded as assets, but Section 1520 excludes them from the rate base. Section 5320 addresses the amortization of these discrepancies.

PROCEDURE - 02 When a capital asset is transferred from one location to another within the Company, the following accounting procedures are performed: - a. original installation costs are retired; - b. costs of removal are charged to accum...

AI summary The document outlines the accounting procedures for transferring capital assets within the Company, including retiring original installation costs, charging removal costs to accumulated depreciation, transferring original cost and accumulated depreciation, and adding installation costs to the original cost.

DEFINITION An asset retirement obligation is a legal obligation associated with the retirement of a tangible long-lived asset that an entity is required to settle as a result of an existing or enacted law, statute, ordinance, or written or...

AI summary The text defines an asset retirement obligation as a legal requirement tied to the retirement of a long-lived asset, arising from laws, contracts, or legal interpretations such as promissory estoppel.

GENERAL - 02 Effective January 1, 2004, the Company retroactively adopted the new accounting standard issued by the Canadian Institute of Chartered Accountants related to asset retirement obligations. This standard requires the Company to...

AI summary The Company adopted a new accounting standard related to asset retirement obligations effective January 1, 2004, which requires recognizing the present value of future expenditures as a liability. The UARB approved a depreciation order for the removal of generation facilities, with differences recognized as a regulated asset. Some transmission and distribution assets may also have retirement obligations, though estimates are not currently available.

POLICY 06 A liability for an asset retirement obligation should be recognized when a reasonable estimate of fair value can be made. 2 Formatted: Font: Not Italic Formatted: Font: Not Italic - Upon initial recognition, the carrying amount o...

AI summary The text discusses the recognition of liabilities for asset retirement obligations, the adjustment of long-lived asset carrying amounts, and the treatment of impairment losses. It references CICA Handbooks for accounting standards related to these topics.

ASSET RETIREMENTOBLIGATIONS (ARO) - 6320

AI summary The document discusses Asset Retirement Obligations (ARO) under the heading 6320, which likely relates to accounting and financial obligations associated with retiring long-term assets. The context includes known acronyms such as UARB and NSPI, indicating potential regulatory and corporate involvement.

PROCEDURES 10 For initial recognition of the Asset Retirement Obligations, these journal entries were recorded: DR: Plant, Property and Equipment CR: ARO Liability To set up the original cost of decommissioning the assets DR: Accumulated D...

AI summary The text outlines the accounting procedures for recognizing and recording asset retirement obligations, including initial journal entries and monthly entries related to depreciation and accretion expenses.

GENERAL - 01 A long-lived asset to be sold should be classified as held for sale in the period in which all of the following criteria are met: - a. It is available for immediate sale in its present condition subject only to terms that are...

AI summary The text outlines criteria for classifying long-lived assets as held for sale, specifying that an asset must be available for immediate sale, expected to be sold within one year, and actively marketed at a reasonable price. Additionally, newly acquired assets intended for sale are classified as held for sale at the acquisition date if the one-year requirement is met.

DEFINITIONS 01 Cost Formatted: Font: Not Bold Cost is the main component of most retirement work orders and represents the amount by which capital assets in service and related accumulated depreciation accounts must be reduced for the dele...

AI summary The text defines key terms related to asset retirement, including cost, asset retirement obligations (AROs), removal costs, salvage value, net salvage value, and retirement work orders. These terms are relevant for accounting and financial reporting in the context of retiring capital assets.

POLICIES - 01 Items under the caption "Cash" on the financial statements, the Company should include petty cash funds and the net total of the bank accounts, if the total is in a debit position (positive). - 02 If the net total of the Comp...

AI summary The text outlines accounting policies related to the presentation of cash and bank accounts in financial statements. Petty cash funds and bank account balances in debit positions should be included under 'Cash,' while overdrafts should be reclassified as 'Bank indebtedness.'

PROCEDURES 03 Monthly bank reconciliations are performed to ensure that all bank statements agree to the accounting records and that all required adjustments are recorded through journal entries. Deleted: preformed 04 If the net total of t...

AI summary The document outlines procedures for monthly bank reconciliations and the accounting treatment for bank overdrafts, including the necessary journal entries to reclassify overdrafts as liabilities.

SHORT-TERM INVESTMENTS - 6550 09 Please refer to Section 5800 for a more detailed discussion of the accounting treatment for interest income.

AI summary The text refers to Section 5800 for a detailed discussion on the accounting treatment of interest income related to short-term investments.

DEFINITIONS - Receivables are claims held against others for money, goods, or services. They are further classified as trade receivables and non-trade receivables. Trade receivables are amounts owed by customers for goods and services rend...

AI summary The text defines receivables, distinguishing between trade and non-trade receivables, and explains the allowance for doubtful accounts as a contra account used to estimate uncollectible receivables. NSPI further classifies non-trade receivables into business, employee, and miscellaneous categories.

POLICIES - Trade receivables should be recorded when customers are billed. - 04 Non-trade receivables should be recorded when the transaction, giving rise to the receivable, has occurred. - O5 An allowance for doubtful accounts should be r...

AI summary The document outlines policies for recording receivables and managing doubtful accounts. Trade receivables are recorded upon billing, non-trade receivables upon transaction occurrence, and an allowance for doubtful accounts is required to adjust receivables to expected collectible amounts.

06 Trade Receivables Electric service accounts receivable are generated by sales and billings to customers for power consumed. The receivables resulting from the billings system is recorded in two general ledger accounts to facilitate acco...

AI summary The document explains how electric service accounts receivable are recorded in two general ledger accounts, 330 Electric Service Receivables and 335 Large Customer Receivables, to facilitate account analysis and improve internal control.

09 Nontrade Miscellaneous Receivables Nontrade miscellaneous receivables mainly arise from sales of surplus material and equipment and returns to suppliers. Interest charges apply to past due balances. The general ledger accounts used to r...

AI summary Nontrade miscellaneous receivables primarily result from sales of surplus materials and equipment and returns to suppliers. These receivables are recorded in general ledger accounts such as 337 Miscellaneous Receivables and 352 Returns to Suppliers. Interest charges are applied to overdue balances.

2011 Accounting Standards In February 2008, the CICA announced Canadian Generally Accepted Accounting Principles ("GAAP") for publicly accountable enterprises will be replaced by International Financial Reporting Standards ("IFRS") for fis...

AI summary In 2008, the CICA announced the replacement of Canadian GAAP with IFRS for fiscal years starting in 2011. Nova Scotia Power Inc. (NSPI) began planning the transition but, due to uncertainty around IFRS for rate-regulated accounting, its parent company, Emera, opted to adopt US GAAP instead, which was approved in 2010.

DEFINITIONS - Derivative instruments designed to mitigate the risk of the Company's exposure to changes in market prices of, for example, natural gas, oil, coal & other commodities, interest rates, and foreign currency exchange rates, will...

AI summary The document defines key terms related to financial instruments and hedging activities, including derivative instruments, fair market value, hedging relationships, and hedge accounting. It outlines how financial instruments are accounted for, particularly under mark-to-market accounting, and references accounting standards and handbooks.

DEFINITIONS - Derivative instruments designed to mitigate the risk of the Company's exposure to changes in market prices of, for example, natural gas, oil, coal & other commodities, interest rates, and foreign currency exchange rates, will...

AI summary The document defines derivative instruments, fair market value, and hedging relationships, and explains how mark-to-market accounting is applied to financial instruments not in a valid hedging relationship. These definitions and accounting methods are crucial for understanding how the company manages financial risks and reports its financial position.

on hedging and hedged items are recognized in the same period(s). - 20 To ensure the proper accounting of hedging activities, at the inception of the hedging relationship:

AI summary The text discusses the accounting treatment of hedging activities, emphasizing the recognition of hedging and hedged items in the same period(s). It outlines the importance of proper accounting at the inception of a hedging relationship.

TRANSITIONAL PROVISIONS - 34 This policy is effective January 1, 2011 and should be applied retroactively with restatement of prior periods except as outlined below. - 35 Any item of property, plant and equipment, construction work-in-prog...

AI summary The transitional provisions outline how the new policy should be applied retroactively from January 1, 2011, with specific guidance on handling prior period adjustments, foreign exchange rates, and the treatment of transitional adjustments to the balance sheet without restating net earnings.

POLICY - 02 The statement of cash flows shall report the cash effects during a period of an entity's operations, its investing transactions, and its financing transactions. 2 - 03 Nova Scotia Power Inc. ("NSPI") applies the indirect method...

AI summary The text outlines the requirements for preparing a statement of cash flows under USGAAP, specifying that Nova Scotia Power Inc. (NSPI) uses the indirect method. It details the classification and disclosure requirements for various cash flow activities, including operations, investing, and financing.

h. cash and cash equivalents. FORMAT Deleted: Page Break ¶ 06 Cash flows from operating activities generally involve producing and delivering goods and Deleted: 4 providing services. Cash flows from operating activities are generally the c...

AI summary The text discusses cash flows from operating, financing, and investing activities, including the treatment of non-cash items, changes in working capital, and the classification of cash flows. It also references accounting standards and sections from the FASB and CICA Handbooks.

INTRODUCTION Deleted: ¶ 01 The Chart of Accounts is updated on a regular basis and posted on the Nova Scotia Power Inc. 01 Since the move to online input of General Ledger data, the Chart of ("NSPI") intranet. It is filed with the Nova Sco...

AI summary The document discusses the Chart of Accounts used by Nova Scotia Power Inc. (NSPI), which is updated regularly and filed with the Nova Scotia Utility and Review Board (UARB). It outlines the structure of the Oracle account number, consisting of five segments: Company, Account, Activity, Cost Centre, and Project. The document emphasizes compliance with US GAAP, UARB requirements, and internal needs.

09 Project Segment The final segment is the four-digit project identifier. The project identifier is optional for operating expenses, but can be used to track specific short-term operating projects. Sequential numbers are assigned to opera...

