Part 1
DEFINITIONS
When used in this system of accounts:
1. "Accounts" means the accounts prescribed
in this system of accounts.
2.
"Amortization" means the gradual extinguishment of an amount in an account by
distributing such amount over a fixed period, over the life of the asset or
liability to which it applies, or over the period during which it is
anticipated the benefit will be realized.
3. "Book cost" means the amount at which
property is recorded in these accounts without deduction of related provisions
for accrued depreciation, amortization or for other purposes.
4. "Commission," unless otherwise indicated
by the context, means the commission prescribing this system of
accounts.
5. "Cost" means the
amount of money actually paid for property or services. When the consideration
given is other than each, the value of such consideration shall be determined
on a cash basis.
6. "Cost of
removal" means the cost of demolishing, dismantling, tearing down or otherwise
removing utility plant, including the cost of transportation and handling
incidental thereto.
7.
"Depreciation," as applied to depreciable utility plant, means the loss in
service value not restored by current maintenance, incurred in connection with
the consumption or prospective retirement of utility plant in the course of
service from causes which are known to be in current operation and against
which the utility is not protected by insurance. Among the causes to be given
consideration are wear and tear, decay, action of the elements, inadequacy,
obsolescence, changes in the art, changes in demand and requirements of public
authorities.
8. "Investment
advances" means advances, represented by notes or by book accounts only, with
respect to which it is mutually agreed or intended between the creditor and
debtor that they shall be settled by the issuance of securities or shall not be
subject to current settlement.
9.
"Minor items of property" means the associated parts or items of which
retirement units are composed.
10.
"Net salvage value" means the salvage value of property retired less the cost
of removal.
11. "Original cost," as
applied to utility plant, means the cost of such property to the person first
devoting it to public service.
12.
"Property retired," as applied to utility plant, means property which has been
removed, sold, abandoned, destroyed, or which for any cause has been withdrawn
from service.
13. "Replacing" or
"replacement," when not otherwise indicated in the context, means the
construction or installation of utility plant in place of property retired,
together with the removal of the property retired.
14. "Retirement units" means those items of
utility plant which, when retired, with or without replacement. are accounted
for by crediting the book cost thereof to the utility plant account in which
included.
15. "Salvage value" means
the amount received for property retired, less any expenses incurred in
connection with the sale or in preparing the property for sale; or, if
retained, the amount at which the material recoverable is chargeable to
materials and supplies, or other appropriate account.
16. "Service life" means the time between the
date utility plant is includible in utility plant in service, or utility plant
leased to others, and the date of its retirement. If depreciation is accounted
for on a production basis rather than on a time basis, then service life should
be measured in terms of the appropriate unit of production.
17. "Service value" means the difference
between original cost and net salvage value of utility plant.
18. "Utility," as used herein and when not
otherwise indicated in the context, means any public utility to which this
system of accounts is applicable.
Part 2
GENERAL INSTRUCTIONS
1.
Classification of utilities
A. This system of accounts applies to private
sewage utilities as defined in Section
16-1 of
the Connecticut General Statutes, Revision of 1958, Revised to 1966, as amended
by Public Act No. 546.
2.
Records
A. Each utility shall keep its books of
account, and all other books, records, and memoranda which support the entries
in such books of account so as to be able to furnish readily full information
as to any item included in any account. Each entry shall be supported by such
detailed information as will permit a ready identification, analysis, and
verification of all facts relevant thereto.
B. In addition to prescribed accounts,
clearing accounts, temporary or experimental accounts, and subdivisions of any
account, may be kept provided the integrity of the prescribed accounts is not
impaired.
C. Each utility shall
keep its books on either a monthly or quarterly basis. Each utility shall close
its books at the end of each calendar year.
3.
Item lists
Lists of "items" appearing in the texts of the accounts
elsewhere herein are for the purpose of more clearly indicating the application
of the prescribed accounting. The lists are intended to be representative, but
not exhaustive. The appearance of an item in a list warrants the inclusion of
the item in the account mentioned only when the text of the account also
indicates inclusion inasmuch as the same item frequently appears in more than
one list. The proper entry in each instance must be determined by the texts of
the accounts. In cases of doubtful interpretation, the matter shall be
submitted to the commission for decision.
4.
Distribution of pay and expenses of
employees
The charges to utility plant, operating expenses and other
accounts for services and expenses of employees engaged in activities
chargeable to various accounts, such as construction, maintenance, and
operations, shall be based upon the actual time engaged in the respective
classes of work, or in case that method is impracticable, upon the basis of a
study of the time actually engaged during a representative period.
5.
Accounting to be on the
accrual basis
The utility is required to keep its accounts on the accrual
basis. This requires the inclusion in its accounts of all known transactions of
appreciable amount which affect the accounts. If bills covering such
transactions have not been received or rendered, the amounts shall be estimated
and appropriate adjustments made when the bills are received.
6.
Accounting for other
departments
If the utility also operates other utility departments; such
as, electric, gas, water, etc., it shall keep such accounts for the other
departments as may be prescribed by proper authority and in the absence of
prescribed accounts, it shall keep such accounts as are proper or necessary to
reflect the results of operating each other department.
7.
Extraordinary items
It is the intent that net income shall reflect all items of
profit and loss during the period with the sole exception of prior period
adjustments as described in paragraph 8 below. Those items related to the
effects of events and transactions which have occurred during the current
period and which are not typical or customary business activities of the
company shall be considered extraordinary items. Accordingly, they will be
events and transactions of significant effect which would not be expected to
recur frequently and which would not be considered as recurring factors in any
evaluation of the ordinary operating processes of business. (In determining
significance, items of a similar nature should be considered in the aggregate.
Dissimilar items should be considered individually, however, if they are few in
number, they may be considered in aggregate). To be considered as extraordinary
under the above guidelines, an item should be more than approximately 5 percent
of income, computed before extraordinary items. Commission approval must be
obtained to treat an item of less than 5 percent, as extraordinary. (See
Accounts 434 and 435.)
8.
Prior period itemsA. As a
general rule, items relating to transactions which occurred prior to the
current calendar year but were not recorded in the books of account shall be
included in the same accounts in which they would have been recorded had the
item been recorded in the proper period. Such items relate to events or
transactions which occurred in a prior period or periods, the accounting
effects of which could not be determined with reasonable assurance at the time,
usually because of major uncertainty then existing. When the amount of a prior
period item is relatively so large its inclusion for a single month would
distort the accounts for that month, the amount may be distributed in equal
amounts to the accounts for the current and remaining months of the calendar
year. However, if the amount of any prior period item is so large that the
company believes its inclusion in the income statement would seriously distort
the net income for the year, the company shall request commission approval to
record the amount in account 439, Adjustments to Retained Earnings. Such a
request must be accompanied by adequate justification.
B. Treatment as prior period adjustments
should not be applied to the normal, recurring corrections and adjustments
which are the natural result of the use of estimates inherent in the accounting
process. For example, changes in the estimated remaining lives of fixed assets
affect the computed amounts of depreciation, but these changes should be
considered prospective in nature and not prior period adjustments. Similarly,
relatively insignificant adjustments of provisions for liabilities (including
income taxes) made in prior periods should be considered recurring items to be
reflected in operations of the current period. Some uncertainties, for example
those relating to the realization of assets (collectibility of accounts
receivable, ultimate recovery of deferred costs of realizability of inventories
or other assets), would not qualify for prior period adjustment treatment,
since economic events subsequent to the date of the financial statements must
of necessity enter into the elimination of any previously-existing uncertainty.
Therefore, the effects of such matters are considered to be elements in the
determination of net income for the period in which the uncertainty is
eliminated. (See Account 439.)
Part 3
UTILITY PLANT INSTRUCTIONS
1.
Utility plant to be recorded at
costA. All amounts included in the
accounts for utility plant acquired as an operating unit or system, shall be
stated at the cost incurred by the person who first devoted the property to
utility service and all other utility plant shall be included in the accounts
at the cost incurred by the utility except as otherwise provided in the texts
of the intangible plant accounts. Where the term "cost" is used in the detailed
plant accounts, it shall have the meaning stated in this paragraph.
B. When the consideration given for property
is other than cash, the value of such consideration shall be determined on a
cash basis. In the entry recording such transaction, the actual consideration
shall be described with sufficient particularity to identify it. The utility
shall be prepared to furnish the commission the particulars of its
determination of the cash value of the consideration if other than
cash.
C. When property is purchased
under a plan involving deferred payments, no charge shall be made to the
utility plant accounts for interest, insurance or other expenditures occasioned
solely by such form of payment.
D.
Utility plant contributed to the utility or constructed by it from
contributions to it of cash or its equivalent shall be charged to the utility
plant accounts at cost of construction, estimated if not known. There shall be
credited to the accounts for accumulated depreciation and amortization the
estimated amount of depreciation and amortization applicable to the property at
the time of its contribution to the utility. The difference between the amounts
included in the utility plant accounts and the accumulated depreciation and
amortization shall be credited to account 271, Contributions in Aid of
Construction.
2.
Components of construction cost
The cost of construction of property chargeable to the utility
plant accounts shall include, where applicable, the cost of labor, materials
and supplies, transportation, work done by others for the utility, injuries and
damages incurred in construction work, privileges and permits, special machine
service, interest during construction and such portion of general engineering,
administrative salaries and expenses, insurance, taxes and other analogous
items as may be properly includible in construction costs.
3.
Land and land rights
A. The accounts for land and land rights
include the cost of land owned in fee by the utility and rights, interests, and
privileges held by the utility in land owned by others; such as, leaseholds,
easements, water and water power rights, diversion rights, submersion rights,
rights of way, and other like interest in land.
B. Where special assessments for public
improvements provide for deferred payments, the full amount of the assessments
shall be charged to the appropriate land account and the unpaid balance shall
be carried in an appropriate liability account. Interest on unpaid balances
shall be charged to the appropriate interest account. If any part of the cost
of public improvements is included in the general tax levy, the amount thereof
shall be charged to the appropriate tax account.
C. The cost of buildings and other
improvements (other than public improvements) shall not be included in the land
accounts. If at the time of acquisition of an interest in land such interest
extends to buildings or other improvements (other than public improvements),
which are then devoted to utility operations, the land and improvements shall
be separately appraised and the cost allocated to land and buildings or
improvements on the basis of the appraisals. If the improvements are removed or
wrecked without being used in operations, the cost of removing or wrecking
shall be charged and the salvage credited to the account in which the cost of
the land is recorded.
D. When the
purchase of land for utility operations requires the purchase of more land than
needed for such purposes, the charge to the specific land account shall be
based upon the cost of the land purchased less the fair market value of that
portion of the land which is not to be used in utility operations. The portion
of the cost measured by the fair market value of the land not to be used shall
be included in account 354, Property Held for Future Use, or account 121,
Nonutility Property, as appropriate.
4.
