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The document ceased to be valid since  June 13, 2020 according to Item 2 of the Order of the Minister of national economy of the Republic of Kazakhstan of May 22, 2020 No. 42

I.O.'S ORDER OF THE CHAIRMAN OF THE AGENCY OF THE REPUBLIC OF KAZAKHSTAN ON REGULATION OF NATURAL MONOPOLIES AND PROTECTION OF THE COMPETITION

of December 12, 2003 No. 312-OD

About approval of Rules of conducting separate accounting of the income, costs and the involved assets by telecom operators on regulated types of service of the telecommunications and services which are technologically connected with provision of services of telecommunications

(as amended on 24-07-2015)

According to subitem 7-1) of article 7 of the Law of the Republic of Kazakhstan "About natural monopolies and the controlled markets" and the subitem 19) of Item 18 of the Regulations on the Ministry of national economy of the Republic of Kazakhstan No. approved by the order of the Government of the Republic of Kazakhstan of September 24, 2014 1011, I ORDER:

1. Approve the enclosed Rules of conducting separate accounting of the income, costs and the involved assets by telecom operators on regulated types of service of the telecommunications and services which are technologically connected with provision of services of telecommunications (further - Rules).

2. To the subjects of natural monopoly providing regulated types of service of the telecommunications and services which are technologically connected with provision of services of telecommunications (further - the Subject):

1) to develop and approve techniques of conducting separate accounting of the income, costs and the involved assets by telecom operators on types of service of the telecommunications regulated according to the legislation on natural monopolies and the antitrust law with provision terms in the authorized body exercising control and regulation of activities in the field of natural monopoly:

by August 15, 2005 the first reporting under activities for the first half of the year 2005;

by February 15, 2006 the first reporting under types of regulated services for the second half of the year 2005;

1-1) upon the demand of authorized body to provide the financial reporting and other necessary information on the paper or electronic medium by placement of the electronic document through information system of authorized body in the terms established by authorized body which cannot be less than five working days from the date of receipt of the relevant requirement by the Subject;

1-2) to book statutory annual audit by auditing organizations for subjects of the natural monopolies which are joint-stock companies;

1-3) to place the audit report and the annual financial reporting on the Internet resource no later than five calendar days from the moment of receipt of the audit report and approval of the financial reporting and to publish in the periodic printing editions distributed in the corresponding territory of administrative and territorial unit in which the Subject performs activities no later than thirty calendar days from the moment of approval of the annual financial reporting according to the procedure, established by the legislation of the Republic of Kazakhstan.

3. Telecom operators perform separate accounting of the income, costs and the involved assets on each regulated type of service, according to the list of regulated services, and also services on which are applied regulated by the state of the price (rates) approved by the order of the Minister of national economy of the Republic of Kazakhstan of December 30, 2014 No. 186, (registered in the Register of state registration of regulatory legal acts for No. 10469 (further - regulated services).

4. I reserve control of execution of this order.

5. This order becomes effective since January 1, 2004, except for Item 32 of Rules which becomes effective since January 1, 2005.

Acting Chairman

It is approved

The chairman of the Agency of the Republic of Kazakhstan on informatization and communication

December 13, 2003

 

Approved by the Order of the Chairman of the Agency of the Republic of Kazakhstan on regulation of natural monopolies and protection of the competition against December 12, 2003 No. 312-OD

Rules of conducting separate accounting of the income, costs and the involved assets by telecom operators on regulated types of service of the telecommunications and services which are technologically connected with provision of services of telecommunications

1. General provisions

These rules of conducting separate accounting of the income, costs and the involved assets by telecom operators (further - Rules) determine the basic principles of conducting separate accounting, procedure for the organization and implementation of separate accounting by telecom operators which according to the legislation of the Republic of Kazakhstan are recognized subjects of natural monopoly by regulated types of service of the telecommunications and services which are technologically connected with provision of services of telecommunications.

2. The purpose of conducting separate accounting is determination of the income, costs and the involved assets by types of regulated services for establishment of economically reasonable prices (rates) approved or approved by the authorized state body exercising control and regulation of activities in spheres of natural monopolies (further - authorized body).

