Question: What is the proper accounting and reporting for amounts collected under an approved RD&D cost adjustment provision and paid to the Gas Research Institute (GRI) authorized by Opinion No. 11 of the Federal Energy Regulatory Commission?
Answer: Gas companies with Research, Development, & Demonstration adjustment provisions providing for surcharges to finance GRI funding requirements should record the surcharge in the appropriate operating revenue account for the class of customer served. Upon recording of the revenues, the company should establish a liability for payment to GRI for surcharge collections. The amount of the liability should be charged first to Account 188, Research, development, and demonstration expenditures and concurrently expensed to Account 930.2, Miscellaneous general expenses.
Companies should maintain necessary subsidiary records to separately identify the collections and payments to GRI and should separately disclose the GRI transactions on pages 572 and 572A of the Annual Report Form 2.
L. H. Drennan, Jr.
Effective: January 1, 1979