Recently, the Ministry of Finance ("MOF") has drafted the Cost Accounting System for Products of Enterprises---the Power Grid Operation Industry (Draft for Comment) (the "Draft for Comment") to solicit comments from units concerned before July 10, 2017.
The Draft for Comment is comprised of four sections, namely, the general provisions, targets subject to the products' cost accounting, products' cost accounting items, and products' cost accumulation, allocation and carry-over. The Draft for Comment clearly states that for power grid operators, objects subject to the products' cost accounting should be the power transmission and distribution services, with the product category determined by the voltage class. Products' cost accounting items applicable to power grid operators mainly include the depreciation of fixed assets, direct material cost, direct labor cost and other business operation expenses. Furthermore, the Draft for Comment stipulates that power transmission and distribution costs should be allocated and carried forward on a monthly basis, so as to compute the costs of various voltage classes by directly including or allocating such costs as the Accounting Item "Cost". Moreover, the Draft for Comment points out three major issues.