3. Telecom operators perform separate accounting of the income, costs and the involved assets on each regulated type of service, according to the list of regulated services, and also services on which are applied regulated by the state of the price (rates) approved by the Government of the Republic of Kazakhstan (further - regulated services).

4. Separate accounting represents system of collection and generalization of information on the income, costs and the involved assets separately by each type of regulated services of telecommunications, and also periodic creation and representation by telecom operators to authorized body based on such information of income statements, expenses and the involved assets by each type of regulated services according to these rules.

5. Basic principles of separate accounting:

1) priority of direct reference in case of possibility of direct reference of the income, costs and the involved assets on the corresponding activities and types of service on the basis of these source documents;

2) cause and effect relationship of the income, costs and the involved assets with those activities and types of service with which they are connected;

3) transparency in case of reference and income distribution, costs and the involved assets on the corresponding activities and types of regulated services.

6. Separate accounting shall be based on the source documents used for conducting accounting and managerial accounting which shall provide the necessary detail level for separation of the income, costs and the involved assets on activities and types of service according to these rules. These Rules do not change procedure and form of submission of the established financial and tax statements by telecom operators.

7. The basic concepts applied in these rules for the purposes of conducting separate accounting:

1) allocation base - the quantitative index (indicators) used for cost allocation and degree of involvement of assets on types of service and elements of network;

2) basic network - the component of network of telecommunications serving for ensuring provision of services of transfer of traffic (information) to ultimate users and traffic transmission to other telecom operators. The basic network is formed by switching elements (the group switching equipment) and transfers (the communication links formed by transportation network);

3) business processes - the sequence of certain actions in activities of the telecom operator with use of its resources with ultimate goal of rendering services;

4) business processes of management (management) - business processes by result which increase in effectiveness and efficiency of all other processes is;

5) external services - the services including regulated, provided by the telecom operator to external users of services whom ultimate users (subscribers and other clients) and telecom operators treat;

6) internal (transfer) services - conditionally selected stages of provision of external services which are the services provided by one activities of the telecom operator to other activities of the same telecom operator;

7) auxiliary business processes - business processes of which creation of necessary conditions for implementation of the main business of processes and business of processes of management (management) is result;

8) the involved assets - the assets of the telecom operator used for provision of all types of service of telecommunications including fixed assets, intangible assets and current assets;

9) indirectly the involved assets on services - the involved assets which have relationships of cause and effect along with several services (group of services) and therefore they cannot be directly and are unambiguously carried to certain service, but degree of their involvement in rendering certain services can be determined on the basis of the allocation bases reflecting these relationships of cause and effect;

10) indirect costs on services - costs which have causes and effect relationships along with several services (group of services) and therefore cannot be directly and are unambiguously carried to certain service, but can be distributed on services on the basis of the allocation bases reflecting origins of costs;

11) indirectly the involved assets on elements of network - the involved assets which have causes and effect relationships along with several elements of network and therefore they cannot be directly and are unambiguously carried to certain element of network, but degree of their involvement on certain elements of network can be determined on the basis of the allocation bases reflecting these causes and effect relationships;

12) indirect costs on elements of network - costs which have causes and effect relationships along with several elements of network and therefore cannot be directly and are unambiguously carried to certain element of network, but can be distributed on elements of network on the basis of the allocation bases reflecting origins of costs;

13) activities - set of certain processes of rendering services which participate in rendering services as independently, and in interaction with each other;

14) general assets - assets which are connected with provision of all types of service, but have no certain cause and effect relationship with these services therefore degree of their involvement in provision of services can be determined on the basis of the allocation bases approved with authorized body;

15) total costs - costs which are connected with provision of all types of service, but have no certain cause and effect relationship with these services therefore are distributed on the basis of the allocation bases approved with authorized body;

16) the main business processes - business processes of which rendering services is result;

17) directly involved assets on services - the involved assets which have direct causes and effect relationships with provision of certain service and therefore can be directly and are unambiguously carried to certain service;

18) direct costs on services - costs which have direct causes and effect relationships with certain service and therefore can be directly and are unambiguously carried to certain service;