AI summary The document discusses the structure and use of project identifiers in accounting flex fields, distinguishing between operating expenses and capital items. It outlines the segments of the accounting flex field and highlights changes to the Chart of Accounts, including modifications to the Account, Activity, Cost Centre, and Project segments.

SHORT-TERM INVESTMENTS - 6550

AI summary The document discusses short-term investments related to Nova Scotia Power Inc. and includes references to accounting standards, financial audits, and regulatory oversight. It highlights the importance of compliance with US GAAP and Canadian accounting standards, as well as the role of KPMG and Grant Thornton in financial audits.

POLICIES - 02 Expenses paid on an annual basis should be recorded as prepaid assets and amortized on a straightline basis over the months to which the expense applies. - 03 Prepaid expenses should be presented in the financial statements i...

AI summary The text outlines accounting policies for prepaid expenses, stating they should be recorded as prepaid assets and amortized straight-line over the applicable period. It also references FASB ASC standards for financial statement presentation and mentions the deletion of a paragraph from the CICA Handbook.

OBJECTIVE - 01 The Company's financial instruments will adhere to the requirements of US Generally Accepted Accounting Principles (US GAAP) including ASC 815 – Derivatives and Hedging. - 02 This policy sets out general guidance for account...

AI summary The Company's financial instruments will comply with US GAAP, specifically ASC 815 – Derivatives and Hedging, as outlined in this policy which provides guidance on accounting for financial instruments and hedging activities.

PROCEDURES - 19 Hedge accounting should apply to all hedging activities of the Company in order to ensure gains, losses, revenues and expenses on hedging and hedged items are recognized in the same period(s). - 20 To ensure the proper acco...

AI summary The document outlines procedures for hedge accounting, requiring the Company to apply hedge accounting to all hedging activities to ensure consistent recognition of gains, losses, revenues, and expenses. It also mentions the need for proper documentation at the inception of the hedging relationship.

TRANSITIONAL PROVISIONS Deleted: 25 34 This policy is effective January 1, 2011 and should be applied retroactively with restatement of prior periods except as outlined below. Deleted: Middle Office Staff will be responsible for providing...

AI summary This section outlines transitional provisions for a policy effective January 1, 2011. It specifies that prior periods should be restated except for certain adjustments, including mark-to-market adjustments and foreign exchange rate changes. Transitional adjustments are to be deferred and recognized over time, with no restatement of net earnings prior to 2011.

02 When notification is received via a Board of Directors approved resolution, a dividend payable is recorded in the accounting records: DR 1-780 Dividends - Common XXXX CR 1-610 Dividends Payable XXXX 03 When dividends are paid, the trans...

AI summary This text outlines the accounting procedures for recording dividends when a Board of Directors approved resolution is received and when dividends are paid. It provides journal entries for both scenarios, showing the debits and credits involved in the accounting process.

POLICY 01 Includes all accrued and/or declared dividends on both common and preferred shares.1 02 Dividends payable for cumulative preferred shares are in accordance with the terms of the preferred shares. Please refer to NSPI Accounting P...

AI summary This document discusses Nova Scotia Power Inc.'s accounting policies and procedures manual, which is reviewed by Grant Thornton LLP for compliance with US GAAP for regulated entities. The review confirms that the policies align with applicable standards and notes that future updates may be required if accounting standards change.

Re: Proposed hedging accounting policy 6960 We recently received your request to review the proposed accounting policy 6960 for hedging activities of Nova Scotia Power Inc. ("the Company") which is effective beginning m fiscal 2011. You ha...

AI summary Grant Thornton LLP confirms that the proposed accounting policy 6960 for hedging activities by Nova Scotia Power Inc. is appropriate under US GAAP. The policy is effective beginning in fiscal 2011 and aligns with management's conclusions.

as follows:¶ Account Deleted: The journal entry for the accrual of unbilled electrical service is

AI summary The text references a journal entry related to the accrual of unbilled electrical service, which is a financial accounting practice. This topic is relevant to accounting policies and standards.

PROPERTY, PLANT AND EQUIPMENT CAPITAL CONTRIBUTIONS IN AID OF CONSTRUCTION - 6220

AI summary The document discusses property, plant, and equipment capital contributions in aid of construction, focusing on accounting standards and regulatory considerations relevant to Nova Scotia's utility sector.

POLICIES O5 Contributions in aid of construction should be offset against the property, plant or equipment to which they relate so that the net amount is depreciated and included in rate base. Deleted: 1 06 If a relationship to a specific...

AI summary The text outlines policies for accounting treatment of contributions in aid of construction, specifying that they should be offset against related property, plant, or equipment and depreciated accordingly. If no specific asset is identified, contributions should be offset against 'Assets in Service' by function and amortized at the composite rate of the relevant asset class.

PROCEDURES - 07 The contributions required from customers are generally determined in accordance with internal operations guidelines and procedures. Contributions may take the form of cash or other assets or services. - When a contribution...

AI summary The procedures outlined describe how customer contributions are recorded and managed, including the forms of contributions and the accounting entries required when contributions are received and when projects are closed to plant in service. References are made to internal guidelines and the Accounting Policy & Procedure Manual.

DEFINITION 01 Intangible assets are those that lack physical substance. 1

AI summary The text defines intangible assets as those that lack physical substance, providing a foundational concept in accounting and financial reporting.

POLICY - Intangible assets include land rights and computer software and are capitalized in accordance with NSPI's Accounting Policy & Procedure Manual section 6000. - Intangible assets with a finite useful life shall be amortized in accor...

AI summary The text discusses the capitalization and amortization of intangible assets, including land rights and computer software, according to NSPI's Accounting Policy & Procedure Manual sections 6000 and 5300.

ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION - 6240

AI summary The document discusses the Allowance for Funds Used During Construction (AFUDC) under the context of regulatory proceedings, focusing on financial accounting standards and their application in Nova Scotia's utility sector.

05 Criteria for Application AFUDC is applied to all capital work orders with the following exceptions: - a. work orders with a construction period less than two months (e.g. routine work orders); - b. work orders used to purchase assets th...

AI summary The document outlines the criteria for applying AFUDC (Allowance for Funds Used During Construction) to capital work orders, with specific exceptions such as short construction periods, immediate in-service assets, land purchases, fully customer-funded projects, deferred work orders, and retirement work orders. It also references the CICA Handbook and regulatory requirements for capitalizing AFUDC in rate-of-return regulated utilities.

Deleted: ¶ The cost of an item of property, plant and equipment that is acquired, constructed, or developed over time includes carrying costs directly attributable to the acquisition, construction, or development activity such as interest...

AI summary The text discusses the cost of property, plant, and equipment, including carrying costs and interest costs when capitalized, and mentions the inclusion of directly attributable allowance for funds used during construction for rate-regulated assets.

06 Basis for Application The application base for AFUDC includes the cumulative total of all direct and indirect charges to work orders, but excludes all AFUDC related to spending subsequent to January 1 or July 1, whichever is the latest....

AI summary The application base for AFUDC includes cumulative direct and indirect charges to work orders, excluding AFUDC related to spending after January 1 or July 1, whichever is later. This exclusion leads to semi-annual compounding of AFUDC.

Deleted: Deleted: (June 30 or December 31) 3,500¶ (does not include monthly calculation for January and July) ¶ Application base $ 99,500¶ Section Break (Next Page) Deleted: 08 Accounting Entry¶ Work order D387 will be used to demonstrate...

AI summary The text discusses the accounting entry process for recording AFUDC (Allowance for Funds Used During Construction) at an annual rate of 10.2%. The monthly rate is calculated by dividing the annual rate by 12, and then multiplying by the application base of $99,500, resulting in an AFUDC of $845.75. This amount is recorded in the general ledger with specific debit and credit entries.

GENERAL - O1 A long-lived asset to be sold should be classified as held for sale in the period in which all of the following criteria are met: - a. Management, having the authority to approve the action, commits to a plan to sell the asset...

AI summary This document outlines the accounting treatment for long-lived assets classified as held for sale, including criteria for classification, measurement, and reclassification. It references FASB ASC standards and NSPI Accounting Policy and Procedures Manual guidelines.

RETIREMENT AND DISPOSAL OF CAPITAL ASSETS - 6420

AI summary The document discusses the retirement and disposal of capital assets, including relevant accounting standards and financial considerations. It references the Allowance for Funds Used During Construction (AFUDC) and the Financial Accounting Standards Board (FASB).

01 Cost Cost is the main component of most retirement work orders. Refer to NSPI's Accounting Policy & Procedures Manual 6100 for a more detailed description of the items included in cost. The amounts that must be removed to record the del...

AI summary Cost is a central element in retirement work orders, including the asset's cost and accumulated depreciation when removing it from service. NSPI's Accounting Policy & Procedures Manual 6100 provides further details on cost components.

02 Asset Retirement Obligations ("AROs") An asset retirement obligation is an obligation associated with the retirement of a tangible long-lived asset. These costs include but are not limited to labour, materials, overhead and vehicle expe...

AI summary An asset retirement obligation (ARO) refers to the costs associated with retiring a tangible long-lived asset, including labour, materials, overhead, and vehicle expenses.

04 Salvage Value Salvage value refers to the proceeds from the sale of a retired asset or, if a retired asset is returned to inventory, the inventory value at which it is recorded.

AI summary Salvage value is defined as the proceeds from the sale of a retired asset or the inventory value if the asset is returned to inventory.

PROCEDURES 69 For retirements of property, plant and equipment other than land ,the original cost plus any costs of removal less salvage proceeds is charged to accumulated depreciation, with no immediate gain or loss recognized. Deleted: a...

AI summary The text outlines procedures for retiring property, plant, and equipment, including the accounting treatment for removal costs, salvage proceeds, and the use of retirement work orders. It specifies that no immediate gain or loss is recognized and refers to NSPI's Accounting Policy & Procedures Manual for further details.