Structures and improvements
A. The accounts for structures and
improvements include the cost of all buildings and facilities to house,
support, or safeguard property of persons, including all fixtures permanently
attached to and made a part of buildings and which cannot be removed therefrom
without cutting into the walls, ceilings, or floors, or without in some way
impairing the buildings, and improvements of a permanent character on or to
land.
B. The cost of specially
provided foundations not intended to outlast the machinery or apparatus for
which provided, the cost of angle irons, castings, etc., installed at the base
of any item of equipment, shall be charged to the same account as the cost of
the machinery, apparatus or equipment.
C. Where furnaces and boilers are used
primarily for furnishing steam for some particular department and only
incidentally for furnishing steam for heating a building and operating the
equipment therein, the entire cost of such furnaces and boilers shall be
charged to the appropriate plant account, and no part to the building
account.
5.
EquipmentA. The cost of equipment
chargeable to the utility plant accounts, unless otherwise indicated in the
text of an equipment account, includes the net purchase price thereof, sales
taxes, investigation and inspection expenses necessary to such purchase,
expenses of transportation when borne by the utility, labor employed, materials
and supplies consumed, and expenses incurred by the utility in unloading and
placing the equipment in readiness to operate.
B. Exclude from equipment accounts hand and
other portable tools, which are likely to be lost or stolen or which have
relatively small value or short life, unless the correctness of the accounting
therefor as utility plant is verified by current inventories. Special tools
acquired and included in the purchase price of equipment shall be included in
the appropriate plant account. Portable drills and similar tool equipment when
used in connection with the operation and maintenance of a particular plant or
department, such as pumping, distribution, etc., or in "stores," shall be
charged to the plant account appropriate for their use.
C. The equipment accounts shall include angle
irons and similar items which are installed at the base of an item of
equipment, but piers and foundations which are designed to be as permanent as
the buildings which house the equipment, or which are constructed as a part of
the building and which cannot be removed without cutting into the walls,
ceilings, or floors, or without in some way impairing the building, shall be
included in the building accounts.
6.
Utility plant retired
A. When depreciable utility plant is
abandoned, destroyed, withdrawn or otherwise retired from service for any
cause, the book cost of the plant shall be deducted from the utility plant
accounts and charged to accumulated provision for depreciation. The cost of
removing such plant shall be charged to accumulated provision for depreciation
and the amount received for any materials recovered and sold, or salvage value
if returned to stores, shall be credited to the accumulated provision for
depreciation. It is not intended that the above procedure shall be followed in
the replacement of minor items of plant, the replacement of which is charged to
operating expense accounts.
B. The
book cost of land retired shall be credited to the appropriate land account. If
the land is sold, the difference between the book cost, less any accumulated
provision for amortization therefor which has been authorized and provided, and
the sale price of the land, less commissions and other expenses of making the
sale, shall be included in account 411.6, Gains from Disposition of Utility
Plant or account 411.7, Losses from Disposition of Utility Plant, when such
property is included in accounts 300-353. If at the time of sale such property
is classified in account 354, Property Held for Future Use, or account 121,
Nonutility Property; but had previously been classified in the aforementioned
utility plant accounts, gains or losses on its sale shall be charged or
credited to account 411.6 or 411.7, as appropriate, otherwise to account 421.1,
Gain on Disposition of Property, or account 421.2, Loss on Disposition of
Property, unless otherwise authorized by the commission. If the land is not
used in utility service but is retained by the utility, the book cost shall be
charged to account 354, Property Held for Future Use, or account 121,
Nonutility Property, as appropriate.
Note: Significant gains or losses on sale of property, as
determined by the commission, shall be transferred to account 256, Deferred
Gains from Disposition of Property, or account 187, Deferred Losses from
Disposition of Property; and amortized to accounts 411.6, Gains from
Disposition of Utility Plant, 411.7, Losses from Disposition of Utility Plant,
421.1, Gain on Disposition of Property, or 421.2, Loss on Disposition of
Property, as appropriate.
C. The book cost of utility plant retired
shall be the amount at which such property is included in the utility plant
accounts, including all components of construction costs. The book cost shall
be determined from the utility's records and, if this cannot be done, it shall
be estimated. When it is impracticable to determine the book cost of each unit,
due to the relatively large number or small cost thereof, an appropriate
average book cost of the units, with due allowance for any differences in size
and character, shall be used as the book cost of the units retired.
D. When utility plant constituting an
operating unit or system is sold, conveyed, or transferred to another by sale,
merger, consolidation, or otherwise, the book cost of the property sold or
transferred to another shall be credited to the appropriate utility plant
accounts, including amounts carried in account 356, Utility Plant Acquisition
Adjustments. The amounts (estimated if not known) carried with respect thereto
in the accounts for accumulated provision for depreciation and amortization and
in account 252, Customer Advances for Construction, and account 271,
Contribution in Aid of Construction, shall be charged to such accounts and the
contra entries made to account 351, Utility Plant Purchased or Sold. Unless
otherwise ordered by the commission, the difference, if any, between (a) the
net amount of debits and credits and (b) the consideration received for the
property, less commissions and other expenses of making the sale, shall be
included in account 411.6, Gains from Disposition of Utility Plant, or account
411.7, Losses from Disposition of Utility Plant, as appropriate. (See account
351. Utility Plant Purchased or sold.)
Note A: Significant gains or losses on sale of property, as
determined by the commission, shall be transferred to account 256, Deferred
Gains from Disposition of Property, or account 187, Deferred Losses from
Disposition of Property, and amortized to accounts 411.6, Gains from
Disposition of Utility Plant, or 411.7, Losses from Disposition of Utility
Plant, as appropriate.
Note B: In cases where existing utilities merge or consolidate
because of financial or operating reasons or statutory requirements rather than
as a means of transferring title of purchased properties to a new owner, the
accounts of the constituent utilities, with the approval of the commission, may
be combined. In the event original cost has not been determined, the resulting
utility shall proceed to determine such cost as outlined herein.
Part 4
BALANCE SHEET ACCOUNTS
Utility Plant
100.
Utility plant
A. This account shall include the book amount
of utility plant, included in the plant accounts 301 to 357, inclusive,
prescribed herein and in similar accounts for other utility departments, and
having an expectation of life in service of more than one year from date of
installation, including such property owned by the utility but held by
nominees. Separate subaccounts shall be maintained hereunder for each utility
department.
B. The cost of
additions to and betterments of property leased from others, which are
includible in this account, shall be maintained in subdivisions separate and
distinct from those relating to owned property.
110.
Accumulated provision for
depreciation and amortization of utility plant
A. This account shall be credited with the
following:
(1) Amounts charged to account 403,
Depreciation Expense, to account 404, Amortization Expense, to account 413,
Expenses of Utility Plant Eased to Others, to account 416, Costs and Expenses
of Jobbing and Contract Work, or to clearing accounts for currently accruing
depreciation or amortization of plant.
(2) Amounts of depreciation applicable to
utility properties acquired as operating units or systems.
(3) Amounts chargeable to account 182,
Extraordinary Property Losses, when authorized by commission.
(4) Amounts of depreciation applicable to
utility plant donated to the utility.
B. At the time of retirement of utility
plant, this account shall be charged with the book cost of the property retired
and the cost of removal, and shall be credited with the salvage value and any
other amounts recovered, such as insurance.
C. The credits and debits to this account
shall be so kept as to show separately:
(1)
the amount of accrual for depreciation or amortization,
(2) the book cost of property retired,
(3) cost of removal,
(4) salvage, and
(5) other items, including recoveries from
insurance.
D. The
utility is restricted in its use of the provisions for depreciation to the
purposes set forth above. It shall not divert any portion of this account to
retained earnings or make any use thereof without authorization by the
commission.
Other Property and Investments
121.
Nonutility
property
This account shall include the book cost of land, structures,
equipment or other tangible or intangible property owned by the utility, but
not used in utility service and not properly includible in account 354,
Property Held for Future Use.
122.
Accumulated provision for
depreciation and amortization of nonutility property
This account shall include the accumulated provision for
depreciation and amortization applicable to property other than utility
plant.
124.
Other
investmentsA. This account shall
include the book cost of investments in securities issued or assumed by other
companies, investment advances to such companies, and any investments not
accounted for elsewhere. Include also the offsetting entry to the recording of
amortization of discount or premium on interest-bearing investments. (See
account 419, Interest and Dividend Income.)
B. The records shall be maintained in such
manner as to show the amount of each investment and the investment advances to
each person.
125.
Special funds
This account shall include the amount of each and book cost of
investments which have been segregated in special funds for bond retirements,
property additions, and replacements, insurance, employees' pensions, savings,
relief, hospital, and other purposes not provided for elsewhere. A separate
account, with appropriate title, shall be kept for each fund.
Note: Amounts deposited with a trustee under the terms of an
irrevocable trust agreement for pensions or other employees' benefits shall not
be included in this account.
Current and Accrued Assets
131.
Cash and working funds
This account shall include the amount of cash on hand and in
banks and each advanced to officers, agents, employees, and others as petty
cash or working funds. Special cash deposits for payment of interest, dividends
or other special purposes shall be included in this account in separate
subdivisions which shall specify the purpose for which each such special
deposit is made.
Note: Special deposits for more than one year which are not
offset by current liabilities, shall not be charged to this account but to
account 125, Special Funds.
132.
Temporary cash investments
A. This account shall include the book cost
of investments; such as, demand and time loans, bankers' acceptances, United
States Treasury certificates, marketable securities, and other similar
investments, acquired for the purpose of temporarily investing cash.
B. This account shall be so maintained as to
show separately temporary cash investments in securities of associated
companies and of others. Records shall be kept of any pledged investments.
141.
Notes
receivable
This account shall include the book cost, not includible
elsewhere, of all collectible obligations in the form of notes receivable and
similar evidences (except interest coupons) of money due on demand or within
one year from the date of issue.
Note: The face amount of notes receivable, discounted, sold, or
transferred without releasing the utility from liability as endorser thereon,
shall be credited to a separate subdivision of this account and appropriate
disclosure shall be made in financial statements of any contingent liability
arising from such transactions.
142.
Customer accounts
receivableA. This account shall
include amounts due from customers for utility service, and for merchandising,
jobbing and contract work.
B. This
account shall be maintained so as to permit ready segregation of the amounts
due for merchandising, jobbing and contract work.
143.
Other accounts receivable
A. This account shall include amounts due the
utility upon open accounts, other than amounts due from customers for utility
services, and merchandising, jobbing and contract work.
B. This account shall be maintained so as to
show separately amounts due on subscriptions to capital stock and from officers
and employees, but the account shall not include amounts advanced to officers
or others as working funds.
144.
Accumulated provision for
uncollectible accounts
This account shall be credited with amounts provided for losses
on accounts receivable which may become uncollectible, and also with
collections on accounts previously charged hereto. Concurrent charges shall be
made to account 690, Uncollectible Accounts, for amounts applicable to utility
operations, and to corresponding accounts for other operations. Records shall
be maintained so as to show the write-offs of accounts receivable for each
utility department.
150.