19) directly involved assets on elements of network - the involved assets which have direct causes and effect relationships with certain element of network and therefore can be directly and are unambiguously carried to certain element of network;

20) direct costs on elements of network - costs which have direct causes and effect relationships with certain element of network and therefore can be directly and are unambiguously carried to certain element of network;

21) distribution on the basis of cause and effect relationship - income distribution, costs and the involved assets by types of regulated services on the basis of preliminary researches of origins, communications of costs, the income and the involved assets with certain services. Cost allocation and the involved assets is made taking into account that the same elements of network participate in provision of number of services and the networks of costs connected with elements and the involved assets shall be distributed on these services;

22) resources economic §-set of sources, the means used in production economic activity, subdivided on natural (raw, geophysical), labor (human capital), capital (the physical capital - fixed assets), current assets (materials), information resources, financial (money capital) resources;

23) network of subscriber access - the component of network of telecommunications serving for ensuring provision of access to communication services to ultimate users. The network of subscriber access is formed by set of all subscriber equipment, including the subscribers line circuits, line cards and ports located on switches or hubs, subscriber lines (wire and wireless) and all related equipment and constructions to the subscriber device, inclusive;

24) jointly the involved assets - the involved assets which are used for provision of several services (group of services), but have no certain cause and effect relationship with these services, but degree of their involvement in provision of services can be determined on the basis of the allocation bases approved with authorized body;

25) joint costs - costs which are used for provision of several services (group of services), but have no certain cause and effect relationship with these services therefore are distributed on the basis of the allocation bases approved with authorized body;

26) transportation network - the network of telecommunications consisting of transmission lines and transmission systems interexchange local, intra-zone and trunk networks, and the corresponding infrastructure;

27) transfer payments - value term of amount of the rendered internal (transfer) services;

28) transfer dachshunds - value term of costs per unit of the rendered internal services;

29) economically reasonable costs - the costs of the telecom operator connected with ensuring operating (regular) activities of the telecom operator, compensation on the involved capital invested in the involved assets and to the depreciation charges on reproduction of the involved assets;

30) elements of network - the groups of fixed assets used on the networks of telecommunications when rendering all types of service of telecommunications combined on activities for distribution of their cost and the related costs for types of service of telecommunications.

8. Concepts civil and other industries of the legislation of the Republic of Kazakhstan, used in these rules, are applied in that value in what they are used in these industries of the legislation if other is not provided by these rules.

2. Types of service and activities on which separate account is kept

9. For cost allocation and determination of involvement of assets by types of regulated services of costs and the involved assets of telecom operators are grouped in activities. Cost allocation and determinations of involvement of assets is carried out on the basis of consecutive selection of all stages of provision of services of telecommunications (internal services in activities). Cost allocation is made by selection of the costs connected with processes of servicing and content of elements of networks of telecommunications from sales processes of services to ultimate users and selections of costs from provision of other services. Determination of degree of involvement of assets is made by selection of the involved assets connected with the corresponding elements of networks of telecommunications from the assets connected with rendering of services and selection of the assets connected with activities for provision of other services.

For the purposes of conducting separate accounting the following types of activities are selected:

1) forming and operation of basic network;

2) forming and operation of network of subscriber access;

3) retail activities;

4) other activities.

For the purposes of separate accounting the income, costs and the involved assets grouped in activities are distributed on types of service (regulated by types and in general on non-regulated services).

10. Costs and the involved assets grouped in the activities specified in subitems 1) and 2) of Item 9, are distributed when conducting separate accounting on the services rendered by this directions of activities to other telecom operators and (or) on each of the activities specified in subitems 3) and 4) of Item 9, according to Chapter 5 of these rules.

3. The income, costs and the involved assets on activities

11. Activity "Forming and operation of basic network" provides business processes of maintenance and content, planning and development of basic network which independently provides internal and external services.

The services rendered belong to internal services which are provided by basic network:

to activity "Retail activities" - traffic transmission and provision of channels for subsequent their realization to ultimate users in type of service of provision of different connections and provisions in lease of channels for the organization of the private selected networks; to activity "Other activities" - services in servicing of some types of the equipment and the constructions provided in lease, for subsequent their realization to ultimate users in type of service of provision in lease of the specified equipment and constructions.