Retirement of Assets Other than Land - When assets are disposed of, a retirement work order is set up or retirement accounts are set up within a capital work order. - Asset retirement obligations have been set up for the decommissioning of...

AI summary The document outlines the process for retiring assets other than land, including the setup of retirement work orders and accounts. It references FASB ASC 410-20 for the accounting treatment of asset retirement obligations, including initial and subsequent measurements.

PROCEDURES O3 Please refer to NSPI's Accounting Policy & Procedures Manual Section 6420 for the procedures to record the retirement of capital assets. Deleted: and amortized over the estimated useful life of the assets remaining in the pro...

AI summary The document refers to NSPI's Accounting Policy & Procedures Manual Section 6420 for procedures to record the retirement of capital assets. A deleted note mentions amortization over the estimated useful life of the assets remaining in the property unit.

CURRENT ASSETS

AI summary The text presents a section on current assets, including images of financial data related to Nova Scotia Power Inc. (NSPI) and accounting standards. The content appears to be from a regulatory proceeding involving financial reporting and asset management.

PROCEDURE Unbilled revenue receivable is charged to account 355. Deleted: 03 Deleted: August 10, 2006 Deleted: and .04. & lt;sup>1 Please refer to NSPI's Accounting Policy and Procedures Manual Section 4100, paragraphs .02

AI summary The text discusses the accounting treatment of unbilled revenue receivable, specifically charging it to account 355. It references NSPI's Accounting Policy and Procedures Manual Section 4100, paragraph .02 for further details.

POLICIES - 02 Inventor ies are measured at the lower of cost and market. Market means current replacement cost provided that market does not exceed the net realizable value and market shall not be less than net realizable value reduced by...

AI summary The policies outline that inventories are valued at the lower of cost and market, with market defined as current replacement cost, not exceeding net realizable value, and not less than net realizable value reduced by a normal profit margin. These policies align with FASB ASC Topic 330.

Materials - Materials are accounted for using a computerized perpetual inventory system. Purchases are recorded at cost and issues are charged to capital or operating accounts at average cost. - 05 Physical counts are performed on a rotati...

AI summary The document describes the inventory accounting practices of the Company, including the use of a perpetual inventory system, cost-based recording of purchases, average cost allocation for issues, periodic physical counts, and the application of an annual interest charge to storerooms to cover inventory carrying costs.

Fuel - 07 Fuel inventories, consisting of oil, coal and fuel additives, are accounted for using the weighted average cost method. This method assigns costs between fuel inventory on hand and fuel consumed on the assumption that fuel is con...

AI summary The document outlines the accounting methods used for fuel inventories, including the weighted average cost method, monthly fuel reporting, and the treatment of fuel purchases not yet invoiced. These practices are applied to fuel types such as oil, coal, and fuel additives.

POLICIES - The Company accrues a liability for termination costs associated with severance programs consistent with the requirements of FASB ASC Topic 420 Exit or Disposal Cost Obligations or ASC Topic 712 Compensation Nonretirement Post R...

AI summary The Company accrues liabilities for termination costs under FASB ASC Topics 420 and 712, recognizing these costs when they are determinable and unavoidable. The treatment of these costs depends on the type of termination benefit and the program's cost relative to annual revenue requirements. Costs below 0.25% of annual revenue are expensed immediately, while higher costs are deferred and amortized over three years.

PROCEDURES - O7 The total expected cost of a severance program should be accrued in the year that conditions for recognition are met based on the type of benefit offered as outlined in paragraph 2. - 08 If the program's total expected cost...

AI summary The document outlines procedures for accounting for severance program costs. If the total expected cost is less than 0.25% of annual revenue requirement, costs are expensed immediately. If greater, costs are deferred and amortized over three years. This aligns with accounting standards and involves considerations such as employee termination, pension costs, and legal expenses.

NEW BUSINESS COSTS - 6940

AI summary The document discusses new business costs, likely related to capital expenditures and financial accounting standards. It includes references to Allowance for Funds Used During Construction (AFUDC) and the Financial Accounting Standards Board (FASB).

DEFINITION - O1 Start-up costs include all expenses incurred by Nova Scotia Power Inc. ("NSPI") for the development of business opportunities outside the Company's normal sphere of regulated generation and delivery of electricity. Start-up...

AI summary The document defines start-up costs for Nova Scotia Power Inc. (NSPI) as expenses incurred for business opportunities outside regulated electricity generation and delivery, referencing FASB ASC 720-15-20. It also notes that other costs not covered by this standard should be guided by NSPI's Accounting Policy and Procedures Manual.

OVERHEAD APPLICATION RATE - 6940A - O1 An overhead charge will apply to labour costs of Nova Scotia Power Inc. ("NSPI") employees outside of the corporate support groups relating to affiliate or non-regulated activities. This charge is des...

AI summary This document outlines the overhead application rate for Nova Scotia Power Inc. (NSPI), which applies to labour costs of employees outside of corporate support groups involved in affiliate or non-regulated activities. The rate is designed to recover administrative costs not directly attributable to these activities, ensuring ratepayers are not adversely affected. It lists various OM&G expense accounts included in the calculation and specifies that the rate should be reviewed annually.

ACCRUED INTEREST ON LONG-TERM DEBT - 8120

AI summary The document discusses accrued interest on long-term debt, likely in the context of financial accounting and regulatory considerations for Nova Scotia Power Inc. and the Nova Scotia Utility and Review Board.

PROCEDURE The interest expense for each debt instrument is credited to this account and the resulting payments, as they occur, are charged to this account. Deleted: August 10, 2006

AI summary The text discusses the accounting treatment of interest expense for debt instruments, specifying that it is credited to a particular account and payments are charged to the same account as they occur.

LIABILITIES INCOME TAXES PAYABLE - 8300 01 Includes all income taxes payable to both levels of government. 1 Deleted: August 10, 2006 & lt;sup>1 Please refer to NSPI Accounting Policy and Procedures Manual Section 5900. September 23,2010 M...

AI summary The letter from Grant Thornton LLP confirms that the accounting policies and procedures of Nova Scotia Power Inc. (NSPI) align with US GAAP for regulated entities. The review was conducted on the policies outlined in the NSPI Accounting Policies and Procedures Manual, with a focus on sections related to income taxes payable and other accounting practices.

APPLICATION - 03 After the separation of the regulated utility business of Nova Scotia Power Inc. ("NSPI") and the other businesses of Emera Inc. 1 , NSPI segregated its financial data from its affiliates using the "Multi-Org" functionalit...

AI summary NSPI has implemented Oracle's 'Multi-Org' functionality to segregate its financial data from affiliates, creating a more appropriate account structure for non-electric utility businesses. The system allows for decentralization of tasks, improved tracking of expenditures, and direct integration of accounting information into the General Ledger.

OVERVIEW - 03 The account structure utilized by NSPI has been designed to address operational, financial and regulatory requirements. Accordingly, the account structure meets US generally accepted accounting principles financial reporting...

AI summary NSPI's account structure is designed to meet operational, financial, and regulatory requirements, including compliance with US GAAP, UARB standards, and internal needs.

GENERAL 01 Generic accounts simply provide a higher level summary of Nova Scotia Power Inc.'s ("NSPl's or the Company's") asset accounts than the break down furnished by the capital and intangible activities. The format conforms to the acc...

AI summary The text discusses the use of generic accounts by Nova Scotia Power Inc. (NSPI) for summarizing asset accounts, aligning with FERC standards in the U.S., and references a cross-reference table in NSPI's Accounting Policy and Procedures Manual for reporting to the UARB.

POLICY 02 The Company should use generic accounts to summarize its asset activity codes for filings with the UARB.

AI summary The Company is advised to use generic accounts to summarize its asset activity codes for filings with the UARB, ensuring consistency and clarity in financial reporting.

ASSET RETIREMENTOBLIGATIONS (ARO) - 6320

AI summary The document discusses the topic of Asset Retirement Obligations (ARO) under the Nova Scotia Utility and Review Board (UARB). It includes references to accounting standards and financial practices related to ARO, such as US-GAAP and C-GAAP, and mentions entities like Nova Scotia Power Inc. (NSPI) and Nova Scotia Power (NSP).

1 FASB ASC 410-20-20 RETIREMENT AND DISPOSAL OF CAPITAL ASSETS - 6420

AI summary The document text provides a heading related to the retirement and disposal of capital assets under FASB ASC 410-20-20, indicating a focus on accounting standards for asset retirement obligations.

PROCEDURES 03 Please refer to NSPl's Accounting Policy & Procedures Manual Section 6420 for the procedures to record the retirement of capital assets.

AI summary The document refers to NSPl's Accounting Policy & Procedures Manual Section 6420 for procedures related to recording the retirement of capital assets.

POLICIES - 04 All receivables (trade and non-trade) are classified as loans and receivables and follow an amortized cost model. Receivables that have a relatively short period (less than one year) of time to maturity are not adjusted to re...

AI summary The policies outline the accounting treatment for receivables, including classification, amortized cost model, fair value recording, and allowance for doubtful accounts to ensure accurate financial reporting by NSPI.

07 Trade Receivables Electric service accounts receivable are generated by sales and billings to customers for power consumed. The receivables resulting from the billings system is recorded in two general ledger accounts to facilitate acco...

AI summary Electric service accounts receivable are generated from customer billings for power consumed and are recorded in two general ledger accounts to enhance account analysis and internal control.

UNBILLED REVENUE RECEIVABLE - 6650

AI summary The document discusses the Unbilled Revenue Receivable (6650) under Nova Scotia Power Inc. (NSPI), focusing on revenue recognition and accounting standards related to unbilled revenue. It involves financial accounting practices and regulatory considerations.