Materials and suppliesA. This
account shall include the cost of fuel on hand and unapplied materials and
supplies. It shall also include the book cost of materials recovered in
connection with construction, maintenance or the retirement of property, such
materials being credited to construction, maintenance, or accumulated
depreciation provision, respectively, and included herein as follows:
(1) Reusable materials consisting of large
individual items shall be included in this account at original cost, estimated
if not known. The cost of repairing such items shall be charged to the
maintenance account appropriate for the previous use.
(2) Reusable materials consisting of
relatively small items, the identity of which (from the date of original
installation to the final abandonment or sale thereof) cannot be ascertained
without undue refinement in accounting, shall be included in this account at
current prices new for such items. The cost of repairing such items shall be
charged to the appropriate expense account as indicated by previous
use.
(3) Scrap and nonusable
materials included in this account shall be carried at the estimated net amount
realized therefrom. The difference between the amounts realized for scrap and
nonusable materials sold and the net amount at which the materials were carried
in this account, as far as practicable, shall be adjusted to the accounts
credited when the materials were charged to this account.
B. Materials and supplies issued shall be
credited hereto and charged to the appropriate construction, operating expense,
or other account on the basis of a unit price determined by the use of
cumulative-average, first-in-first-out, or such other method of inventory
accounting as conforms with accepted accounting standards consistently
applied.
C. Inventories of
materials, supplies, fuel, etc., shall be taken at least annually and the
necessary adjustments shall be made to bring this account into agreement with
the actual inventories. In effecting the adjustments, large differences which
can be assigned to important classes of materials shall be equitably adjusted
among the accounts to which such classes of materials have been charged since
the previous inventory. Other differences shall be equitably apportioned among
the accounts to which materials have been charged.
ITEMS
1. Invoice price
of materials less cash or other discounts.
2. Freight, switching or other transportation
charges when practicable to include as part of the cost of particular materials
to which they relate.
3. Customs
duties and excise taxes.
4. Costs
of inspection and special tests prior to acceptance.
5. Insurance and other directly assignable
charges.
Note A: Where expenses applicable to materials purchased cannot
be directly assigned to particular purchases, they may be charged to a stores
expense clearing account and distributed therefrom to the appropriate
account.
Note B: When materials and supplies are purchased for immediate
use, they need not be carried through this account but may be charged directly
to the appropriate utility plant or expense account.
165.
Prepayments
A. This account shall
include the amount of rents, taxes, insurance, interest and like disbursements
made in advance of the period to which they apply. As the periods covered by
such prepayments expire, credit this account and charge the proper operating
expense or other account with the amount applicable to the period.
B. This account shall be kept or supported in
such manner as to disclose the amount of each class of prepayments.
170.
Other current and
accrued assets
This account shall include the book cost of all other current
and accrued assets, appropriately designated and supported so as to show the
nature of each asset included herein.
Deferred Debits
181.
Unamortized debt discount and
expenseA. This account shall include
the total of the unamortized balance of discount and expense for all classes of
long-term debt.
B. The discount and
expense shall be amortized over the life of the respective issues under a plan
which will distribute the amounts equitably over the life of the securities.
The amortization shall be charged to account 428, Amortization of Debt Discount
and Expense. The utility may, however, accelerate the writing off of discount
and expense where the amounts are insignificant.
182.
Extraordinary property
lossesA. When authorized or directed
by the commission, this account shall include extraordinary losses on property
abandoned or otherwise retired from service which are not provided for by the
accumulated provisions for depreciation or amortization and which could not
reasonably have been foreseen and provided for, and extraordinary losses, such
as unforeseen damages to property, which could not reasonably have been
anticipated and which are not covered by insurance or other
provisions.
B. The entire cost,
less net salvage, of depreciable property retired shall be charged to
accumulated provision for depreciation. If all, or a portion, of the loss is to
be included in this account, the accumulated provision for depreciation shall
then be credited and this account charged with the amount properly chargeable
hereto.
C. Application to the
commission for permission to use the account shall be accompanied by a
statement giving a complete explanation with respect to the items which it is
proposed to include herein, the period over which, and the accounts to which it
is proposed to write off the charges, and other pertinent
information.
183.
Other deferred debitsA. This account
shall include the following classes of items:
(1) Expenditures for preliminary surveys,
plans, investigations, etc., made for the purpose of determining the
feasibility of projects under contemplation. If construction results, this
account shall be credited with the amount applicable thereto and the
appropriate plant accounts shall be charged with an amount which does not
exceed the expenditures which may reasonably be determined to contribute
directly and immediately and without duplication to plant. If the work is
abandoned, the charge shall be to account 426, Miscellaneous Income Deductions,
or to the appropriate operating expense account.
(2) Undistributed balances in clearing
accounts at the date of the balance sheet. Balances in clearing accounts shall
be substantially cleared not later than the end of the calendar year unless
items held therein relate to a future period.
(3) Balances representing expenditures for
work in progress other than on utility plant. This includes jobbing and
contract work in progress.
(4)
Other debit balances, the proper final disposition of which is uncertain, and
unusual or extraordinary expenses, not included in other accounts, which are in
process of being written off.
B. The records supporting the entries to this
account shall be so kept that the utility can furnish full information as to
each deferred debit included herein.
187.
Deferred losses from disposition
of property
This account shall include losses from the sale or other
disposition of property previously recorded in accounts 300-353, in account
354, Property Held for Future Use, or account 121, Nonutility Property, where
such losses are significant and are to be amortized over a period of five
years, unless otherwise authorized by the commission. The amortization of the
amounts in this account shall be made by debits to account 411.7, Losses from
Disposition of Utility Plant, or account 421.2, Loss on Disposition of
Property, as appropriate. Amounts recorded in this account shall be net of
related income taxes. (See Utility Plant Instructions 6B and 6D.)
Proprietary Capital
201.
Common capital stock
204.
Preferred capital
stock
A. These accounts shall include
the par value or the stated value of stock without par value if such stock has
a stated value, and, if not, the cash value of the consideration received for
such nonpar stock, of each class of capital stock actually issued, including
the par or stated value of such capital stock in account 217, Reacquired
Capital Stock.
B. When the actual
cash value of the consideration received is more or less than the par or stated
value of any stock having a par or stated value, the difference shall be
credited or debited, as the case may be, to the premium or discount account for
the particular class and series.
C.
When capital stock is retired, these accounts shall be charged with the amount
at which such stock is carried herein.
D. A separate ledger account, with a
descriptive title, shall be maintained for each class and series of stock.
The supporting records shall show the shares nominally issued,
actually issued, and nominally outstanding.
Note: When a levy or assessment, except a call for payment on
subscriptions, is made against holders of capital stock, the amount collected
upon such levy or assessment shall be credited to account 207, Other Paid-In
Capital; provided, however, that the credit shall be made to account 213,
Discount on Capital Stock, to the extent of any remaining balance of discount
on the issue of stock.
207.
Other paid-in capital
This account shall include the balance of all other credits for
paid-in capital not includible in the capital stock accounts, and shall be kept
so as to show the source of the credits includible herein.
ITEMS
1. Premium
received on original issues of capital stock.
2. Donations received from stockholders
consisting of capital stock or reduction of debt of the utility, and the each
value of other assets received as a donation.
3. Reduction in par or stated value of
capital stock.
4. Gain on resale or
cancellation of reacquired capital stock.
5. Miscellaneous paid-in capital.
Note: Premium on capital stock shall not be set off against
expenses. Further, a premium received on an issue of a certain class or series
of stock shall not be set off against expense of another issue of the same
class or series.
212.
Installments received on capital
stock
A. This account shall include in
a separate subdivision for each class and series of capital stock the amount of
installments received on capital stock on a partial or installment payment plan
for subscribers who are not bound by legally enforceable subscription
contracts.
B. As subscriptions are
paid in full and certificates issued, this account shall be charged and the
appropriate capital stock account credited with the par or stated value of such
stock. Any discount or premium on an original issue shall be included in the
appropriate discount or premium account.
213.
Discount on capital stock
A. This account shall include in a separate
subdivision for each class and series of capital stock all discount on the
original issuance and sale of capital stock, including additional capital stock
of a particular class or series as well as first issues.
B. When capital stock which has been actually
issued is retired, the amount in this account applicable to the shares retired
shall be written off to account 207, Other Paid-In Capital, provided, however,
that the amount shall be charged to account 439, Adjustments to Retained
Earnings, to the extent that it exceeds the balance in account 207.
C. The utility may amortize the balance in
this account by charges to account 439, Adjustments to Retained
Earnings.
214.
Capital stock expenseA. This account
shall include in a separate subdivision for each class and series of stock all
commissions and expenses incurred in connection with the original issuance and
sale of capital stock, including additional capital stock of a particular class
or series as well as first issues. Expenses applicable to capital stock shall
not be deducted from premium on capital stock.
B. When capital stock which has been actually
issued by the utility is retired, the amount in this account applicable to the
shares retired shall be written off to account 207, Other Paid-In Capital, to
the extent of gains on resale or cancellation of reacquired stock includible
therein; provided, however, that the amount shall be charged to account 439,
Adjustments to Retained Earnings, to the extent that it exceeds the balance in
account 207, from such source.
C.
The utility may amortize the balance carried in this account by systematic
charges to account 425, Miscellaneous Amortization, or it may write off capital
stock expense in whole or in part by charges to account 439, Adjustments to
Retained Earnings.
Note: Expenses in connection with the reacquisition or resale
of the utility's capital stock shall not be included herein.
215.
Appropriated retained
earnings
This account shall include the amount of retained earnings
which has been appropriated or set aside for specific purposes. Separate
subaccounts shall be maintained under such titles as will designate the purpose
for which each appropriation was made.
216.
Unappropriated retained
earnings
This account shall include the balance, either debit or credit,
of unappropriated retained earnings arising from earnings. It shall not include
items includible in any subaccount of account 207, Other Paid-In
Capital.
217.
Reacquired capital stockA. This
account shall include in a separate subdivision for each class and series of
capital stock, the cost of capital stock actually issued by the utility and
reacquired by it and not retired or cancelled, except, however, stock which is
held by trustees in sinking or other funds.
B. When reacquired capital stock is retired
or cancelled, the difference between its cost, including commissions and
expenses paid in connection with the reacquisition, and its par or stated value
plus any premium and less any discount and expenses applicable to the shares
retired, shall be debited or credited, as appropriate, to account 207, Other
Paid-In Capital, provided, however, that debits shall be charged to account
439, Adjustments to Retained Earnings, to the extent that they exceed the
balance of gains on resale or cancellation of reacquired stock included in
account 207.
C. If reacquired
capital stock is resold by the utility, the difference between the amount
received on the resale of the stock, less expenses incurred in the resale, and
the cost of the stock included in this account shall be accounted for as
outlined in paragraph B.
Note: The accounting for reacquired stock shall be as
prescribed herein unless otherwise specifically required by statute.
218.
