New Mexico Administrative Code
Title 17 - PUBLIC UTILITIES AND UTILITY SERVICES
Chapter 12 - WATER SERVICES
Part 720 - UNIFORM SYSTEMS OF ACCOUNTS AND ANNUAL REPORT FORMS FOR WATER UTILITIES
Section 17.12.720.16 - BALANCE SHEET ACCOUNTS
Universal Citation: 17 NM Admin Code 17.12.720.16
Current through Register Vol. 35, No. 18, September 24, 2024
A. Utility Plant:
(1) 101 - Utility Plant in
Service:
(a) This account shall include the
original cost of utility plant, included in the plant accounts prescribed
herein owned and used by the utility in its utility operations, and having an
expectation of life in service of more than one (1) year from date of
installation.
(b) The cost of
additions to and betterments of property leased from others which are
includable in this account shall be maintained in subdivisions separate and
distinct from those relating to owned property. (See Utility Plant Instruction
5.)
(2) 104 - Utility
Plant Leased to Others:
(a) 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.
(3) 105 -
Property Held for Future Use:
(a) 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 but retired from
such service and held pending its reuse in the future, under a definite plan,
in utility service.
(b) In the
event that property recorded in this account shall no longer be needed or
appropriate for future utility operations, the company shall notify the
Commission of such condition and request approval to remove such property from
this account.
(c) Gains or losses
from the sale of land and land rights or other disposition of such property
previously recorded in this account and not placed in utility service shall,
unless otherwise authorized or required by the Commission, be recorded directly
in account 422, Gains (Losses) from Disposition of Property. However, when
determined to be significant by the Commission the gain or loss shall be
transferred to account 253, Other Deferred Credits, or account 183, Other
Deferred Debits. Such deferred amounts shall then be amortized to account 422,
Gains (Losses) from Disposition of Property, unless otherwise authorized or
required by the Commission.
(d) 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. Note:
Materials and supplies, meters held in reserve, or normal spare capacity of
plant in service shall not be included in this account.
(4) 106 - Utility Plant Purchased or Sold:
(a) 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 in accordance with Utility Plant
Instruction 4.
(b) Within six (6)
months from the date of acquisition or transfer of property recorded herein
there shall be filed with the Commission the proposed journal entries to clear
from this account the amounts recorded herein.
(5) 107 - 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.
(6) 110 -
Accumulated Provision for Depreciation and Amortization of Utility Plant:
(a) This account shall be credited with the
following:
(i) amounts charged to account 403,
Depreciation Expense, and any other appropriate amortizations affecting utility
plant matters;
(ii) amounts of
depreciation applicable to utility properties acquired as operating units or
systems (see Utility Plant Instruction 4);
(iii) amounts chargeable to account 182,
Extraordinary Property Losses, when authorized by the Commission; and
(iv) 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 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.
B. Other Property and Investments:
(1) 121 - Nonutility Property:
(a) 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 property includable in
account 105, Property Held for Future Use.
(b) This account shall be subdivided so as to
show the amount of property used in operations which are nonutility in
character but nevertheless constitute a distinct operating activity of the
company (such as operation of a sewer department where such activity is not
classed as a utility) and the amount of miscellaneous property not used in
operations. The records in support of each subaccount shall be maintained so as
to show an appropriate classification of the property.
(2) 124 - Other Investments:
(a) This account shall include the book cost
of investments not accounted for elsewhere.
(b) The records shall be maintained in such
manner as to show the amount of each investment and the investment advances to
each person.
(3) 125 -
Special Funds: This account shall include the amount of cash 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.
C. Current and Accrued Assets: Current and accrued assets are cash; those assets which are readily convertible into cash or are held for current use in operations or construction; current claims against others, payment of which is reasonably assured; and amounts accruing to the utility which are subject to current settlement, except such items for which accounts other than those designated as current and accrued assets are provided. There shall not be included in the group of accounts any accounts designated as current and accrued assets of any item, the amount or collectibility of which is not reasonably assured unless an adequate provision for possible loss has been provided. Items of current character but of doubtful value may be written down and for record purposes carried in these accounts at nominal value.
(1) 131 - Cash and Working
Funds: This account shall include the amount of cash on hand and in banks and
cash 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 (1) year which are
not offset by current liabilities shall not be charged to this account but to
account 125, Special Funds.
(2) 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, certificates of deposit, 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.
(3) 142 -
Customer Accounts Receivable:
(a) This account
shall include amounts due from customers for utility service and for
merchandising, jobbing, and contract work. This account shall not include
amounts due from associated companies.
(b) This account shall be maintained so as to
show separately the amounts due from merchandising, jobbing, and contract
work.
(4) 143 - Other
Accounts Receivable:
(a) This account shall
include amounts due the utility upon or from notes receivable, or other debt
owed to the utility, and open accounts other than amounts due from associated
companies and 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 an working funds. (See account
131, Cash and Working Funds.)
(5) 144 - Accumulated Provision for
Uncollectible Accounts:
(a) 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.
(b) This account shall be
subdivided to show the provision applicable to the following classes of
accounts receivable: Utility Customers; Merchandising; Jobbing and Contract
Work; Officers and Employees; Other.
(i) Note
A: Accretions to this account shall not be made in excess of a reasonable
provision against losses of the character provided for.
