Uniform System of Accounting for Georgian Gas Market Regulated Companies

The system is designed to ensure the coherence of data, avoid double counting, and detect anti-competitive effects. The Uniform System of Accounting (USoA) was approved by the Georgian National Energy and Water Supply Regulatory Commission (GNERC) in December 2018 and was set to be mandatory from January 2019. The USoA includes a Regulatory Chart of Accounts, instructions to the chart, and guidelines for the reporting of financial data. The system is based on the International Financial Reporting Standards (IFRS) and is consistent with the Tariff Methodology adopted by GNERC. The USoA is designed to provide a sound basis for the recording of expenses and revenues of rate-regulated gas utilities in Georgia. The accounting guidelines for the Georgian gas market are divided into three parts: Revenue, Cost of Gas and Gas Services, and Expenses. Part I, Revenue, regulates the definition, measurement, and recognition of revenue for regulated companies. Part II, Cost of Gas and Gas Services, regulates the definition, measurement, and recognition of cost and cost centers for regulated companies. Part III, Expenses, regulates the definition, measurement, and recognition of expenses for regulated companies. The Regulated Revenue under the USoA is defined as the gross inflow of economic benefits during the tariff regulatory period arising in the course of the regulated gas market activities. The Regulatory Value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing gas market participants in accordance with the regulation set by the gas sector regulatory body. The accounting guidelines for the Georgian gas market are designed to be applied for the recording, maintaining, and reporting of financial data using the Unified Regulatory Chart of Accounts set by GNERC. The guidelines are intended to provide a sound basis for the recording of expenses and revenues of rate-regulated gas utilities in Georgia and to ensure the coherence of data, avoid double counting, and detect anti-competitive effects. The USoA has been shown to be a good tool for the financial management of utilities, providing better cost control and insights on the efficiency of companies. The system has been successful in the electricity sector and is now being applied to the gas sector. The accounting guidelines for the Georgian gas market are an essential part of the USoA and are designed to provide a sound basis for the recording of expenses and revenues of rate-regulated gas utilities in Georgia. The guidelines are consistent with the Tariff Methodology adopted by GNERC and are based on the International Financial Reporting Standards (IFRS). The USoA is designed to provide a sound basis for the recording of expenses and revenues of rate-regulated gas utilities in Georgia and to ensure the coherence of data, avoid double counting, and detect anti-competitive effects.