Noncorporate proprietorship
This account shall include the investment in an unincorporated
utility by the proprietor thereof, and shall be charged with all withdrawals
from the business by its proprietor. At the end of each calendar year the net
income for the year, as developed in the income account, shall be transferred
to this account. (See optional accounting procedure provided in Note C,
hereunder.)
Note A: Amounts payable to the proprietor as just and
reasonable compensation for services performed shall not be charged to this
account but to appropriate operating expense or other accounts.
Note B: When the utility is owned by a partnership, a separate
account shall be kept to show the net equity of each member therein and the
transactions affecting the interest of each such partner.
Note C: This account may be restricted to the amount considered
by the proprietor to be the permanent investment in the business, subject to
change only by additional investment by the proprietor or the withdrawal of
portions thereof not representing net income. When this option is taken, the
retained earnings accounts shall be maintained and entries thereto shall be
made in accordance with the texts thereof.
Long-Term Debt
221.
Bonds
A. Separate accounts shall be maintained
hereunder for unmatured bonds of each class and series. Each such account shall
be subdivided so as to show:
(1) The face
value of the actually issued and unmatured bonds, which have not been retired
or cancelled; also, the face value of such bonds issued by others, the payment
of which has been assumed by the utility;
(2) The face value of bonds actually issued
or assumed by the utility and reacquired by it and not paid, retired, or
cancelled.
The account for reacquired debt shall not include securities
which are held by trustees in sinking or other funds.
B. When bonds are reacquired, the
difference between face value, adjusted for unamortized discount, expense or
premium and the amount paid upon reacquisition, shall be debited or credited to
account 428, Amortization of Debt Discount and Expense, or account 429,
Amortization of Premium on Debt-Cr., as appropriate.
223.
Advances from associated
companiesA. This account shall include
the face value of notes payable to associated companies and the amount of open
book accounts representing advances from associated companies. It does not
include notes and open accounts representing indebtedness subject to current
settlement.
B. The records
supporting the entries to this account shall be so kept that the utility can
furnish complete information concerning each note and open account.
224.
Other long-term
debtA. This account shall include,
until maturity, all longterm debt not otherwise provided for. This covers such
items as receivers' certificates, real estate mortgages executed or assumed,
assessments for public improvements, notes and unsecured certificates of
indebtedness not owned by associated companies, receipts outstanding for
long-term debt, and other obligations maturing more than one year from date of
issue or assumption.
B. Separate
accounts shall be maintained for each class of obligation, and records shall be
maintained to show separately for each class all details as to date of
obligation date of maturity, interest dates and rates, security for the
obligation, etc.
Note: Miscellaneous long-term debt reacquired shall be
accounted for in accordance with the procedures set forth in account 221,
Bonds.
Current and Accrued Liabilities
231.
Notes payable
This account shall include the face value of all notes, drafts,
acceptances, or other similar evidences of indebtedness, payable on demand or
within a time not exceeding one year from date of issue.
232.
Accounts payable
This account shall include all amounts payable by the utility
within one year, which are not provided for in other accounts.
235.
Customer
deposits
This account shall include all amounts deposited with the
utility by customers as security for the payment of bills.
236.
Taxes accrued
A. This account shall be credited with the
amount of taxes accrued during the accounting period, corresponding debits
being made to the appropriate accounts for tax charges. Such credits may be
based upon estimates, but from time to time during the year as the facts become
known, the amount of the periodic credits shall be adjusted so as to include as
nearly as can be determined in each year, the taxes applicable thereto. Any
amount representing a prepayment of taxes applicable to the period subsequent
to the date of the balance sheet shall be shown under account 165,
Prepayments.
B. If accruals for
taxes are found to be insufficient or excessive, correction therefor shall be
made through current tax accruals; however, if such corrections are so large as
to seriously distort current expenses, see General Instruction 8 for
treatment.
C. Accruals for taxes
shall be based upon the net amount payable after credit for any discounts and
shall not include any amounts for interest on tax deficiencies or refunds.
Interest received on refunds shall be credited to account 419, Interest and
Dividend Income, and interest paid on deficiencies shall be charged to account
431, Other Interest Expense.
D. The
records supporting the entries to this account shall be kept so as to show for
each class of taxes, the amount accrued, the basis for the accrual, the
accounts to which charged, and the amount of tax paid.
237.
Interest accrued
This account shall include the amount of interest accrued but
not matured on all liabilities of the utility, not including, however, interest
which is added to the principal of the debt on which incurred. Supporting
records shall be maintained so as to show the amount of interest accrued on
each obligation.
238.
Other current and accrued liabilities
This account shall include the amount of all other current and
accrued liabilities not provided for elsewhere appropriately designated and
supported so as to show the nature of each liability.
ITEMS
1. Dividends
declared but not paid.
2. Matured
long-term debt.
3. Matured
interest.
4. Taxes collected
through payroll deductions or otherwise pending transmittal to the proper
taxing authority.
Deferred Credits
251.
Unamortized premium on
debtA. This account shall include the
total of the unamortized balance of premium and expense for all classes of
long-term debt, including receivers' certificates.
B. The premium and expense shall be amortized
over the life of the respective issues under a plan which will distribute the
amounts equitably over the life of the securities, the amortization shall be
credited to account 429, Amortization of Premium on Debt-Cr.
252.
Customer advances for
construction
This account shall include advances by customers for
construction which are to be refunded either wholly or in part. When a customer
is refunded the entire amount to which he is entitled, according to the
agreement or rule under which the advance was made, the balance, if any,
remaining in this account, shall be credited to account 271, Contributions in
Aid of Construction.
253.
Other deferred credits
This account shall include advance billings and receipts and
other deferred credit items, not provided for elsewhere, including amounts
which cannot be entirely cleared or disposed of until additional information
has been received.
255.
Accumulated deferred investment tax credits
A. Prior to any use of this account, the
utility must file with the commission, for the purpose of obtaining
authorization, a copy of its proposed plan of accounting for deferred
investment tax credits. The utility shall not use these accounts unless such
use has been authorized by the commission.
This account shall be credited and account 411.3, Investment
Tax Credit Adjustments, debited with investment tax credits deferred by
companies which do not apply such credits as a reduction of the overall income
tax expense in the year in which a tax credit is realized. There can be neither
changes in accounting method for utility operations nor transfers from this
account, except as authorized herein or as may otherwise be authorized by the
commission. (See Account 411.3.)
B. This account shall be debited and account
411.3 credited with a proportionate amount determined in relation to the
average useful life of utility property to which the tax credits relate, or
such lesser period of time as may be adopted and consistently followed by the
company.
C. Subdivisions of this
account by department shall be maintained for deferred investment tax credits
that are related to nonutility or other operations. Contra entries affecting
such account subdivisions shall be appropriately recorded. Use of deferral or
nondeferral accounting procedures adopted for nonutility or other operations
are to be followed on a consistent basis.
D. Separate records for each utility
department and nonutility operation shall be maintained identifying the
properties giving rise to the investment tax credits for each year with the
weighted average service life of such properties and any unused balances of
such credits. Such records are not necessary unless the tax credits are
deferred.
256.
Deferred gains from disposition of property
This account shall include gains from the sale or other
disposition of property previously recorded in accounts 300-353; in account
354, Property Held for Future Use, or account 121, Nonutility Property, where
such gains are significant and are to be amortized over a period of five years,
unless otherwise authorized by the commission. The amortization of the amounts
in this account shall be made by credits to account 411.6, Gains from
Disposition of Utility Plant, or account 421.1, Gain on Disposition of
Property, as appropriate. Amounts recorded in this account shall be net of
related income taxes. (See Utility Plant Instruction 6B and 6D.)
Operating Reserves
261.
Property insurance reserve
A. This account shall include amounts
reserved by the utility for self-insurance against losses through accident,
fire, flood, or other hazards to its own property or property leased from
others. A schedule of risks covered by this reserve shall be maintained, giving
a description of the property involved, the character of the risks covered and
the rates used.
B. Charges shall be
made to this account for losses covered by self-insurance. Details of these
charges shall be maintained according to the year the casualty occurred which
gave rise to the loss.
265.
Miscellaneous operating
reservesA. This account shall include
all operating reserves maintained by the utility which are not provided for
elsewhere.
B. This account shall be
maintained in such manner as to show the amount of each separate reserve and
the nature and amounts of the debits and credits thereto.
Note: This account includes only such reserves as may be
created for operating purposes and does not include any reservations of income,
the credits for which should be carried in account 215, Appropriated Retained
Earnings.
Contributions in Aid of Construction
271.
Contributions in aid of constructionA.
This account shall include donations or contributions in cash, services, or
property from states, municipalities or other governmental agencies,
individuals, and others for construction purposes.
B. Each credit to this account shall be
amortized to account 272, amortized contributions in aid of construction, over
the remaining book life of the plant provided by said contribution. No other
transfers shall be made from this account to any other account without prior
approval of the department.
C. The
records supporting the entries to this account shall be so kept that the
utility can furnish information as to the purpose of each donation, the
conditions, if any, upon which it was made, the amount of donations from (a)
states, (b) municipalities, (c) customers, and (d) others, and the amount
applicable to each utility department.
D. Each company shall apply to the department
for approval of a proper amortization period for the balance, as of December
31, 1985, in the account, contributions in aid of construction.
E. Each company shall apply to the department
for approval of such amortization period on or before December 31, 1986.
NOTE: There shall not be included in this account
advances for construction which are ultimately to be repaid wholly or in part.
(See account 252, Customer Advances for Construction.)
272.
Amortized
contributions in aid of construction
This account shall be credited with the amounts charged to
Account 271, Contributions in Aid of Construction. (See Account 271,
Contributions in Aid of Construction, Paragraph B.)
Accumulated Deferred Income Taxes
A. Authorization to practice deferred tax
accounting must first be obtained from the commission.
B. The utility shall use the accounts
provided below for prior accumulations of deferred taxes on income and for
additional provisions.
Note A: The test of the accounts below are designed primarily
to cover deferrals of federal income taxes pursuant to provisions of the
Internal Revenue Code of 1954 but the accounts are also applicable to deferrals
of State taxes on income.
Note B: A utility which has more than one utility department
and/or nonutility property and which has deferred taxes on income with respect
thereto shall classify such deferrals in the accounts provided below so as to
allow ready identification of items relating to each utility department and to
Other Income and Deductions.
281.
Accelerated amortization
A. This account shall be credited and account
410, Provision for Deferred Income Taxes, shall be debited with an amount equal
to that by which taxes on income payable for the year are lower because of the
use of accelerated (5-year) amortization of certified defense facilities in
computing such taxes, as permitted by Section 168 of the Internal Revenue Code
of 1954 (Section 124A of previous Internal Revenue Code), as compared to the
depreciation deduction otherwise appropriate and allowable for tax purposes
according to the straight line or other non-accelerated depreciation method and
appropriate estimated useful life for such property.