POLICIES - 02 Inventor ies are measured at the lower of cost and market. Market means current replacement cost provided that market does not exceed the net realizable value and market shall not be less than net realizable value reduced by...

AI summary The text outlines policies for inventory measurement, specifying that inventories should be valued at the lower of cost and market, with market defined as current replacement cost not exceeding net realizable value. It also states that inventories must be reported in accordance with FASB ASC Topic 330.

Fuel - 07 Fuel inventories, consisting of oil, coal and fuel additives, are accounted for using the weighted average cost method. This method assigns costs between fuel inventory on hand and fuel consumed on the assumption that fuel is con...

AI summary Fuel inventories are accounted for using the weighted average cost method, with monthly reports tracking fuel purchases, consumption, and inventory balances. Fuel purchases received but not yet invoiced are accrued and recorded as liabilities.

POLICIES - 02 Expenses paid on an annual basis should be recorded as prepaid assets and amortized on a straightline basis over the months to which the expense applies. - 03 Prepaid expenses should be presented in the financial statements i...

AI summary The text outlines policies for accounting treatment of prepaid expenses, requiring them to be recorded as prepaid assets and amortized over the relevant period, in accordance with specific FASB standards.

POLICIES - 01 The Company accrues a liability for termination costs associated with severance programs consistent with the requirements of FASB ASC Topic 420 - Exit or Disposal Cost Obligations orASC Topic 712 - Compensation - Nonretiremen...

AI summary The document outlines the accounting treatment for termination costs associated with severance programs. It references FASB ASC topics and describes conditions under which liabilities are recognized, including one-time, special, and contractual termination benefits. The Company defers costs exceeding 0.25% of annual revenue requirement and amortizes them over three years.

OBJECTIVE - 01 The Company's financial instruments will adhere to the requirements of US Generally Accepted Accounting Principles (US GAAP) including ASC 815 - Derivatives and Hedging. - 02 This policy sets out general guidance for account...

AI summary The Company's financial instruments will comply with US GAAP, specifically ASC 815, which governs derivatives and hedging. The policy provides guidance on accounting for these instruments and related documentation.

ACCOUNTING FOR FINANCIAL INSTRUMENTS AND HEDGES - 6960 PO",.. - a. The front office should ensure the hedging activity is in compliance with the appropriate risk management policy; - b. The front office should document the specific risk ex...

AI summary The document outlines accounting procedures for financial instruments and hedges, emphasizing compliance with risk management policies, documentation requirements, and the treatment of gains and losses on derivatives. It details how fair value changes, foreign currency translations, and fees are accounted for in accordance with accounting standards.

ACCOUNTING FOR FINANCIAL INSTRUMENTS AND HEDGES - 6960 balance sheet or income statement item that would have been used had the hedged item still existed in the month the underlying hedging item settles. - If the timing of the hedged item...

AI summary This section outlines the accounting treatment for financial instruments and hedges, emphasizing the deferral of gains or losses when hedging items are settled and the importance of proper documentation and compliance by front and back office staff.

02 When notification is received via a Board of Directors approved resolution, a dividend payable is recorded in the accounting records: DR 1-780 Dividends - Common xxxx CR 1-610 Dividends Payable XXXX 03 When dividends are paid, the trans...

AI summary The text outlines the accounting treatment for recording dividends when notification is received via a Board of Directors approved resolution and when dividends are subsequently paid. It includes journal entries for both scenarios, focusing on the accounting records related to retained earnings and dividends payable.

POLICY - 01 Long-term debt issued by the Company is reported net of long-term debt payable in one year, as long-term debt on the balance sheet of its financial statements. Detail of the long-term debt issued by the Company are reported in...

AI summary The document discusses the accounting treatment of long-term debt, including commercial paper and debentures, and outlines how the Nova Scotia Utility and Review Board has allowed the deferral and recovery of debt defeasance costs related to NSPFC.

PROCEDURES - O5 At a particular point in time, the balance in the accumulated depreciation accounts is comprised of the following amounts: - a. total depreciation expense taken to date; - b. total depreciation associated with the original...

AI summary The document outlines the components of the accumulated depreciation accounts, including total depreciation expense, decommissioning asset depreciation, accretion related to asset retirement obligations approved by the UARB, and adjustments for salvage allowances and retired asset costs.

LIABILITIES INCOME TAXES PAYABLE - 8300 01 Includes all income taxes payable to both levels of government. 1 Deleted: August 10, 2006 & lt;sup>1 Please refer to NSPI Accounting Policy and Procedures Manual Section 5900. September 23,2010 M...

AI summary This document discusses the review of Nova Scotia Power Inc.'s accounting policies and procedures by Grant Thornton LLP under US GAAP for regulated entities. The review confirms that the policies align with US GAAP standards as of the date of the letter, with a note that future changes may require updates to the Manual.

The following table summarizes the proposed changes to NSPI's Accounting Manual within Submission 1 by section: SECTION COMMENTS 1000: Introduction Reference from Canadian GAAP to US GAAP in paragraph 06 is the only change in this section...

AI summary The document outlines proposed changes to NSPI's Accounting Manual in Submission 1, primarily driven by the transition to US GAAP. The changes include updates to references, definitions, and policies in several sections, with specific impacts noted for financial instruments and hedges.

The following table summarizes the proposed changes to NSPI's Accounting Manual within Submission 2 by section: SECTION COMMENTS 1540: Audit, Nominating and Corporate Governance Committee Reference to US Securities Law added to paragraph 0...

AI summary The document outlines proposed changes to NSPI's Accounting Manual, primarily related to updates in US GAAP standards, including audit requirements, materiality definitions, foreign currency translation, revenue recognition, and inventory measurement methods, with minimal expected impact due to existing compliance.

SECTION COMMENTS 7200: Retained Earnings Under Canadian GAAP dividends on preferred shares were expensed as a part of financing charges. Under US GAAP these amounts are recorded as a reduction to retained earnings; and as a reduction from...

AI summary The text discusses differences between Canadian GAAP and US GAAP in accounting for retained earnings and debt due within one year. It also notes that NSPI did not update other sections of Submission 2 due to the switch to US GAAP.

The following table summarizes the proposed changes to NSPI's Accounting Manual within Submission 3 by section: SECTION COMMENTS 1530: Regulated Return of Equity Paragraphs 03 and 04 have been modified to provide a more detailed and accura...

AI summary This section outlines proposed changes to NSPI's Accounting Manual in Submission 3, focusing on the regulated return of equity. Modifications to paragraphs 03 and 04 aim to provide a more accurate description, with adjustments related to US GAAP impacting certain accounts but not the return on equity calculation itself.

IV FINDINGS [19] The publication of IFRS is under the authority of the International Accounting Standard Board ("IASB"). Regulated entities, such as NSPI, have the ability to recognize those assets and liabilities ("regulated assets and li...

AI summary The document discusses the regulatory and accounting challenges faced by Nova Scotia Power Inc. (NSPI) due to the transition from C-GAAP to IFRS. It highlights the lack of clarity on recognizing regulated assets and liabilities under IFRS, leading to potential financial statement inconsistencies. The UARB has approved NSPI's request for an exemption from C-GAAP and ordered the filing of annual financial statements under both C-GAAP and US-GAAP for the next two years.

06 Long-term Monetary Assets and Liabilities a. Long-term debt denominated in foreign currencies are translated at each quarter-end using the noon rate on the balance sheet date. Differences between the translation at transaction date and...

AI summary The document discusses the accounting treatment of long-term debt denominated in foreign currencies, stating that differences between the translation at transaction date and the balance sheet date are charged to operations, referencing FASB ASC 830-10-45-17.

FINANCIAL REPORTING SYSTEM

AI summary The document introduces the Financial Reporting System, which is essential for regulatory compliance and transparency in utility operations. It outlines the structure and standards used for financial reporting, including references to accounting principles and regulatory oversight.

OVERVIEW - 03 The account structure utilized by NSPI has been designed to address operational, financial and regulatory requirements. Accordingly, the account structure meets US generally accepted accounting principles financial reporting...

AI summary NSPI's account structure is designed to meet operational, financial, and regulatory requirements, including US GAAP, UARB requirements, and internal needs.

FINANCIAL REPORTING SYSTEM

AI summary The document introduces the Financial Reporting System, which is essential for regulatory compliance and transparency in utility operations. It outlines the structure and standards used for financial reporting, including references to accounting principles and regulatory oversight.

GENERAL 01 Generic accounts simply provide a higher level summary of Nova Scotia Power Inc.'s ("NSPI's or the Company's") asset accounts than the break down furnished by the capital and intangible activities. The format conforms to the acc...

AI summary The document explains that generic accounts provide a high-level summary of NSPI's asset accounts, following FERC standards. A cross-reference table in NSPI's Accounting Policy and Procedures Manual 3350A maps these accounts to internal tracking activities for the UARB.

FINANCIAL REPORTING SYSTEM

AI summary The document introduces the Financial Reporting System, which is essential for regulatory compliance and transparency in utility operations. It outlines the structure and standards used for financial reporting, including references to accounting principles and regulatory oversight.

GENERIC ACCOUNT ACTIVITY CODE STM (S) GAS (G) HYD (H) TRN (T) DIST (DP) GEN (P) WIND (W) Land and Land Rights Land 001 X X X X X X Land Rights 002 X X X X X X X Buildings, Structures & Grounds Buildings, Structures & Grounds 003 X X X X X...

AI summary The document presents a table outlining various generic accounts and their associated activities, codes, and classifications across different sectors such as land, buildings, equipment, and infrastructure. It includes details on classifications for financial reporting purposes.

POLICIES - 01 The Company records revenue from the sale of electricity to customers at rates approved by the Nova Scotia Utility and Review Board ("UARB"). - 02 Revenues are recognized in accordance with FASB ASC Topic 605 -10-25 and S25 R...