(ii) Note B: If provisions for uncollectible
notes receivable or for uncollectible receivables from associated companies are
necessary, separate subaccounts therefor shall be established under the account
in which the receivable is carried.
(6) 146 - Accounts Receivable from Associated
Companies: These accounts shall include notes and drafts upon which associated
companies are liable and which mature and are expected to be paid in full not
later than one (1) year from date of issue, together with any interest thereon
and debit balances subject to current settlement in open accounts with
associated companies. Items which do not bear a specific due date but which
have been carried for more than twelve (12) months and items which are not paid
within twelve (12) months from due date shall be transferred to account 124,
Other Investments. Note: On the balance sheet accounts receivable from an
associated company may be set off against accounts payable to the same
company.
(7) 150 - Materials and
Supplies:
(a) This account shall include the
cost of fuel on hand and unapplied materials (except meters). It shall include
also 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.
(i) 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.
(ii) 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.
(iii) 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.
(d) Items
(i) Invoice price of materials less cash or
other discounts.
(ii)
Transportation charges when practicable to include as part of the cost of
particular materials to which they relate.
(iii) Custom duties and excise
taxes.
(iv) Costs of inspection and
special tests prior to acceptance.
(v) Insurance and other directly assignable
charges.
(8)
166 - 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.
(9) 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.
D. Equity Capital:
(1) 201 Common Stock:
(2) 215 - Accumulated Retained Earnings (or
Losses): This account shall include the amount of all retained earnings,
including those 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.
(3) 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.)
(a) 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.
(b) 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.
(c) 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.
E. Long Term Debt:
(1) 223 - Advances from Associated Companies:
(a) 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 which are
includable in account 233, Notes Payable to Associated Companies, or account
234, Accounts Payable to Associated Companies.
(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.
(2) 224 - Other Long Term Debt:
(a) This account shall include, until
maturity, all long term debt. This covers such items as notes, loans, receivers
certificates, real estate mortgages executed or assumed, assessments for public
improvements, notes and unsecured certificates of indebtedness now owned by
associated companies, receipts outstanding for long term debt, and other
obligations maturing more than eighteen (18) months from date of issue or
assumption.
(b) Records shall be
maintained to show separately for each item all details as to date of
obligation, date of maturity, interest dates and rates, security for the
obligation, etc.
F. Current and Accrued Liabilities: Current and accrued liabilities are those obligations which have either matured or which become due within one (1) year from the date thereof; except, however, bonds, receivers' certificates, and similar obligations which shall be classified as long term debt until date of maturity; accrued taxes, such as income taxes, which shall be classified as accrued liabilities even though payable more than one (1) year from date; compensation awards, which shall be classified as current liabilities regardless of date due; and minor amounts payable in installments which may be classified as current liabilities. If a liability is due more than one (1) year from date of issuance or assumption by the utility, and it shall be credited to a long term debt of issuance or assumption by the utility, it shall be credited to a long term debt account appropriate for the transaction, except, however, the current liabilities previously mentioned.
(1) 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 (1) year from date of issue, to other than associated
companies.
(2) 232 - Accounts
Payable: This account shall include all amounts payable by the utility within
one (1) year which are not provided for in other accounts.
(3) 233 - Notes Payable to Associated
Companies:
(4) 234 - Accounts
Payable to Associated Companies: These accounts shall include amounts owed to
associated companies on notes, drafts, acceptances, or other similar evidences
of indebtedness, and open accounts payable on demand for not more than one (1)
year from date of issuance or creation. Note: Exclude from these accounts notes
and accounts which are includable in account 223, Advances from Associated
Companies.
(5) 235 - Customer
Deposits: This account shall include all amounts deposited with the utility by
customers as security for the payment of bills.
(6) 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 166,
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 9.
(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.
(7) 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.
(8) 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:
(a) Dividends declared but not
paid.
(b) Matured long term
debt.
(c) Matured
interest.
(d) Taxes collected
through payroll deductions or otherwise, including sewage charges collected by
the utility, pending transmittal to the proper taxing authority.
G. Deferred Credits:
(1) 252 - Advances for Construction: This
account shall include advances by, or on behalf of, customers for construction
which are to be refunded either wholly or in part. When a person 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 271, Contributions in Aid of
Construction.
(2) 253 - Other
Deferred Credits: This account shall include gains on disposition of property,
net of income taxes deferred by authorization of the Commission, 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.
(3) 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 412, Investment Tax Credits, debited with all investment tax credits
deferred by companies authorized to use deferral accounting rather than
recognizing in the income statement the total benefits of the investment tax
credit as 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
412.)
(b) This account shall be
debited and account 412 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.
Contraentries 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 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.
H. Operating Reserves: 265 - Miscellaneous Operating Reserves:
(1) This account shall include all operating
reserves maintained by the utility.
(2) 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.
(3) 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.
I. 271 - Contributions in Aid of Construction:
(1) 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.
(2) The
credits to this account shall not be transferred to any other account without
the approval of the Commission.
(3)
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.
(4) 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, Advances for Construction.)
J. 283 - Accumulated Deferred Income Taxes:
(1) 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 current use of deductions, including accelerated amortization or
liberalized depreciation in the computation of income taxes, which deductions
for general accounting purposes will not be fully reflected in the utility's
determination of annual net income until subsequent years.
(2) 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.
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