B. This account shall be debited and account
411, Income Taxes Deferred in Prior Years-Credit, shall be credited with an
amount equal to that by which taxes on income payable for the year are greater
because of the use in prior years of accelerated (5-year) amortization of
certified defense facilities instead of nonaccelerated or nonliberalized
depreciation otherwise appropriate for income tax purposes, and deferral of
taxes in such prior years as described in paragraph A, above. Such debit to
this account and credit to account 411 shall, in general, represent the effect
on taxes payable for the current year of the unavailability of a depreciation
deduction for tax purposes, or a reduced amount, with respect to any
depreciable property for which accelerated amortization was used in prior
years, as compared to the depreciation deduction otherwise available and
appropriate for such property, considering its estimated useful life, according
to the depreciation method ordinarily used by the utility for similar property
in computing depreciation for tax purposes by a nonaccelerated or
nonliberalized depreciation method.
C. Records with respect to entries to this
account as described above, and the account balance, shall be so maintained as
to show the factors of calculation and the separate amounts applicable to the
facilities of each certification or authorization of accelerated amortization
for tax purposes.
D. The use of
this account and the accounting described above are not mandatory for any
utility, which in accordance with a consistent policy elects not to follow
deferred tax accounting even though accelerated amortization is used in
computing taxes on income. If, however, deferred tax accounting is initiated
with respect to any certified defense facility, the accounting shall not be
suspended or discontinued on the property covered by that certificate, without
approval of the commission.
E. The
utility is restricted in its use of this account to the purposes set forth
above. It shall not transfer the balance in this account or any portion thereof
to retained earnings or make any use thereof except as provided in the text of
this account without prior approval of the commission. Any remaining balance of
accumulated deferred taxes with respect to any certified defense facility for
which deferred tax accounting has been followed, shall, upon expiration of the
estimated useful life of the facility on which deferred tax calculations were
based or upon retirement of such facility or predominant part thereof, be
credited to account 411, Income Taxes Deferred in Prior Years-Credit, or
otherwise be applied as the commission may authorize or direct.
282.
Liberalized
depreciationA. This account shall be
credited and account 410, Provision for Deferred Income Taxes, shall be debited
with an amount equal to that by which taxes on income payable for the year are
lower because of the use of liberalized depreciation in computing such taxes,
as permitted by Section 167 of the Internal Revenue Code of 1954, as compared
to the depreciation deduction otherwise appropriate and allowable for tax
purposes for similar property of the same estimated useful life according to
the straight line or other nonliberalized method of depreciation.
B. This account shall be debited and account
411, Income Taxes Deferred in Prior Years-Credit, shall be credited with an
amount equal to that by which taxes on income payable for the year are greater
because of the use in prior years of liberalized depreciation for income tax
purposes, and deferral of taxes in such prior years as described in paragraph A
above. Such debit to this account and credit to account 411, shall in general,
represent the effect on taxes payable for the current year of the smaller
amount of depreciation permitted for tax purposes for the current year with
respect to any depreciable property for which liberalized depreciation was used
in prior years, as compared to the depreciation deduction otherwise appropriate
and available for similar property of the same estimated useful life according
to the straight line or other nonliberalized depreciation method ordinarily
used by the utility in computing depreciation for tax purposes.
C. Records with respect to entries to this
account, as described above, and account balance, shall be so maintained as to
show the factors of calculation and the separate amounts applicable to the
plant additions of each vintage year for each class, group, or unit as to which
different liberalized depreciation methods and estimated useful lives have been
used. The underlying calculation to segregate and associate deferred tax
amounts with the respective vintage years may be based on reasonable methods of
approximation, if necessary, consistently applied.
D. The use of this account and the accounting
described above are not mandatory for any utility, which in accordance with a
consistent policy, elects not to follow deferred tax accounting even though
liberalized depreciation is used in computing taxes on income. If, however,
deferred tax accounting is initiated with respect to any property such
accounting shall not be discontinued on that property, without approval of the
commission.
E. The utility is
restricted in its use of this account to the purposes set forth above. It shall
not transfer the balance in the account or any portion thereof to retained
earnings or make any use thereof except as provided in the text of this account
without prior approval of the commission. Any remaining deferred tax balance
with respect to any years' plant additions or subdivisions thereof for which
liberalized depreciation accounting has been followed upon retirement from
service of such property or predominant portion thereof, or upon expiration of
the estimated useful life on which the depreciation calculations for tax
purposes are based, shall be credited to account 411, Income Taxes Deferred in
Prior Years-Credit, or otherwise applied as the commission may authorize or
direct.
283.
OtherA. This account, when its use has
been authorized by the commission for specific types of tax deferrals shall be
credited and account 410, Provision for Deferred Income Taxes, shall be debited
with an amount equal to that by which taxes on income payable for the year are
lower because of the current use of deductions other than accelerated
amortization or liberalized depreciation in the computation of income taxes,
which deductions for general accounting purposes will not be fully rejected in
the utility's determination of annual net income until subsequent
years.
B. This account, when its
use has been authorized by the commission, shall be debited and account 411,
Income Taxes Deferred in Prior Years-Credit, shall be credited with an amount
equal to that by which taxes on income payable for the year are greater because
of deferral of taxes on income in previous years, as provided by paragraph A,
above, because of difference in timing for tax purposes of particular income
deductions from that recognized by the utility for general accounting purposes,
other than with respect to accelerated amortization or liberalized
depreciation. Such debit to this account and credit to account 411 shall, in
general, represent the effect on taxes payable in the current year of the
smaller deduction permitted for tax purposes as compared to the amount
recognized in the utility's general accounts with respect to the item or class
of items for which deferred tax accounting by the utility was authorized by the
commission.
C. Records with respect
to entries to this account, as described above, and the account balance, shall
be so maintained as to show the factors of calculation with respect to each
annual amount of the item or class of items, other than accelerated
amortization or liberalized depreciation, for which tax deferral accounting by
the utility is authorized by the commission.
D. The utility is restricted in its use of
this account to the purposes set forth above. It shall not transfer the balance
in the account or any portion thereof to retained earnings or make any use
thereof except as provided in the text of this account, without prior approval
of the commission. Any remaining deferred tax account balance with respect to
an amount for any prior years tax deferral, the amortization of which or other
recognition in the utility's income accounts has been completed, or other
dispositions made, shall be credited to account 411, Income Taxes Deferred in
Prior Years-Credit, or otherwise disposed of as the commission may authorize or
direct.
Note: In determining appropriate use of this account as a basis
of request to the commission for authorization of its use, consideration shall
be given to the relative importance of the amount involved, and to other items
in the utility's accounts where "prepaid tax accounting" may be appropriate
such as situations (a) where the time of taking a deduction in computing taxes
on income is such that the tax deduction must be delayed or applied to a series
of future years as opposed to earlier recognition of such item in determination
of income in the general accounts of the utility, or (b) where inclusion of an
income item is required for tax purposes but is to be recognized in whole or in
part in the utility's income accounts of a subsequent year or years.
Part 5
UTILITY PLANT ACCOUNTS
Intangible Plant
301.
Organization
This account shall include the cost of organizing and
incorporating the utility and putting it into readiness to do business. This
includes the cost of legal services, amounts paid for privileges of
incorporation, office expenses incident to organizing the company and stock and
minute books and corporate seal.
Note: This account shall not include any discounts upon
securities issued or assumed, nor shall it include any costs incident to
negotiating loans, selling bonds, or other evidences of debt, or expenses in
connection with the authorization, issuance or sale of capital stock.
302.
Franchises and
consentsA. This account shall include
amounts paid to the federal government, to a state or to a political
subdivision thereof in consideration for franchises, consents, or certificates,
running in perpetuity or for a specified term of more than one year, together
with necessary and reasonable expenses incident to procuring such franchises,
consents, or certificates of permission and approval, including expenses of
organizing and merging separate corporations where statutes require, solely for
the purpose of acquiring franchises.
B. If a franchise, consent, or certificate is
acquired by assignment, the charge to this account in respect thereof shall not
exceed the amount paid therefor by the utility to the assignor, nor shall it
exceed the amount paid by the original grantee, plus the expense of acquisition
to such grantee. Any excess of the amount actually paid by the utility over the
amount above specified shall be charged to account 426, Miscellaneous Income
Deductions.
C. When any franchise
has expired, the book cost thereof shall be credited hereto and charged to
account 426, Miscellaneous Income Deductions, or to account 110, Accumulated
Provision for Depreciation and Amortization of Utility Plant, as
appropriate.
D. Records supporting
this account shall be maintained so as to show separately the book cost of each
franchise or consent.
Note: Annual or other periodic payments under franchises shall
not be included herein but in the appropriate operating expense account.
303.
Miscellaneous intangible plantA. This
account shall include the cost of patent rights, licenses, privileges, and
other intangible property necessary or valuable in the conduct of utility
operations and not specifically chargeable to any other account.
B. When any item included in this account is
retired or expires, the book cost thereof shall be credited hereto and charged
to account 426, Miscellaneous Income Deductions, or account 110, Accumulated
Provision for Depreciation and Amortization of Utility Plant, as
appropriate.
C. This account shall
be maintained in such a manner that the utility can furnish full information
with respect to the amounts included herein.
Collecting System Plant and Equipment
310.
Land and
land rights
This account shall include the cost of land and land rights
used in connection with Collecting System Plant and Equipment. (See Utility
Plant Instruction 3.)
311.
Structures and improvements
This account shall include the cost in place of Structures and
Improvements used in connection with Collecting System not includible in other
accounts provided for Collecting System Plant and Equipment. (See Utility Plant
Instruction 4.)
312.
Service connections, traps and accessories
This account shall include the cost installed of service
connections, sewage traps and accessories pertaining thereto, from collecting
mains to customer's premises or to junction points with customer-owned portion
of such service connection.
313.
Mains and accessories
This account shall include the cost installed of all mains,
pipes, ducts and accessories, the primary purpose of which is to convey sewage
from service connections into and through collecting system to pumping stations
and treatment plant.
314.
Other collecting system equipment
This account shall include the cost of all equipment used in
the collecting process, not included in accounts 312 and 313.
Pumping System Plant and Equipment
320.
Land and land
rights
This account shall include the cost of land and land rights
used in connection with pumping operations. (See Utility Plant Instruction
3.)
321.
Structures
and improvements
This account shall include the cost in place of structures and
improvements used in pumping operations. (See Utility Plant Instruction
4.)
322.
Receiving
wells
This account shall include the cost of constructing wells at
pumping stations or at other junction points along the collecting system, used
for intercepting sewage for clearing and screening, transfer to a pumping well
or otherwise further convey it along the collecting system to the treatment
plant or point of final discharge.
323.
Power pumping equipment
This account shall include the cost installed of all pumping
equipment operated by electric or other power, used in the collecting process.
Such equipment shall include generating equipment, prime movers, pumps and all
appurtenant equipment and appliances.
324.
Force mains
This account shall include the cost installed of all mains,
piping and special castings, valves, etc., used in conveyance of sewage
following pumping thereof, to the next pumping station or other junction point
in the collecting system, to the treatment plant or to the point of final
discharge.