AI summary The Company records electricity revenue at rates approved by the Nova Scotia Utility and Review Board, following FASB ASC Topic 605-10-25 and S25 Revenue Recognition. Revenue is billed cyclically with monthly accruals for unbilled revenue, which is recorded as a current asset on the balance sheet.

POLICY 03 The Company should record the cost of fuels consumed and the cost of power purchased as an expense in the statement of earnings in the period of consumption or purchase.

AI summary The Company is instructed to record the cost of fuels consumed and the cost of power purchased as an expense in the period of consumption or purchase, reflecting proper accounting practices for these costs.

04 Fuel Consumption Fuel costs are charged to expense as follows: - a. Fuels are recorded as inventory when received. - b. As fuel is consumed, its cost is relieved from inventory using the weighted average cost method and is charged to fu...

AI summary Fuel costs are recorded as inventory upon receipt and charged to expense as they are consumed using the weighted average cost method. Consumption reports from generating plants are used to make these entries, and derivative transaction settlements are also included in fuel expense.

POLICY 02 The Company should record the cost of OM&G expenditures that do not benefit any future period as an expense in the Statement of Earnings in the period that they are incurred. - 03 OM&G expenses are recorded, in both computerized...

AI summary The document outlines the proper accounting treatment for OM&G expenditures, specifying that costs not benefiting future periods should be recorded as expenses in the Statement of Earnings when incurred. It also describes the systems and procedures used for recording these expenses and refers to the NSPI Accounting Policy and Procedures Manual for further details.

03 Debt Issue Costs The issue of long-term debt is usually an involved process in which the Company may retain the services of brokers, lawyers and auditors. Since the cost of using these services can be significant and provide future bene...

AI summary The text explains that under US GAAP, costs associated with issuing long-term debt, such as those for brokers, lawyers, and auditors, must be deferred and amortized over the life of the debt. Premiums, discounts, and commissions are deferred, while other costs are expensed in account 084 bank charges.

09 The Company is subject to Part VI.1 tax at a prescribed rate applied to preferred share dividends paid. The Company receives a tax deduction equal to a prescribed multiple of the Part VI.1 tax. 1 FASB ASC 980-740-25-2

AI summary The Company is subject to Part VI.1 tax on preferred share dividends, with a tax deduction based on a prescribed multiple of this tax. The text references FASB ASC 980-740-25-2, indicating a connection to accounting standards related to taxes.

POLICIES 07 Expenditures meeting the criteria described in Paragraphs 02, 03 and 06 create a benefit that will be realized by the Company beyond the current year. Accordingly, they should be capitalized. - 08 Every expenditure must be clas...

AI summary This section outlines the policies for classifying expenditures as capital or operating, emphasizing that capital expenditures are those that provide benefits beyond the current year and should be capitalized. It also mentions the use of materiality policies and references specific accounting procedures and manuals for guidance.

GENERAL - 01 Overhead expenses are integral costs associated with the construction of capital assets. As per NSPI's Accounting Policy & Procedures Manual Section 6100 – Cost, the cost of a capital asset not only includes direct constructio...

AI summary Overhead expenses are essential in capital asset construction and must be allocated to capital projects. NSPI's accounting policy outlines that overhead costs, based on labour for internally managed projects and contracted costs for external projects, are allocated according to the Public Utilities Board's ruling.

POLICY - A liability for an asset retirement obligation should be recognized when a reasonable estimate of fair value can be made. 2 - Upon initial recognition, the carrying amount of the related long-lived asset will be increased by the s...

AI summary The text discusses the accounting treatment of asset retirement obligations, stating that such liabilities should be recognized when a reasonable estimate of fair value can be made, and that changes in the liability should be accounted for over time and with revisions to estimates.

LONG LIVED ASSETS TO BE DISPOSED OF BY SALE – 6360

AI summary The document discusses the disposal of long-lived assets through sale, likely involving regulatory considerations and accounting standards relevant to Nova Scotia Power and the Utility and Review Board.

- b. Fair value at the date of the decision not to sell 5 1 F A S B A S C 3 6 0 - 1 0 - 4 5 - 9 2 F A S B A S C 3 6 0 - 1 0 - 4 5 - 1 2

AI summary The text references accounting standards related to fair value at the date of a decision not to sell, citing FASB ASC 360-10-45-9 and FASB ASC 360-10-45-12.

RETIREMENT AND DISPOSAL OF CAPITAL ASSETS - 6420

AI summary The document discusses the retirement and disposal of capital assets, focusing on accounting standards, asset management, and financial considerations related to capital expenditures and asset retirement obligations.

1 F A S B A S C 4 1 0 - 2 0 - 2 0 RETIREMENT AND DISPOSAL OF CAPITAL ASSETS - 6420

AI summary The document references the retirement and disposal of capital assets under the code 6420, which is related to accounting standards issued by the Financial Accounting Standards Board (FASB) and the Accounting Standards Codification (ASC). This topic is relevant to how capital assets are accounted for and disposed of in regulatory proceedings.

PROCEDURES 03 Please refer to NSPI's Accounting Policy & Procedures Manual Section 6420 for the procedures to record the retirement of capital assets.

AI summary The document refers to NSPI's Accounting Policy & Procedures Manual Section 6420 for procedures on recording the retirement of capital assets.

PROCEDURES - 05 Monthly bank reconciliations are performed to ensure that all bank statements agree to the accounting records and that all required adjustments are recorded through journal entries. - 06 If the net total of the bank account...

AI summary The procedures outline monthly bank reconciliations to ensure alignment between bank statements and accounting records, with specific journal entries for reclassifying bank overdrafts.

PROCEDURES 04 Unbilled revenue receivable is charged to account 355. 1 Please refer to NSPI's Accounting Policy and Procedures Manual Section 4100, paragraphs .02

AI summary The document outlines that unbilled revenue receivable is recorded in account 355, referencing NSPI's Accounting Policy and Procedures Manual Section 4100, paragraph .02.

POLICIES - 01 The Company accrues a liability for termination costs associated with severance programs consistent with the requirements of FASB ASC Topic 420 – Exit or Disposal Cost Obligations or ASC Topic 712 – Compensation – Nonretireme...

AI summary The document outlines the Company's accounting treatment of termination costs associated with severance programs, referencing FASB ASC topics and considering the impact on revenue requirement and rate stability. It distinguishes between one-time, special, and contractual termination benefits and explains when liabilities are recognized.

DEFERRED CHARGES

AI summary The section discusses deferred charges, which are financial obligations that have been recognized but not yet paid. These charges are typically related to long-term assets and liabilities, and their treatment is governed by accounting standards and regulatory requirements.

OVERHEAD APPLICATION RATE

AI summary The document discusses the overhead application rate, focusing on accounting and financial standards relevant to utility companies in Nova Scotia. Key topics include accounting standards, cost recovery, and regulatory considerations.

DEFERRED CHARGES

AI summary The section discusses deferred charges, which are financial obligations that have been recognized but not yet paid. These charges are typically related to long-term assets and liabilities, and their treatment is governed by accounting standards and regulatory requirements.

OBJECTIVE - 01 The Company's financial instruments will adhere to the requirements of US Generally Accepted Accounting Principles (US GAAP) including ASC 815 – Derivatives and Hedging. - 02 This policy sets out general guidance for account...

AI summary The Company will follow US GAAP, specifically ASC 815, for its financial instruments and hedging activities, including documentation requirements.

lity as appropriate. - 18 The Company does not test or measure the effectiveness of its derivative instruments used as hedges. The derivative instruments used as hedges in accordance with the Company's risk management policies are assumed...

AI summary The Company assumes that its derivative instruments used as hedges are 100% effective without testing or measuring their actual effectiveness. It also emphasizes that hedge accounting should apply to all hedging activities to ensure consistent recognition of financial impacts.

TRANSITIONAL PROVISIONS - 34 This policy is effective January 1, 2011 and should be applied retroactively with restatement of prior periods except as outlined below. - 35 Any item of property, plant and equipment, construction work-in-prog...

AI summary This section outlines transitional provisions for applying the new policy retroactively from January 1, 2011, with specific guidance on handling prior period items, foreign exchange rate adjustments, and transitional adjustments related to derivatives and regulatory assets.

ACCRUED INTEREST ON LONG-TERM DEBT - 8120

AI summary The document discusses the accrued interest on long-term debt, focusing on financial accounting and regulatory considerations related to Nova Scotia Power Inc. and Nova Scotia Power Corporation.

ACCOUNTS PAYABLE AND ACCRUED CHARGES - 8220

AI summary The document discusses accounts payable and accrued charges related to Nova Scotia Power Inc. and other entities, highlighting financial obligations and accounting standards relevant to the regulatory proceeding.

INCOME TAXES PAYABLE - 8300 01 Includes all income taxes payable to both levels of government.1 1 Please refer to NSPI Accounting Policy and Procedures Manual Section 5900.

AI summary The document outlines income taxes payable to both levels of government, referencing the NSPI Accounting Policy and Procedures Manual Section 5900 for detailed information.

DIVIDENDS PAYABLE - 8400 - 01 Includes all accrued and/or declared dividends on both common and preferred shares. 1 - 02 Dividends payable for cumulative preferred shares are in accordance with the terms of the preferred shares. 1 Please r...

AI summary The section discusses dividends payable, including accrued and declared dividends on common and preferred shares, with specific reference to cumulative preferred shares and their accordance with preferred share terms. It also directs readers to NSPI Accounting Policy and Procedures Manual 7120 and 7320 for further details.

ncial numbers will be available in both C-GAAP and US-GAAP for the Board and interested parties. That should provide the opportunity for parties to gain assurance that the adjustments are transparent. Tracking and recording only US-GAAP ba...

AI summary Nova Scotia Power Inc. (NSPI) requests the Board to accept restated 2009 and 2010 financial statements under US-GAAP as sufficient for comparability, arguing that maintaining C-GAAP for 2011 would create confusion and increase costs. NSPI highlights the benefits of full US-GAAP adoption for transparency and understanding of regulated statements.