The services rendered to other telecom operators in traffic transmission, provision of channels belong to external services which are provided by basic network.

Income of basic network consists of transfer payments for internal services and the income from provision of external services. Transfer payments for internal services and the income from provision of external services are determined depending on amounts of the corresponding services and the prices on which the above-named services were rendered.

Costs of basic network will consist of the costs connected with maintenance and content, planning and development of elements of basic network.

All assets distributed on elements of basic network will belong to the involved assets of basic network (the main and service production equipment, the other equipment, buildings and constructions, infrastructure elements, and also the intangible assets and working capital connected with the corresponding elements of basic network).

12. Activity "Forming and operation of network of subscriber access" provides business processes of maintenance and content, planning and development of network of subscriber access which independently provides internal services.

The services rendered belong to internal services which are provided by network of subscriber access:

to activity "Retail activities" provision in use of subscriber lines for subsequent their realization to ultimate users in type of service of provision of subscriber access and provision of access through public terminals;

to activity "Other activities" - services in servicing of some types of the equipment and the constructions provided in lease for subsequent their realization to ultimate users in type of service of provision in lease of such equipment and constructions.

Income of network of subscriber access consists of transfer payments for internal services. Transfer payments for internal services are determined depending on amounts of the corresponding services and the prices on which the above-named services were rendered.

Costs of network of subscriber access will consist of the costs connected with maintenance and content, planning and development of elements of network of subscriber access.

All assets distributed on elements of network of subscriber access (the capital and service production equipment, the other equipment, buildings and constructions, infrastructure elements, and also the intangible assets and working capital connected with the corresponding elements of network of subscriber access) will belong to the involved assets of network of subscriber access.

13. Activity "Retail activities" include those types of activity (business processes) which are connected with ensuring rendering of services of telecommunications to ultimate users.

The services of telecommunications provided to ultimate users belong to external services which are provided by retail activities:

services of provision of different connections in network of the telecom operator and connections with entry into networks of other telecom operators, including the international networks, (local, intra-zone, long, international distance connections);

services of provision in lease of channels for the organization of the private selected networks;

services of provision of subscriber access;

services of provision of access through public terminals;

other services of telecommunications provided to ultimate users.

Income of retail activities consists of the income from provision of services of telecommunications to ultimate users. The income from provision of services of telecommunications is determined depending on amounts of the corresponding services and the prices on which the above-named services were rendered.

Costs of retail activities consist of the costs connected with commercial providing and rendering of services of telecommunications, and also transfer payments for the internal services provided by basic network and network of subscriber access.

All assets connected with commercial providing and rendering of services of telecommunications (the corresponding equipment, buildings and constructions, and also the intangible assets and working capital connected with commercial providing and rendering of services of telecommunications) belong to the involved assets of retail activities.

14. Activity "Other activities" cover other types of activity performed by the telecom operator on rendering services to external users.

The services of telecommunications provided to external users belong to external services which are provided by other activities: services of provision in lease of the equipment, the constructions, rooms and other assets which are not used for provision of services of telecommunications;

services of carrying out one-time works on the organization of access (carrying out communication lines, installation of equipment and other works);

services of maintenance of the equipment, the devices and constructions belonging to clients;

consulting services;

help services;

other services provided to external users.

Income of other activities consists of the income from provision of other services. The income from provision of other services is determined depending on amounts of the corresponding services and the prices on which other services were provided.

Costs of other activities consist of the costs connected with provision (with production and realization) other services, and also transfer payments for the internal services provided by basic network and network of subscriber access.

To the involved assets of other activities all assets connected with provision (with production and realization) other services (the corresponding equipment, buildings and constructions, and also the corresponding intangible assets and working capital) treat.

15. When rendering the services which are not provided by Items 11 - 14, their reference to internal and external services is made by telecom operators independently on the basis of the concepts established by subitems 3) and 4) of Item 7.