325.
Miscellaneous pumping system equipment
This account shall include the cost of miscellaneous equipment
at pumping stations along the collecting system not included in any of the
preceding accounts.
Treatment and Disposal System Plant and
Equipment
330.
Land and land rights
This account shall include the cost of land and land rights
used in connection with sewage treatment plant operations. (See Utility Plant
Instruction 3.)
331.
Structures and improvements
This account shall include the cost in place of structures and
improvements used in connection with the operation of the sewage treatment
plant. (See Utility Plant Instruction 4.)
332.
Grit removal chambers and
equipment
This account shall include the cost installed of receptacles
into which sewage from the collecting system is deposited and in which the grit
or inorganic substance is removed from the sewage prior to the sedimentation
treatment. It shall also include the cost of equipment used for washing and
clearing grit from the grit removal chambers.
333.
Sedimentation tanks
This account shall include the cost installed of all tanks in
which sewage is to be retained to permit suspended organic solids to
settle.
334.
Sludge
handling and removal equipment
This account shall include the cost installed of sludge
handling equipment, heating and waste burning equipment, sludge drying
equipment and other removal equipment and accessories.
335.
Chemical treatment plant and
equipment
This account shall include the cost installed of chlorine
containers, gas producing evaporators, chlorine lines, chlorinators,
receptacles, and accessories.
336.
Disposal equipment and
accessories
This account shall include the cost installed of all pipes,
fittings and appurtenances through which the final sewage effluent from
treatment plant or disposal plant is discharged to final point of
disposal.
General Plant
340.
Miscellaneous land and land
rights
This account shall include the cost of land and land rights
used for utility purposes, the cost of which is not properly includible in
other land and land rights accounts. (See Utility Plant Instruction 3.)
341.
Miscellaneous
structures and improvements
This account shall include the cost in place of structures and
improvements used for utility purposes, the cost of which is not properly
includible in other Structures and Improvements accounts. (See Utility
Instruction 4.)
342.
Office furniture and equipment
This account shall include the cost of office furniture and
equipment owned by the utility and devoted to utility service, and not
permanently attached to buildings, except the cost of such furniture and
equipment which the utility elects to assign to other plant accounts on a
functional basis.
ITEMS
1. Bookcases and
shelves.
2. Desks, chairs, and desk
equipment.
3. Drafting room
equipment.
4. Filing, storage, and
other cabinets.
5. Floor
Covering.
6. Library and library
equipment.
7. Mechanical office
equipment such as accounting machines, typewriters, etc.
8. Safes.
9. Tables.
343.
Transportation equipment
This account shall include the cost of transportation vehicles
used for utility purposes.
ITEMS
1.
Airplanes.
2.
Automobiles.
3. Bicycles.
4. Electrical vehicles.
5. Motor trucks.
6. Motorcycles.
7. Repair cars or trucks.
8. Tractors and trailers.
9. Other transportation
vehicles.
344.
Other general equipment
This account shall include the cost installed of the following
equipment.
(1) Equipment used for the
receiving, shipping, handling and storage of materials and supplies when not an
integral part of the housing structure.
(2) Equipment specially provided for general
shops when such equipment is not an integral part of the housing
structure.
(3) Laboratory equipment
used for general laboratory purposes and not specially provided for or
includible in other departmental or functional plant accounts.
(4) Tools, implements, and equipment used in
construction or repair work exclusive of equipment includible in other
equipment accounts.
(5) Other
general equipment, apparatus, etc., used in the utility's sewage operations,
and which is not includible in any other account.
Note: General equipment of the nature indicated above whenever
practicable shall be assigned to the sewage plant accounts on a functional
basis.
Other Utility Plant
350.
Other tangible property
This account shall include the cost of tangible utility plant
not provided elsewhere.
351.
Utility plant purchased or
sold
This account shall be charged with the cost of utility plant
acquired as an operating unit or system by purchase, merger, consolidation,
liquidation, or otherwise, and shall be credited with the selling price of like
property transferred to others pending the distribution to appropriate accounts
as the commission shall approve or direct.
352.
Utility plant in process of
reclassificationA. This account shall
include temporarily the balance of utility plant which has not yet been
reclassified as of the effective date of this system of accounts. The detail of
primary accounts in support of this account employed prior to such date shall
be continued pending reclassification into the utility plant accounts herein
prescribed but shall not be used for additions, betterments, or new
construction.
B. No charges other
than as provided in Paragraph A, above, shall be made to this account, but
retirements of such unclassified utility plant shall be credited hereto and to
the supporting (old) fixed capital accounts until the reclassification shall
have been accomplished.
353.
Utility plant leased to
othersA. This account shall include
the original cost of utility plant owned by the utility, but leased to others
as operating units or systems, where the lessee has exclusive
possession.
B. The property
included in this account shall be classified according to the detailed accounts
prescribed for utility plant in service, and this account shall be maintained
in such detail as though the property were used by the owner in its utility
operations.
354.
Property held for future useA. This
account shall include the original cost of property owned and held for future
use in utility service under a definite plan for such use. There shall be
included herein property acquired but never used by the utility in utility
service, but held for such service in the future under a definite plan, and
property previously used by the utility in utility service pending its reuse in
the future, under a definite plan, in utility service.
B. The property included in this account
shall be classified according to the detailed accounts prescribed for utility
plant in service and the account shall be maintained in such detail as though
the property were in service. Separate subaccounts shall be maintained
hereunder for each utility department for which plant is held for future use.
Note: Materials and supplies, and meters, held in reserve, and
normal spare capacity of plant in service shall not be included in this
account.
355.
Construction work in progress
This account shall include the total of the balances of work
orders for utility plant in process of construction but not ready for service
at the date of the balance sheet.
356.
Utility plant acquisition
adjustmentsA. This account shall
include the difference between (a) the cost to the accounting utility of
utility plant acquired as an operating unit or system by purchase, merger,
consolidation, liquidation, or otherwise, and (b) the original cost, estimated,
if not known, of such property, less the amount or amounts credited by the
accounting utility at the time of acquisition to depreciation and amortization
reserves and contributions in aid of construction with respect to such
property.
B. The amounts recorded
in this account with respect to each property acquisition shall be amortized,
or otherwise disposed of, as the commission may approve or direct.
357.
Other utility plant
adjustmentsA. This account shall
include the difference between the original cost, estimated if not known, and
the book cost of utility plant to the extent that such difference is not
properly includible in account 356, Utility Plant Acquisition
Adjustments.
B. Amounts included in
this account shall be classified in such manner as to show the origin of each
amount and shall be disposed of as the commission may approve or direct.
Note: The provisions of this account shall not be construed as
approving or authorizing the recording of appreciation of utility plant.
Part 6
INCOME ACCOUNTS
Utility Operating Income
400.
Operating revenues
There shall be shown under this caption the total amount
included in the operating revenue accounts provided herein and in similar
accounts for other utility departments. Separate subaccounts shall be
maintained for each utility department.
401.
Operation and maintenance
expense
There shall be shown under this caption the total amount
included in the operation and maintenance expense accounts provided herein and
in similar accounts for other utility departments. Separate subaccounts shall
be maintained for each utility department.
403.
Depreciation expense
This account shall include the amount of depreciation expense
for the period covered by the income statement for all classes of depreciable
utility plant in service except such depreciation expense as is chargeable to
clearing accounts, or to merchandising, jobbing and contract work
activities.
If the utility is engaged in more than one utility service, a
separate account shall be kept hereunder for each utility service.
404.
Amortization
expense
This account shall include amortization charges applicable to
amounts included in the utility plant accounts for limited-term franchises,
licenses, patent rights, limited-term interests in land, and expenditures on
leased property where the service life of the improvements is terminable by
action of the lease. The charges to this account shall be such as to distribute
the book cost of each investment as evenly as may be over the period of its
benefit to the utility. Include also, when authorized by the commission,
amortization of extraordinary property losses. (See account 182, Extraordinary
Property Losses.)
408.
Taxes other than income taxesA.
This account shall include the amount of ad valorem, gross revenue or gross
receipts taxes, state unemployment insurance, franchise taxes, federal excise
taxes, social security taxes, and all other taxes assessed by federal, state,
county, municipal, or other local governmental authorities, except income
taxes.
B. This account shall be
charged in each accounting period with the amount of taxes which is applicable
thereto, with concurrent credits to account 236, Taxes Accrued, or account 165,
Prepayments, as appropriate. When it is not possible to determine the exact
amount of taxes, the amount shall be estimated and adjustments made in current
accruals as the actual tax levies become known.
C. The charges to this account shall be made
or supported so as to show the amount of each tax and the basis upon which each
charge is made. In the case of a utility rendering a number of utility
services, taxes includible in this account shall be assigned directly to the
utility department the operation of which gave rise to the tax insofar as
practicable. Where the tax is not attributable to a specific utility
department, it shall be distributed among the utility departments or nonutility
operations on an equitable basis.
D. This account shall be maintained according
to the subaccounts 408.1 and 408.2 inclusive as shown below.
Note A: Special assessments for street and similar improvements
shall be included in the appropriate utility plant or nonutility property
account.
Note B: Taxes specifically applicable to construction shall be
included in the cost of construction.
Note C: Gasoline and other sales taxes shall be charged as far
as practicable to the same account as the materials on which the tax is
levied.
Note D: Social security and other forms of so-called payroll
taxes shall be distributed to utility departments and to nonutility functions
on a basis related to payroll. Amounts applicable to construction shall be
charged to the appropriate plant account.
Note E: Interest on tax refunds or deficiencies shall not be
included in this account but in account 419, Interest and Dividend Income, or
431, Other Interest Expense, as appropriate.
408.1.
Taxes other than income taxes,
utility operating income
This account shall include those taxes recorded in account 408,
Taxes Other Than Income Taxes, which relate to utility operating income. This
account shall be maintained so as to allow ready identification of taxes
relating to Utility Operating Income (by department), Utility Plant Leased to
Others and Other Utility Operating Income.
408.2.
Taxes other than income taxes,
other income and deductions
This account shall include those taxes recorded in account 408,
Taxes Other Than Income Taxes, which relate to Other Income and
Deductions.
409.
Income taxesA. This account
shall include the amount of state and federal income taxes on income properly
accruable during the period covered by the income statement to meet the actual
liability for such taxes. Concurrent credits for the tax accruals shall be made
to account 236, Taxes Accrued, and as the exact amount of taxes becomes known,
the current tax accruals shall be adjusted by a charge or credit to this
account, unless such adjustment is properly includible in account 439,
Adjustments to Retained Earnings, so that this account as nearly as can be
ascertained shall include the actual taxes payable by the utility. (See General
Instructions 8 for prior period adjustments.)
B. The accruals for income taxes shall be
apportioned among utility departments and to Other Income and Deductions so
that, as nearly as practicable, each tax shall be included in the expenses of
the utility department or Other Income and Deductions, the income from which
gave rise to the tax. The income tax effect of amounts recorded in account 439,
Adjustments to Retained Earnings, shall be recorded in that account.