APPLICATION - 03 After the separation of the regulated utility business of Nova Scotia Power Inc. ("NSPI") and the other businesses of Emera Inc. 1 , NSPI segregated its financial data from its affiliates using the "Multi-Org" functionalit...

AI summary NSPI has segregated its financial data from affiliates using Oracle's 'Multi-Org' functionality, creating a separate account structure. This allows for better financial tracking, decentralization of tasks, and integration of the database for streamlined purchasing and accounting processes.

FINANCIAL REPORTING SYSTEM ORACLE SYSTEM OVERVIEW - 3000

AI summary This section provides an overview of the Oracle financial reporting system used by Nova Scotia Power Inc. (NSPI), highlighting its role in financial data management and compliance with accounting standards such as US-GAAP and C-GAAP.

OVERVIEW - 03 The account structure utilized by NSPI has been designed to address operational, financial and regulatory requirements. Accordingly, the account structure meets US generally accepted accounting principles financial reporting...

AI summary NSPI's account structure is designed to meet operational, financial, and regulatory requirements, including compliance with US GAAP, UARB requirements, and internal needs.

GENERAL 01 Generic accounts simply provide a higher level summary of Nova Scotia Power Inc.'s ("NSPl's or the Company's") asset accounts than the break down furnished by the capital and intangible activities. The format conforms to the acc...

AI summary The document discusses the use of generic accounts by Nova Scotia Power Inc. (NSPI) for summarizing asset accounts, which aligns with the Federal Energy Regulatory Commission's (FERC) format. A cross-reference table in NSPI's Accounting Policy and Procedures Manual 3350A is mentioned for reporting to the Nova Scotia Utility and Review Board (UARB).

POLICY 02 The Company should use generic accounts to summarize its asset activity codes for filings with the UARB.

AI summary The document suggests that the Company should use generic accounts to summarize its asset activity codes for filings with the UARB.

GENERIC ACCOUNT DESCRIPTIONS

AI summary This section provides generic account descriptions relevant to the regulatory proceeding, likely involving accounting standards and financial reporting practices.

03 Debt Issue Costs The issue of long-term debt is usually an involved process in which the Company may retain the services of brokers, lawyers and auditors. Since the cost of using these services can be significant and provide future bene...

AI summary The document discusses how long-term debt issuance costs, including those for brokers, lawyers, and auditors, are treated under US GAAP. These costs are deferred and amortized over the life of the debt, while premiums, discounts, and commissions are also deferred. Other costs are expensed in account 084 bank charges.

ASSETS

AI summary The section titled 'ASSETS' provides an overview of asset-related information, including financial accounting standards, regulatory frameworks, and utility operations. It highlights key entities and regulatory bodies involved in asset management and compliance.

ASSETS

AI summary The section titled 'ASSETS' provides an overview of asset-related information, including financial accounting standards, regulatory frameworks, and utility operations. It highlights key entities and regulatory bodies involved in asset management and compliance.

COST COMPONENTS AND ELEMENTS - 6140

AI summary The document outlines the cost components and elements relevant to the Nova Scotia Power Inc. (NSPI) regulatory proceeding, covering accounting standards, fuel adjustment mechanisms, and other financial considerations.

COST COMPONENTS AND ELEMENTS .. 6140

AI summary The text discusses cost components and elements related to a regulatory proceeding, focusing on financial and operational aspects of utility services. It includes references to accounting standards, regulatory bodies, and cost adjustment mechanisms.

COST COMPONENTS AND ELEMENTS - 6140

AI summary The document outlines the cost components and elements related to the Nova Scotia Power Inc. (NSPI) and includes references to accounting standards, regulatory bodies, and financial mechanisms such as the Fuel Adjustment Mechanism (FAM).

CALCULATION OF OVERHEAD APPLICATION RATE 12 Once the Capital-related Overhead Expenses have been determined, the overhead application rate can be calculated. The application rate is simply the quotient, expressed as a percentage, of the Ca...

AI summary The overhead application rate is calculated by dividing Capital-related Overhead Expenses by contract costs, expressed as a percentage. A reference is made to NSPI's Accounting Policy and Procedures Manual Section 3100 for further details on the general ledger account structure.

APPLICATION OF ADMINISTRATIVE OVERHEAD (CONTRACTED ASSETS) - 6235

AI summary The document discusses the application of administrative overhead for contracted assets, with references to Nova Scotia Power Inc. and the Nova Scotia Utility and Review Board. It includes technical terms related to accounting and financial standards, such as US-GAAP and C-GAAP, and mentions various financial and operational components like Accumulated Other Comprehensive Income and Allowance for Funds Used During Construction.

REVIEW OF OVERHEAD APPLICATION RATE 13 The overhead application rate will be reviewed on an annual basis by Capital Accounting to assess its reasonableness.

AI summary The overhead application rate will be reviewed annually by Capital Accounting to ensure its reasonableness.

APPLICATION OF OVERHEAD 14 The overhead charged to a particular project is determined by multiplying the contract costs charged to the project by the appropriate overhead application rate. The charge is debited to a Capital Work Order whil...

AI summary The overhead charged to a project is determined by multiplying the contract costs by the appropriate overhead application rate, with the charge debited to a Capital Work Order and credited to Operating, Maintenance and General Expenses.

ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION - 6240

AI summary The document discusses the Allowance for Funds Used During Construction (AFUDC), including its calculation and application in the context of construction work in progress (CWlp) and power plant (PP) projects. It references accounting standards and regulatory considerations related to capital expenditures and financial reporting.

05 Criteria for Application AFUDC is applied to all capital work orders with the following exceptions: - a. work orders with a construction period less than two months (e.g. routine work orders); - b. work orders used to purchase assets th...

AI summary The document outlines the exceptions to the application of AFUDC (Allowance for Funds Used During Construction) to capital work orders, including short construction periods, immediate in-service assets, land purchases, fully customer-funded projects, deferred work orders, and retirement work orders.

ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION .. 6240

AI summary The document discusses the Allowance for Funds Used During Construction (AFUDC) in the context of Nova Scotia Power's accounting practices, including its relationship with the Accumulated Other Comprehensive Income (AOCI), and the use of the Oracle relational database system for tracking construction work in progress (CWlp).

06 Basis for Application The application base for AFUDC includes the cumulative total of all direct and indirect charges to work orders, but excludes all AFUDC related to spending subsequent to January 1 or July 1, whichever is the latest....

AI summary The application base for AFUDC includes cumulative direct and indirect charges to work orders, excluding AFUDC related to spending after January 1 or July 1, whichever is later. This exclusion leads to semi-annual compounding of AFUDC.

07 Timing of Application AFUDC application begins in the month in which a work order receives charges and continues until the month the work order becomes operational plant. On most work orders, AFUDC is applied at the full rate to cumulat...

AI summary The AFUDC application process starts when a work order receives charges and continues until the work order becomes operational. For most work orders, AFUDC is applied at the full rate to cumulative charges each month. For major capital work orders, the start and operational dates are considered in the AFUDC calculation.

08 Calculation of AFUDC Rate The rate used to capitalize AFUDC is the Company's weighted average cost ofcapital before tax. The rate is calculated annually, in advance, by dividing the forecasted annual interest expense, preferred dividend...

AI summary The AFUDC rate is calculated annually using the Company's weighted average cost of capital before tax, derived from forecasted interest expense, preferred dividends, and net earnings. This rate is then divided by twelve to determine the monthly AFUDC rate.

PURCHASE PRICE DISCREPANCY - 6250

AI summary The document titled 'Purchase Price Discrepancy - 6250' appears to be related to a discrepancy in purchase price, likely involving Nova Scotia Power Inc. (NSPI) and potentially involving financial accounting standards and regulatory processes.

DEFINITION 01 Purchase price discrepancy is the excess of the cost of acquired assets over the net of the amount assigned to assets acquired and liabilities assumed as approved by the Nova Scotia Utility and Review Board ("UARB").

AI summary The term 'purchase price discrepancy' refers to the difference between the cost of acquired assets and the net value of assets acquired and liabilities assumed, as approved by the Nova Scotia Utility and Review Board.

POLICY - 02 Purchase price discrepancies should be recorded as assets. - 03 Purchase price discrepancies are not included in rate base1. 1 Please refer to NSPI Accounting Policy and Procedures Manual 1520 for details.

AI summary The text discusses the treatment of purchase price discrepancies, stating they should be recorded as assets but are not included in the rate base. A reference is made to the NSPI Accounting Policy and Procedures Manual 1520 for further details.

ASSET RETIREMENTOBLIGATIONS (ARO) - 6320

AI summary The document discusses Asset Retirement Obligations (ARO) under the Nova Scotia Utility and Review Board (UARB). It includes references to accounting standards and related financial mechanisms, though specific details are not provided in the text.

GENERAL - 02 The present value of this estimated future expenditure is recognized as a liability with an equivalent amount added to the carrying amount of the associated fixed asset consistent with FASB ASC 410-20. - 03 The Nova Scotia Uti...

AI summary The text discusses the accounting treatment of future expenditures related to the removal of long-lived assets, referencing FASB ASC 410-20 and the depreciation order issued by the Nova Scotia Utility and Review Board effective January 1, 2004. It outlines how differences between the UARB-approved depreciation expense and GAAP calculations are recognized as a regulated asset.

POLICY - 04 A liability for an asset retirement obligation should be recognized when a reasonable estimate of fair value can be made. 2 - 05 Upon initial recognition, the carrying amount of the related long-lived asset will be increased by...

AI summary The text discusses the recognition and accounting treatment of asset retirement obligations, including the initial recognition of liabilities, adjustments to long-lived assets, and the systematic allocation of retirement costs over the asset's useful life.