4. The income, costs and the involved assets by types of regulated services

16. Separation of the income by types of regulated services is made taking into account the basic principles of separate accounting established by these rules. The income from provision of each type of regulated services is determined proceeding from amounts of the corresponding types of service and the prices (rates) on which the specified types of service were rendered to external users.

17. The income from rendering services has by types of regulated services and in general on non-regulated services on the basis of these source documents direct reference.

18. Costs on provision of each type of regulated services of telecommunications to ultimate users consist of the activity costs "Retail activities" connected with realization of the corresponding types of regulated services including transfer payments for use of the internal services, necessary for their provision, provided by activities "Forming and operation of basic network" and "Forming and operation of network of subscriber access". Transfer payments are considered if by provision of regulated service internal services were rendered.

19. Costs on provision of other types of regulated services consist of the costs of other activities connected with rendering the corresponding other types of regulated services including transfer payments for use of the internal services, necessary for their provision, provided by activities "Forming and operation of basic network" and "Forming and operation of network of subscriber access". Transfer payments are considered if by provision of regulated service internal services were rendered.

20. Costs on provision of regulated services by activities "Forming and operation of basic network" and "Forming and operation of network of subscriber access" consist of the costs connected with rendering these services.

21. To the involved assets by each type of regulated services of the telecommunications rendered by activity "Retail activities" the involved assets of retail activities connected with realization of the corresponding types of regulated services of telecommunications, and also the involved assets by types of the internal services provided to activity "Retail activities" by basic network and network of subscriber access which are necessary for provision of the specified types of regulated services belong. The involved assets by types of internal services are considered if by provision of regulated service internal services were used.

22. To the involved assets by each type of the regulated services rendered by activity "Other activities" the involved assets of other activities connected with production and realization of the corresponding types of regulated other services, and also the involved assets by types of the internal services provided to activity "Other activities" by basic network and network of subscriber access which are necessary for provision of the specified types of regulated services belong. The involved assets by types of internal services are considered if by provision of regulated service internal services are used.

23. The involved assets of basic network and network of subscriber access connected with rendering these services belong to the involved assets by each type of regulated services of the telecommunications provided by basic network and network of subscriber access to telecom operators.

5. Procedure for cost allocation and the involved assets

24. For the purposes of conducting separate accounting of costs and the involved assets are subdivided on direct, indirect, joint and general.

25. For cost allocation and determination of degree of involvement of assets the distribution methodology on the basis of cause and effect relationship of costs and assets with the corresponding activities and the services provided by the telecom operator is used. At the same time causes and effect relationships of costs and assets are established with resources on each activity of the telecom operator, and causes and effect relationships of these resources of the telecom operator with the services provided by the specified telecom operators.

Depreciation of the involved assets is distributed on the basis of distribution of the involved assets.

26. Process of cost allocation consists of the following stages (the scheme of consecutive stages of distribution is provided on the Drawing of 1 Appendix 1):

1) the first stage of distribution - direct and indirect cost allocation and grouping of assets on appropriate resources (fixed assets, personnel, intangible assets and other assets) of the telecom operator (the list of main types of resources and allocation bases of indirect costs on resources is provided in Table 1 of Appendix 1);

2) the second stage of distribution - determination of direct and indirect connections of resources of the telecom operator with the processes corresponding business: the main, auxiliary and business by processes of management (management) for the direct reference and indirect cost allocation and the involved assets connected with resources on the processes corresponding business (the approximate list business of processes and allocation bases of resources on them are given in Table 2 of Appendix 1);

3) the third stage of distribution - determination of direct and indirect connections auxiliary business of processes of the telecom operator with the corresponding main business by processes and processes of management for the direct reference and indirect cost allocation and the involved assets connected with auxiliary business by processes on the main business processes and processes of management (the list of the bases for distribution auxiliary business of processes is provided in Table 3 of Appendix 1);

4) the fourth stage of distribution - determination of direct and indirect connections of the main business of processes of the telecom operator with the corresponding external services and elements of network for the direct reference and indirect cost allocation and the involved assets connected with the main business by processes on external services and elements of network (the approximate list of the bases business of processes on services and elements of network is provided in Table 4 of Appendix 1);

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