C. This account shall be maintained according
to the subaccounts 409.1, 409.2 and 409.3, inclusive, as shown below.
Note A: Taxes assumed by the utility on interest shall be
charged to account 431, Other Interest Expense.
Note B: Interest on tax refunds or deficiencies shall not be
included in this account but in account 419, Interest and Divided Income, or
account 431, Other Interest Expense, as appropriate.
409.1.
Income taxes, utility operating
income
This account shall include the amount of those state and
federal income taxes reflected in account 409, Income Taxes, which relate to
utility operating income. This account shall be maintained so as to allow ready
identification of tax effects (both positive and negative) relating to Utility
Operating Income (by department) and Utility Plant Leased to Others.
409.2.
Income taxes, other
income and deductions
This account shall include the amount of those state and
federal income taxes reflected in account 409, Income Taxes, (both positive and
negative), which relate to Other Income and Deductions.
409.3.
Income taxes, extraordinary
items
This account shall include the reflected amount of those state
and federal income taxes in account 409, Income Taxes (both positive and
negative), which relate to Extraordinary Items.
410.
Provision for deferred income
taxesA. This account shall be debited
and Accumulated Deferred Income Taxes shall be credited with an amount equal to
any deferral of taxes on income as provided by the texts of accounts 281, 282
and 283. There shall not be netted against entries required to be made to this
account any credit amounts appropriately includible in account 411, Income
Taxes Deferred in Prior Years-Credit.
B. This account shall be maintained according
to the subaccounts 410.1 and 410.2, inclusive, as shown below.
410.1.
Provisions for deferred income
taxes, utility operating income
This account shall include the amount of those deferred income
taxes reflected in account 410, Provision for Deferred Income Taxes, which
relate to Utility Operating Income (by department).
410.2.
Provisions for deferred income
taxes, other income and deductions
This account shall include the amount of those deferred income
taxes reflected in account 410, Provision for Deferred Income Taxes, which
relate to Other Income and Deductions.
411.
Income taxes deferred in prior
years-creditA. This account shall be
credited and Accumulated Deferred Income Taxes debited with an amount equal to
the portion of taxes on income payable for the year that is attributable to a
deferral of taxes on income in a prior year, in accordance with the plan of
deferred tax accounting provided by the texts of accounts 281, 282 and 283.
There shall not be netted against entries required to be made to this account
any debit amounts appropriately includible in account 410, Provision for
Deferred Income Taxes.
B. This
account shall be maintained according to the subaccounts 411.1 and 411.2,
inclusive, as shown below.
411.1.
Income taxes deferred in prior years-credit, utility operating
income
This account shall include the amount of those taxes deferred
in prior years-credit, reflected in account 411, Income Taxes Deferred in Prior
Years-Credit, which relate to Utility Operating Income (by department).
411.2.
Income taxes
deferred in prior years-credit, other income and deductions
This account shall include the amount of those taxes deferred
in prior years-credit, reflected in Account 411, Income Taxes Deferred in Prior
Years-Credit, which relate to Other Income and Deductions.
411.3.
Investment tax credit
adjustmentsA. This account shall be
debited with the amounts of investment tax credits related to utility property
that are credited to Account 255, Accumulated Deferred Investment Tax Credit,
by companies which do not apply the entire amount of the benefits of the
investment credit as a reduction of the overall income tax expense in the year
in which such credit is realized. (See Account 255.)
B. This account shall be credited with the
amounts debited to Account 255 for proportionate amounts of tax credit
deferrals allocated over the average useful life of utility property to which
the tax credits relate or such lesser period of time as may be adopted and
consistently followed by the company.
C. This account shall be maintained according
to the subaccounts 411.4 and 411.5, inclusive, as shown below.
411.4.
Investment tax credit
adjustments, utility operations
This account shall include the amount of those investment tax
credit adjustments reflected in Account 411.3, Investment Tax Credit
Adjustments, related to property used in Utility Operations (by
department).
411.5.
Investment tax credit adjustments, nonutility operations
This account shall include the amount of those investment tax
credit adjustments reflected in Account 411.3, Investment Tax Credit
Adjustments, related to property used in Nonutility Operations.
411.6.
Gains from
disposition of utility plant
This account shall include amounts relating to gains from the
sale or other disposition of utility plant recorded in accounts 300-353, or
property recorded in account 354, Property Held for Future Use, or account 121,
Nonutility Property, which had previously been classified in the aforementioned
utility plant accounts. Record income taxes on gains recorded in this account
in account 409, Income Taxes.
411.7.
Losses from disposition of
utility plant
This account shall include amounts relating to losses from the
sale or other disposition of utility plant recorded in accounts 300-353, or
property recorded in account 354, Property Held for Future Use, or account 121,
Nonutility Property, which had previously been classified in the aforementioned
utility plant accounts. Record the reductions in income taxes attributable to
losses recorded in this account in account 409, Income Taxes.
412.
Revenues from
utility plant leased to others
413.
Expenses of utility plant leased
to others
These accounts shall include, respectively, revenues from
utility property constituting a distinct operating unit or system leased by the
utility to others, and which property is properly includible in account 353,
Utility Plant Leased to Others, and the expenses attributable to such
property.
Note: Related operating taxes shall be recorded in account 408,
Taxes Other than Income Taxes, and income taxes shall be recorded in account
409, Income Taxes, identified separately.
Other Income and Deductions
OTHER INCOME
415.
Revenues from merchandising,
jobbing and contract work
416.
Costs and expenses of
merchandising, jobbing and contract work
These accounts shall include, respectively, all revenues
derived from merchandising, jobbing and contract work, including any profit or
commission accruing to the utility on jobbing work performed by it as agent
under contracts whereby it does jobbing work for another for a stipulated
profit or commission, and all expenses incurred in such activities.
Note A: Revenues and expenses of merchandising, jobbing, and
contract work shall be reported in these accounts, if a state regulatory body
having jurisdiction over the utility requires the net income therefrom to be
reported as other income; but the revenues and expenses shall be reported in
account 691, Revenues from Merchandising, Jobbing, and Contract Works and
account 692, Costs and Expenses of Merchandising, Jobbing, and Contract Work,
if such regulatory body requires the net income to be reported as an operating
income or expense item. In the absence of a requirement by a state regulatory
body, the utility may use these accounts or accounts 691 and 692 at its option,
in which case the practice of the utility must be consistent.
Note B: Related operating taxes shall be recorded in account
408, Taxes Other Than Income Taxes, and income taxes shall be recorded in
account 409, Income Taxes.
ITEMS
Account 415:
1. Charges
for tapping mains and installing services when not includible in account 312,
Service Connections, Traps and Accessories.
2. Revenues less discounts and allowances
from merchandising, jobbing or contract work.
Account 416:
1. Costs
of materials sold or used for jobbing or contract work including
transportation, storage and handling.
2. Payroll and related labor cost and
expenses, also employees engaged in jobbing or contract work.
3. Inventory adjustments applicable to
jobbing stock.
4. Light, heat and
power.
5. Losses from uncollectible
accounts.
6. Shop and tool
expenses.
418.
Nonoperating rental income
This account shall include all rent revenues and related
expenses of land, buildings, or other property included in account 121,
Nonutility Property.
Note: Related operating taxes shall be recorded in account 408,
Taxes Other Than Income Taxes, and income taxes shall be recorded in account
409, Income Taxes.
419.
Interest and dividend income
This account shall include interest revenues on securities,
loans, advances, special deposits, tax refunds and all other interest-bearing
assets, and dividends on stock of other companies, whether the securities on
which the interest and dividends are received are carried as investments or
included in sinking or other special fund accounts.
Note: Related operating taxes shall be recorded in account 408,
Taxes Other Than Income Taxes, and income taxes shall be recorded in account
409, Income Taxes.
421.
Miscellaneous nonoperating income
This account shall include all revenue and expense items,
except taxes, properly includible in the income account and not provided for
elsewhere. Related operating taxes shall be recorded in account 408, Taxes
Other Than Income Taxes, and income taxes shall be recorded in account 409,
Income Taxes.
421.1.
Gain on
disposition of property
This account shall be credited with the gain on the sale,
conveyance, exchange or transfer of property other than that property recorded
in, or previously recorded in, accounts 300-353. (See Utility Plant
Instructions 6B and 6D.) Income Taxes on Gains recorded in this account shall
be recorded in account 409, Income Taxes. (See account 411.6, Gains from
Disposition of Utility Plant.)
OTHER INCOME DEDUCTIONS
421.2.
Loss on disposition of
property
This account shall be charged with the loss on the sale,
conveyance, exchange or transfer of property other than that property recorded
in, or previously recorded in, accounts 300-353. (See Utility Plant
Instructions 6B and 6D.) The reduction in income taxes attributable to losses
recorded in this account shall be recorded in account 409, Income Taxes. (See
account 411.7, Losses from Disposition of Utility Plant.)
425.
Miscellaneous amortization
This account shall include amortization charges not includible
in other accounts which are properly deductible in determining the income of
the utility before interest charges. Charges includible herein, if significant
in amount, must be in accordance with an orderly and systematic amortization
program.
ITEMS
1. Amortization
of utility plant acquisition adjustments or of intangibles included in utility
plant in service when not authorized to be included in utility operating
expenses by the commission.
2.
Amortization of amounts in account 182, Extraordinary Property Losses, when not
authorized to be included in utility operating expenses by the
commission.
3. Amortization of
capital stock expenses when in accordance with a systematic amortization
program.
426.
Miscellaneous income deductions
This account shall include miscellaneous expense items which
are nonoperating in nature but which are properly deductible before determining
total income before interest charges.
ITEMS
1. Donations for
charitable, social or community welfare purposes.
2. Life insurance of officers and employees
where utility is beneficiary. (Net premiums less increase in cash surrender
value of policies.)
3. Penalties or
fines for violation of statutes pertaining to regulation.
Interest Charges
427.
Interest on long-term debt
A. This account shall include in each
accounting period the amount of interest applicable thereto on outstanding
long-term debt issued or assumed by the utility, the liability for which is
included in account 221, Bonds or account 224, Other Long-Term Debt.
B. This account shall be so kept or supported
as to show the interest accruals on each class and series of longterm debt.
Note: This account shall not include interest on nominally
issued or nominally outstanding long-term debt, including securities
assumed.
428.
Amortization of debt discount and expense
A. This account shall include in each
accounting period the portion of unamortized debt discount and expense on
outstanding long-term debt which is applicable to such period. Amounts charged
to this account shall be credited concurrently to account 181, Unamortized Debt
Discount and Expense.
B. This
account shall be so kept or supported as to show the debt discount and expense
on each class and series of long-term debt.
429.
Amortization of premium on
debt-cr.A. This account shall include
in each accounting period the portion of unamortized net premium on outstanding
long-term debt which is applicable to such period. Amounts credited to this
account shall be charged concurrently to account 251, Unamortized Premium on
Debt.