PROCEDURE 03 Assets that are identified as being redundant are evaluated to assess whether they should be returned to inventory, retired 2 or transferred to another location 3 . 1 Please refer to NSPI Accounting Policy and Procedures Manua...

AI summary The document outlines the procedure for evaluating redundant assets, which may be returned to inventory, retired, or transferred to another location, with references to specific NSPI accounting policy manuals for detailed guidance.

POLICY - 05 Assets that are not both used and useful should be classified in one of the following categories: - a. Not used and not useful; - b. Not used but useful for standby purposes; or - c. Not used but useful for future service.

AI summary The text outlines the classification of assets that are not both used and useful, specifying three categories: not used and not useful, not used but useful for standby purposes, and not used but useful for future service.

NOT USED AND NOT USEFUL - 06 Assets meeting the following criteria are included in this category: - a. they do not currently provide service to the consuming public; and - b. they are not expected to provide a benefit to customers in the f...

AI summary Assets that are not currently providing service or expected to benefit customers in the future should be written off. However, if the write-off is significant and approved by the Nova Scotia Utility and Review Board (UARB), the cost can be amortized over five years or a reasonable period, with unamortized costs remaining in the rate base and capital costs expensed as incurred.

NOT USED BUT USEFUL FOR FUTURE USE - 12 Assets meeting the following criteria are included in this category: - a. they do not currently provide service to the consuming public; and - b. they are expected to be used and useful in providing...

AI summary This section discusses the treatment of assets not currently in service but expected to be used in the future. It outlines how costs should be matched to future periods, the handling of excess costs, and the deferral and amortization of depreciation until the assets are returned to service.

LONG LIVED ASSETS TO BE DISPOSED OF BY SALE - 6360

AI summary The document discusses the disposal of long-lived assets through sale, likely involving accounting and regulatory considerations related to asset management and financial reporting.

POLICY - 03 Long-lived assets identified as being disposed of by sale, shall be classified as held for sale in the period the criteria for long-lived assets to be disposed of by sale are met. - 04 A long-lived asset classified as held for...

AI summary The text outlines accounting policies for long-lived assets classified as held for sale, including measurement, depreciation, and reclassification procedures. It references FASB ASC standards and NSPI's internal accounting policy manual.

ACCUMULATED DEPRECIATION - 6400

AI summary The document discusses accumulated depreciation under account 6400, likely related to the depreciation of long-term assets. It includes references to Nova Scotia Power Inc. (NSPI) and accounting standards such as US-GAAP and C-GAAP.

POLICY 04 Accumulated depreciation should be netted against the assets so that the assets are reported at their net book values. - 05 At a particular point in time, the balance in the accumulated depreciation accounts is comprised of the f...

AI summary The text discusses the proper accounting treatment of accumulated depreciation, including its components and the need to adjust depreciation rates when assets are over or under depreciated. It also references NSPI's and NSPl's accounting policy manuals for further details.

RETIREMENT AND DISPOSAL OF CAPITAL ASSETS - 6420

AI summary The document discusses the retirement and disposal of capital assets, including accounting standards, asset management, and related financial mechanisms. It highlights the importance of proper accounting practices and regulatory oversight in managing capital assets.

1 FASB ASC 410-20-20 RETIREMENT AND DISPOSAL OF CAPITAL ASSETS - 6420

AI summary This section of the document addresses the retirement and disposal of capital assets under FASB ASC 410-20-20, which outlines accounting standards for the retirement and disposal of long-lived assets.

PROCEDURES - 09 For retirements of property, plant and equipment other than land ,the original cost plus any costs of removal less salvage proceeds is charged to accumulated depreciation, with no immediate gain or loss recognized. - 10 A r...

AI summary The procedures outline how retired property, plant, and equipment (excluding land) are accounted for, including charging the original cost plus removal costs less salvage proceeds to accumulated depreciation. Retirement work orders are required for significant asset retirements and must follow the same approval procedures as new capital work orders. Salvage proceeds, including insurance claims, are handled with specific accounting treatments.

RETIREMENT AND DISPOSAL OF CAPITAL ASSETS - 6420 13 When a work order has received final cost approval, an entry is made for the final disposition of charges to capital assets in service and accumulated depreciation.

AI summary The document discusses the process of retiring and disposing of capital assets, specifying that when a work order receives final cost approval, an entry is made for the final disposition of charges to capital assets in service and accumulated depreciation.

Retirement of Assets Other than Land - 14 When assets are disposed of, a retirement work order is set up or retirement accounts are set up within a capital work order. - 15 Asset retirement obligations have been set up for the decommission...

AI summary The document outlines procedures for retiring assets other than land, including setting up retirement work orders or accounts within capital work orders. It also mentions the setup of asset retirement obligations for decommissioning, aligned with FASB ASC 410-20 standards for initial and subsequent measurement.

Retirement of Land - 16 When land is disposed of, retirement accounts within a work order are used to remove its cost from the capital asset records. - 17 If the proceeds from the sale of land are greater than the cost of the land plus the...

AI summary The document discusses the retirement of land, outlining that when land is disposed of, retirement accounts are used to remove its cost from capital asset records. A gain or loss is recognized based on the comparison of sale proceeds to the land's cost plus retirement costs.

GAIN OR LOSS ON DISPOSITION OF CAPITAL ASSETS - 6440

AI summary The document discusses the gain or loss on the disposition of capital assets, likely involving accounting standards and financial reporting practices related to asset retirement obligations and capital expenditures.

PROCEDURES 03 Please refer to NSPl's Accounting Policy & Procedures Manual Section 6420 for the procedures to record the retirement of capital assets.

AI summary The document directs readers to NSPl's Accounting Policy & Procedures Manual Section 6420 for procedures related to the retirement of capital assets.

POLICIES - 01 Cash should be presented in the financial statements in accordance with FASB ASC Section 305- 10. - 02 Items under the caption "Cash" on the financial statements, the Company should include petty cash funds and the net total...

AI summary The document outlines policies for the presentation of cash in financial statements, including the inclusion of petty cash, handling of bank overdrafts, and separate disclosure of restricted cash items in accordance with FASB ASC Section 305-10.

DEFINITIONS - 01 Receivables are claims held against others for money, goods, or services. They are further classified as trade receivables and non-trade receivables. Trade receivables are amounts owed by customers for goods and services r...

AI summary This section defines receivables, including trade and non-trade receivables, and explains the allowance for doubtful accounts. It also notes that receivables are classified as financial instruments in accounting.

POLICIES - 04 All receivables (trade and non-trade) are classified as loans and receivables and follow an amortized cost model. Receivables that have a relatively short period (less than one year) of time to maturity are not adjusted to re...

AI summary NSPI classifies all receivables as loans and receivables using an amortized cost model, with short-term receivables not adjusted for discounting due to minimal impact. Receivables are recorded at fair value upon transaction occurrence, and an allowance for doubtful accounts is required to adjust balances to expected collectible amounts.

07 Trade Receivables Electric service accounts receivable are generated by sales and billings to customers for power consumed. The receivables resulting from the billings system is recorded in two general ledger accounts to facilitate acco...

AI summary Electric service accounts receivable are generated from customer billings for power consumed. These receivables are recorded in two general ledger accounts to facilitate analysis and improve internal control.

10 Nontrade Miscellaneous Receivables Nontrade miscellaneous receivables mainly arise from sales of surplus material and equipment and returns to suppliers. Interest charges apply to past due balances. The general ledger accounts used to r...

AI summary Nontrade miscellaneous receivables are generated from the sale of surplus materials and equipment and returns to suppliers. These receivables are recorded in specific general ledger accounts, and interest charges apply to overdue balances.

12 Allowance for Doubtful Accounts The allowance for doubtful accounts is calculated and adjusted monthly to reflect the Company's best estimate of uncollectible receivables. Large industrial and commercial accounts are assessed for collec...

AI summary The allowance for doubtful accounts is calculated monthly based on the Company's best estimate of uncollectible receivables. Large industrial and commercial accounts are assessed individually, while others are analyzed using aged listings and historical data.

UNBILLED REVENUE RECEIVABLE - 6650

AI summary The document discusses the Unbilled Revenue Receivable (6650) related to Nova Scotia Power Inc. (NSPI) and includes references to accounting standards and regulatory processes, though specific details are not provided due to the presence of an image.

POLICIES - 02 Inventor ies are measured at the lower of cost and market. Market means current replacement cost provided that market does not exceed the net realizable value and market shall not be less than net realizable value reduced by...

AI summary The document outlines accounting policies for inventory valuation, stating that inventories are measured at the lower of cost and market, with market defined as current replacement cost not exceeding net realizable value, and not less than net realizable value reduced by a normal profit margin. These policies align with FASB ASC Topic 330.

Materials - 04 Materials are accounted for using a computerized perpetual inventory system. Purchases are recorded at cost and issues are charged to capital or operating accounts at average cost. - 05 Physical counts are performed on a rot...

AI summary The document outlines the accounting practices for materials, including the use of a perpetual inventory system, cost recording, periodic physical counts, and the application of interest charges on inventory based on the company's short-term borrowing costs.

Fuel - 07 Fuel inventories, consisting of oil, coal and fuel additives, are accounted for using the weighted average cost method. This method assigns costs between fuel inventory on hand and fuel consumed on the assumption that fuel is con...

AI summary The document outlines the accounting methods used for fuel inventories, including the weighted average cost method, monthly fuel reports, and the treatment of fuel purchases not yet invoiced. These practices ensure accurate financial reporting of fuel costs and inventory balances.

DEFINITION 01 Current assets that will benefit more than one period will have their cost allocated over the periods they benefit.

AI summary The text defines the allocation of current assets that provide benefits over multiple periods, indicating that their costs should be distributed across the periods they benefit.

POLICIES - 02 Expenses paid on an annual basis should be recorded as prepaid assets and amortized on a straightline basis over the months to which the expense applies. - 03 Prepaid expenses should be presented in the financial statements i...

AI summary The document outlines policies for recording and presenting prepaid expenses annually, specifying that they should be amortized straight-line over the relevant months and presented as current assets in accordance with FASB standards.

POLICIES - 01 The Company accrues a liability for termination costs associated with severance programs consistent with the requirements of FASB ASC Topic 420 - Exit or Disposal Cost Obligations orASC Topic 712 - Compensation - Nonretiremen...

AI summary The document outlines the Company's accounting policy for accruing liabilities related to termination costs under FASB ASC Topics 420 and 712. It specifies when liabilities are recognized, how costs are expensed or deferred based on their impact on revenue and rate stability, and the conditions under which costs are amortized over a three-year period.

DEFERRED CHARGES TERMINATION COSTS - 6930 06 Regulatory decisions allowing the recovery of deferred costs through future rates create a future economic benefit or asset equal to the deferred amounts. Amortization matches the cost of that a...

AI summary The text discusses the accounting treatment of deferred charges related to severance programs, including when costs should be accrued, how they are recorded, and the amortization process over three years to align with future cost savings.

DEFINITION - 01 Start-up costs include all expenses incurred by Nova Scotia Power Inc. ("NSPI") for the development of business opportunities outside the Company's normal sphere of regulated generation and delivery of electricity. Start-up...

AI summary This section defines start-up costs for Nova Scotia Power Inc. (NSPI) as expenses incurred for business opportunities outside its regulated electricity generation and delivery activities, referencing FASB ASC 720-15-20. It also notes that other costs should be accounted for according to NSPI's Accounting Policy and Procedures Manual.

PROCEDURES 05 All new business costs should be charged to an operating project. An Operating Project Approval Form can be obtained from Corporate Accounting Services ("CAS"). CAS will assign a new project number to collect costs associated...

AI summary The document outlines procedures for charging new business costs to an operating project, requiring an Operating Project Approval Form obtained from Corporate Accounting Services, which assigns a project number to track associated costs.

- 6940A - An overhead charge will apply to labour costs of Nova Scotia Power Inc. ("NSPI") employees outside of the corporate support groups relating to affiliate or non-regulated activities. This charge is designed to recover all administ...

AI summary An overhead charge is applied to the labour costs of Nova Scotia Power Inc. (NSPI) employees outside of corporate support groups for affiliate or non-regulated activities. This is to recover administrative costs not specifically identifiable with these activities, ensuring ratepayers are not adversely affected. The overhead application rate is calculated using various OM&G expense accounts and should be reviewed annually by Corporate Accounting Services.

OVERHEAD APPLICATION RATE 04 The overhead application rate is calculated based on total OM&G expenses identified above divided by total operating labour.

AI summary The overhead application rate is determined by dividing total OM&G expenses by total operating labour. This calculation is used to allocate overhead costs appropriately within the organization.

ACCOUNTING FOR FINANCIAL INSTRUMENTS AND HEDGES - 6960 POWia

AI summary The document discusses the accounting for financial instruments and hedges under the Nova Scotia Power Inc. (NSPI) proceeding, with a focus on compliance with the Financial Accounting Standards Board (FASB) and the Accounting Standards Codification (ASC).

OBJECTIVE - 01 The Company's financial instruments will adhere to the requirements of US Generally Accepted Accounting Principles (US GAAP) including ASC 815 - Derivatives and Hedging. - 02 This policy sets out general guidance for account...

AI summary The Company will follow US GAAP, specifically ASC 815, for its financial instruments and hedging activities, as outlined in this policy.

DEFINITIONS - 03 Derivative instruments designed to mitigate the risk of the Company's exposure to changes in market prices of, for example, natural gas, oil, coal & other commodities, interest rates, and foreign currency exchange rates, w...

AI summary The text defines key financial and accounting terms related to derivative instruments, hedging activities, and fair market value. It explains how derivatives are used to mitigate financial risks and outlines the principles of hedge accounting.

ACCOUNTING FOR FINANCIAL INSTRUMENTS AND HEDGES - 6960 Mark-to-Market Accounting: Under the mark-to-market method of accounting, all financial instruments, other than instruments in a valid hedging relationship, are recorded at fair market...

AI summary The document discusses the mark-to-market accounting method, which requires financial instruments not in a valid hedging relationship to be recorded at fair market value through net earnings.

POLICY - The Company engages in risk management activities to manage the Company's exposure to changes in the market prices of commodities, foreign exchange and interest rates. - The Company does not use derivative instruments for trading...

AI summary The Company engages in risk management activities to manage exposure to commodity prices, foreign exchange, and interest rates, using derivative instruments for risk management purposes rather than trading or speculation. The Company defers the impact of these instruments to regulatory assets or liabilities and does not test the effectiveness of its hedges, assuming they are 100% effective.

ACCOUNTING FOR FINANCIAL INSTRUMENTS AND HEDGES - 6960 PO",.. - a. The front office should ensure the hedging activity is in compliance with the appropriate risk management policy; - b. The front office should document the specific risk ex...

AI summary The text outlines accounting procedures for financial instruments and hedges, including documentation requirements, fair value recognition, treatment of gains and losses, and amortization of fees. These guidelines ensure compliance with risk management policies and regulatory standards.

ACCOUNTING FOR FINANCIAL INSTRUMENTS AND HEDGES - 6960 balance sheet or income statement item that would have been used had the hedged item still existed in the month the underlying hedging item settles. - If the timing of the hedged item...

AI summary This document outlines the accounting policy for financial instruments and hedges, focusing on the treatment of hedging relationships, the handling of gains or losses when hedging items are settled, and the responsibilities of Front Office and Back Office Staff in ensuring compliance with the policy.

TRANSITIONAL PROVISIONS - This policy is effective January 1, 2011 and should be applied retroactively with restatement of prior periods except as outlined below. - Any item of property, plant and equipment, construction work-in-progress a...

AI summary This section outlines transitional provisions for applying the new policy retroactively from January 1, 2011, including handling of prior period asset valuations, foreign exchange adjustments, and deferral of transitional expenses.

SHAREHOLDERS' EQUITY COMMON SHARES - 7100

AI summary The document section discusses shareholders' equity related to common shares under the category 7100, though the content is not fully visible due to an image placeholder.

DEFINITION - 01 The authorized common share capital of the Company consists of an unlimited number of common shares, no par value, one vote per share on all matters to be voted on by shareholders and entitled to receive dividends as declar...

AI summary The document defines the authorized common share capital of the Company, which consists of an unlimited number of common shares with no par value, one vote per share, and entitlement to dividends as declared by the Board of Directors. Common shares are reported as issued and outstanding in the financial statements.

POLICY 01 Dividends to common shareholders should be recorded as declared by authorization of an approved Board of Directors resolution.

AI summary The document states that dividends to common shareholders should be recorded based on the authorization of an approved Board of Directors resolution.

DEFINITION 01 The authorized preferred share capital consists of an unlimited number of first and second preferred shares issuable in series. These shares shall have the designations, rights, privileges, restrictions and conditions as dete...

AI summary The authorized preferred share capital of the company consists of an unlimited number of first and second preferred shares, which can be issued in series with designations, rights, privileges, restrictions, and conditions determined by the Board of Directors.

PROCEDURES 03 Proceeds from the issue of preferred shares are recorded in general ledger account 770 - Preferred Shares.

AI summary The document states that proceeds from the issuance of preferred shares are recorded in general ledger account 770 - Preferred Shares.

POLICY 01 Dividends to preferred shareholders and the associated income tax expense (benefit) are accrued as declared and the dividends are paid based on approved Board of Directors' resolutions. - 02 Preferred dividends are accrued as dec...

AI summary The text outlines the accounting treatment for preferred shareholder dividends, including accruals based on declared dividends and adjustments for income tax expenses and benefits related to these dividends.

POLICY - 01 Long-term debt issued by the Company is reported net of long-term debt payable in one year, as long-term debt on the balance sheet of its financial statements. Detail of the long-term debt issued by the Company are reported in...

AI summary The document outlines the accounting treatment of long-term debt and related financial instruments, including the reporting of commercial paper, debentures, and medium-term notes, as well as the deferral and recovery of debt defeasance costs by the Company, with approval from the Nova Scotia Utility and Review Board.

POLICY 01 Interest on long-term debt should be accrued on a 30-day month basis using the principal outstanding and prevailing rate for each debt instrument.

AI summary The text discusses the accrual of interest on long-term debt, specifying that it should be calculated on a 30-day month basis using the principal outstanding and prevailing rate for each debt instrument.

PROCEDURES 02 The interest expense for each debt instrument is credited to this account and the resulting payments, as they occur, are charged to this account.

AI summary The text describes the accounting treatment of interest expenses for debt instruments, specifying that these expenses are credited to an account and subsequent payments are charged to the same account as they occur.

POLICY 01 Short-term credit requirements used to maintain the Company's bank accounts as at period end should be presented as "Debt due within one year" on the Balance Sheet with the exception of shortterm credit where the Company has the...

AI summary The document specifies that short-term credit used to maintain the Company's bank accounts should be classified as 'Debt due within one year' on the Balance Sheet, unless the Company intends and has the ability to refinance the obligation for more than one year.

ACCOUNTS PAYABLE AND ACCRUED CHARGES - 8220

AI summary The document discusses accounts payable and accrued charges related to Nova Scotia Power Inc. and includes references to the Fuel Adjustment Mechanism and the Nova Scotia Utility and Review Board.

INCOME TAXES PAYABLE - 8300 01 Includes all income taxes payable to both levels of government. 1 1 Please refer to NSPI Accounting Policy and Procedures Manual Section 5900.

AI summary The text discusses income taxes payable to both levels of government, referencing the NSPI Accounting Policy and Procedures Manual Section 5900 for detailed information.