B. This account shall be so
kept or supported as to show the premium on each class and series of long-term
debt
430.
Interest on debt to associated companies
A. This account shall include in each
accounting period, the interest accrued on amounts included in account 223,
Advances from Associated Companies, and on all other obligations to associated
companies.
B. The records
supporting the entries to this account shall be so kept as to show to whom the
interest is to be paid, the period covered by the accrual, the rate of interest
and the principal amount of the advances or other obligations on which the
interest is accrued.
431.
Other interest expense
This account shall include in each accounting period all
interest charges not provided for elsewhere.
ITEMS
1. Interest on
notes payable on demand, or maturing one year or less from date and on open
accounts, except notes and accounts with associated companies.
2. Interest on customers' deposits.
3. Interest on claims and judgments, tax
assessments, and assessments for public improvements past due.
4. Income and other taxes levied upon
bondholders of utility and assumed by it.
432.
Interest charged to
construction
This account shall include concurrent credits for interest
charged to construction based upon the net cost for the period of construction
of borrowed funds used for construction purposes and a reasonable rate upon
other funds when so used. No interest shall be capitalized on plant which is
completed and ready for service.
Extraordinary Items
434.
Extraordinary income
This account shall be credited with nontypical, noncustomary,
infrequently recurring gains, which would significantly distort the current
year's income computed before Extraordinary Items, if reported other than as
extraordinary items. The applicable income tax effects of this account shall be
recorded in account 409, Income Taxes, identified separately. (See General
Instruction 7.)
435.
Extraordinary deductions
This account shall be debited with nontypical, noncustomary,
infrequently recurring losses, which would significantly distort the current
years income computed before Extraordinary Items, if reported other than as
extraordinary items. The applicable income tax effects of this account shall be
recorded in account 409, Income Taxes, identified separately. (See General
Instruction 7.)
Part
9
OPERATION AND MAINTENANCE ACCOUNTS
Plant Operation and Maintenance
600.
Salaries and wages
This account shall include the cost of labor in operating and
maintaining all sewerage utility plant including collecting system, pumping
system, and treatment and disposal system facilities.
ITEMS
1. Operating
collecting system facilities.
2.
Operating pumping system facilities.
3. Operating treatment and disposal system
facilities.
620.
Fuel or power purchased for pumping
This account shall include the cost of all power purchased for
use in the operation of pumping facilities and the cost of fuel purchased for
direct use in the operation of such facilities.
ITEMS
1. Diesel fuel
purchased.
2. Electric power
purchased.
3. Gasoline
purchased.
4. Gas
purchased.
5. Other fuel or power
purchased.
630.
Chemicals
This account shall include the cost of all chemicals used in
the treatment of sewage.
640.
Supplies and expenses
This account shall include the cost of supplies used and
expenses incurred in the operation of sewerage plant.
ITEMS
1. General
operating supplies such as tools, gaskets, packing waste, gauge glasses, hose,
indicating lamps, record and report forms, etc.
2. First-aid supplies and safety
equipment.
3. Building service
expenses.
4. Rents.
5. Utility service.
6. Transportation, meals and incidental
expenses.
650.
Repairs of sewerage plant
This account shall include the amount of bills from others for
repairs made to the sewerage plant and the repair parts for such plant. It does
not include the cost of labor of the utility's own plant operating
force.
ITEMS
1. Contract work
in repairing plant and in rearranging or relocating plant not
retired.
2. Repair parts and
materials used in maintenance of sewerage plant.
660.
Transportation expenses
A. This account shall include the cost of
labor, materials used and expenses incurred in the operation and maintenance of
general transportation equipment of the utility.
B. This account may be used as a clearing
account in which event the charges hereto shall be cleared by apportionment to
the appropriate operating expense, utility plant, or other accounts on a basis
which will distribute the expenses equitably. Credits to this account shall be
made in such detail as to permit ready analysis.
ITEMS
1. Depreciation
of transportation equipment.
2.
Insurance on transportation equipment.
3. License fees for vehicles and
drivers.
4. Rents for equipment and
garages.
5. Repairs of
transportation equipment.
6.
Supplies; such as, gas, oil, tires, tubes, grease, etc.
General Expenses
680.
Administrative and
general salaries
This account shall include the cost of supervision and labor
incurred in administrative and customer accounts.
ITEMS
1. Accounting and
clerical work on customers accounts on general records.
2. Stenographic work.
3. Supervision and
administration.
681.
Office supplies and other expenses
This account shall include office supplies and other expenses
incurred in connection with customer accounts, sales and general administration
of the utility's operations.
ITEMS
1. Address plates
and supplies.
2. Automobile
service, including charges through clearing account.
3. Bank messenger and service
charges.
4. Books, periodicals,
bulletins and subscriptions to newspapers, newsletter, tax service,
etc.
5. Building service expenses
for customer accounts, and administrative and general purposes.
6. Commissions or fees to others for
collecting revenues.
7.
Communication service expenses.
8.
Cost of individual items of office equipment used by general departments which
are of small value or short life.
9. Meals, traveling and incidental
expenses.
10. Membership fees and
dues in trade, technical and professional associations paid by utility for
employees. (Company memberships are includible in account 689.)
11. Binders.
12. Office supplies and expenses.
13. Payment of court costs, witness fees and
other expenses of legal department.
14. Postage, printing and
stationery.
15. Rent of office
equipment and other general plant.
16. Repairs of office
equipment.
682.
Outside services employed
A. This
account shall include the fees and expenses of professional consultants and
others for general services which are not applicable to a particular operation
function nor to other accounts. It shall include also the pay and expenses of
persons engaged for a special or temporary administrative or general purpose in
circumstances where the person so engaged is not considered an employee of the
utility.
B. This account shall be
so maintained as to permit ready summarization according to the nature of
service and the person furnishing the same.
ITEMS
1. Fees, pay and
expenses of accountants and auditors, actuaries, appraisers, attorneys,
engineering consultants, management consultants, negotiators, public relations
counsel, tax consultants, etc.
2.
Supervision fees and expenses paid under contracts for general management
service.
Note: Do not include inspection and brokerage fees and
commissions chargeable to other accounts or fees and expenses in connection
with security issues which are includible in the expenses of issuing
securities.
684.
Insurance expense
A. This account shall include the cost of
insurance or of reserve accruals (1) to protect the utility against losses and
damages to owned or leased property used in its utility operations and (2) to
protect the utility against injuries' and damages' claims of employees or
others, losses of such character not covered by insurance, and expenses
incurred in settlement of injuries and damages' claims.
B. Recoveries from insurance companies or
others for property damages shall be credited to the account charged with the
cost of the damage. If the damaged property has been retired, the credit shall
be to the appropriate account for accumulated provision for
depreciation.
C. Reimbursements
from insurance companies, or others, for expenses charged hereto on account of
injuries and damages, and insurance dividends or refunds, shall be credited to
this account.
686.
Employees pensions and benefits
A. This account shall include pensions paid
to or on behalf of retired employees, or accruals to provide for pensions, or
payments for the purchase of annuities for the purpose, when the utility has
definitely, by contract, committed itself to a pension plan under which the
pension funds are irrevocably devoted to pension purposes, and payment for
employee accident, sickness, hospital, and death benefits, or insurance
therefor. Include, also, expenses incurred in medical, educational or
recreational activities for the benefit of employees.
B. The utility shall maintain a complete
record of accruals or payments for pensions and be prepared to furnish full
information to the commission of the plan under which it has created or
proposes to create a pension fund and a copy of the declaration of trust or
resolution under which the pension plan is established.
C. There shall be credited to this account
the portion of pensions and benefits expenses which is applicable to nonutility
operations or which is charged to construction unless such amounts are
distributed directly to the accounts involved and are not included herein in
the first instance.
688.
Regulatory commission expenses
A. This account shall include all expenses
(except pay of regular employees only incidentally engaged in such work)
property includible in utility operating expenses, incurred by the utility in
connection with formal cases before regulatory commissions, or other regulatory
bodies, or cases in which such a body is a party, including payments made to a
regulatory commission for fees assessed against the utility for pay and
expenses of such commission, its officers, agents, and employees.
B. Amounts of regulatory commission expense
which by approval or direction of the commission are to be spread over future
periods shall be charged to account 183, Other Deferred Debits, and amortized
by charges to this account.
C. The
utility shall be prepared to show the cost of each formal case.
689.
Miscellaneous general
expenses
This account shall include the cost of expenses incurred in
connection with the general management of the utility not provided for
elsewhere.
ITEMS
1. Industry
association dues for company memberships.
2. Contributions for conventions and meetings
of the industry.
3. Experimental
and general research work for the industry.
4. Communication service not chargeable to
other accounts.
5. Trustee,
registrar, and transfer agent fees and expenses.
6. Stockholders meeting expenses.
7. Dividend and other financial
notices.
8. Printing and mailing
dividend checks.
9. Directors' fees
and expenses.
10. Publishing and
distributing annual reports to stockholders.
11. Advertising. (See note below)
12. Public notices of financial operating,
and other data required by regulatory statutes, not including however notices
required in connection with security issues or acquisitions of
property.
13. Rents for property
used in customer accounts, or administrative and general functions.
Note: The cost of any advertising for the purpose of
influencing public opinion as to the election of public officers, referenda,
proposed legislation, proposed ordinances, repeal of existing laws or
ordinances, approval or revocation of franchises, or for the purpose of
influencing the public or its elected officials, in respect to political
matters shall not be included herein but charged to account 426, Other Income
Deductions.
690.
Uncollectible accounts
This account shall be charged with losses from uncollectible
accounts or with accruals to provide for anticipated losses from uncollectible
utility revenues. Such accruals shall be credited to account 144, Accumulated
Provision for Uncollectible Accounts. If the accrual method is used, losses
from uncollectible accounts shall be charged to account 144.
691.
Revenues from merchandising,
jobbing and contract work
692.
Costs and expenses of
merchandising, jobbing and contract work
These accounts shall include, respectively, all revenues
derived from merchandising, jobbing and contract work, including any profit or
commission accruing to the utility on jobbing work performed by it as agent
under contracts whereby it does jobbing work for another for a stipulated
profit or commission, and all expenses incurred in such activities.
Note A: The revenues and expenses of merchandising, jobbing and
contract work shall be reported in this account if a state regulatory body
having jurisdiction over the utility requires the net income therefrom to be
reported as an operating expense item; but the amounts shall be reported in
accounts 415 and 416 if such regulatory body requires such income to be
reported as nonoperating income. In the absence of a requirement by a state
regulatory body, the utility may use this account or accounts 415 or 416, at
its option, in which case the practice of the utility must be
consistent.
Note B: See accounts 415 and 416 for list of items includible
herein.
Note C: Related operating taxes shall be recorded in account
403, Taxes Other Than Income Taxes, and income taxes shall be recorded in
account 409, Income Taxes.
