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 17.12.720.18 - INCOME ACCOUNTS
Universal Citation: 17 NM Admin Code 17.12.720.18
Current through Register Vol. 35, No. 18, September 24, 2024
A. Utility Operating Income:
(1) 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 department. Separate subaccounts shall be maintained for each
utility department.
(2) 401 -
Operation and Maintenance Expense: There shall be shown under this caption the
total amount included in the expense accounts provided herein.
(3) 403 - Depreciation Expense:
(a) This account shall include the amount of
depreciation expense for all classes of depreciable utility plant in
service.
(b) The utility shall keep
such records of property and property retirements as will reflect the service
life of property which has been retired and also such records as will reflect
the percentage of salvage and cost of removal for property retired.
(c) Note A: Depreciation expense applicable
to property included in account 104, Utility Plant Leased to Others, shall be
charged to account 413, Income from Utility Plant Leased to Others.
(4) 408 - Taxes Other Than Income
Taxes:
(a) This account shall include the
amount of ad valorem, gross revenue or gross receipts taxes, regulatory agency
general assessments for purposes of public utility regulation, 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 applicable thereto, with concurrent
credits to account 236, Taxes Accrued, or account 166, 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 includable in this
account shall be assigned directly to the utility department the operation of
which gave rise to the tax in so far 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.
(5) 409 - Income
Taxes:
(a) This account shall include the
amount of state and federal income taxes 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 includable 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 Instruction 9 for prior
period adjustment.)
(b) The
accruals for state and federal income taxes shall be apportioned to Utility
Operating Income (by department), Other Income and Deductions, and
Extraordinary Items so that, as nearly as practicable, each tax shall be
included in the expenses of the utility department, Other Income and
Deductions, or Extraordinary Items, 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. The tax effects relating
to interest charges, other than interest specifically applicable to
indebtedness on property in accounts 121 and 124, shall be included in account
409, Income Taxes, Utility Operating Income.
(c) Note A: Taxes assumed by the utility on
interest shall be charged to account 431, Other Interest Expense.
(d) Note B: Interest on tax refunds or
deficiencies shall not be included in this account but in account 419, Interest
and Dividend Income, or account 431, Other Interest Expense, as
appropriate.
(6) 410 -
Provision for Deferred Income Taxes: 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 account 283.
(7) 412 - Investment Tax Credits:
(a) This account shall be debited with the
total amount of investment tax credits used in calculating the reported current
year's income taxes, except to the extent that such investment tax credits are
to be passed on to customers currently, as approved or directed by the
Commission.
(i) Where the investment tax
credits are passed on to customers currently, they are to be treated solely as
a reduction in income taxes for the year and no entries would be
necessary.
(ii) When a company is
using deferral accounting for the investment tax credits allowed for the
current year, account 255, Accumulated Deferred Investment Tax Credits, shall
be credited with an equal amount of the investment tax credits debited to this
account.
(b) A company
which has deferred its investment tax credits will amortize these deferred tax
amounts by crediting this account and debiting account 255. Such annual
amortization shall be allocated proportionately over the average useful life of
the property to which the tax credits relate or such lesser period as may be
adopted and consistently used by the company.
(c) This account shall be kept so that the
debits and credits relating to the utility and to each nonutility operation may
be readily identified.
(8) 413 - Income from Utility Plant Leased to
Others:
(a) This account shall include
revenues from utility property leased by the utility to others, and which
property is properly includable in account 104, Utility Plant Leased to Others,
and the expenses attributable to such property. Records shall show separately
revenues and expenses.
(b) Note:
Related operating taxes shall be recorded in account 408, Taxes Other than
Income Taxes, Utility Operating Income, and income taxes shall be recorded in
account 409, Income Taxes, Utility Operating Income, identified
separately.
(9) 414 -
Gains (Losses) from Disposition of Utility Property:
(a) This account shall include, when
authorized or required by the Commission, gains and losses from the sale,
conveyance, exchange, or transfer of utility property to another. (See Utility
Plant Instructions 4, 6, and 9 and account 422, Gains (Losses) from Disposition
of Property.) The income tax effect attributable to gains and losses recorded
in this account shall be recorded in account 409, Income Taxes, Utility
Operating Income.
(b) This account
shall be maintained so that the transactions and details underlying each gain
or loss will be readily identifiable.
B. Other Income and Deductions: Other Income:
(1) 415 - Revenues from Merchandising,
Jobbing, and Contract Work:
(2) 416
- Costs and Expenses of Merchandising, Jobbing, and Contract Work:
(a) This account shall include, respectively,
all revenues derived from the sale of merchandise and jobbing or 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.
(b) Records in
support of this account shall be kept as to permit ready summarization of
revenues, costs, and expenses by such major items as are feasible.
(3) 417 - Income from Nonutility
Operations:
(a) This account shall include
revenues and expenses applicable to operations which are nonutility in
character but nevertheless constitute activity of the enterprise as a whole,
such as performing work for and customer's facilities, providing sewage
disposal service where applicable statutes do not define such operation as a
utility, or the operation of any organization for furnishing services to
others.
(b) Items: Revenues:
(i) Charges for installing meters owned by
customers.
(ii) Charges for tapping
mains and installing services when not includable in account 345,
Services.
(iii) Revenues from sales
of meters to customers or others for installation on customers'
premises.
(iv) Revenues from sale
of water appliances and from piping and other jobbing or contract
work.
(v) Discounts and allowances
made in settlement of bills for merchandise and jobbing work.
(c) Expenses:
(i) Cost of merchandise sold and materials
used for jobbing work, including transportation, storage, and
handling.
(ii) Payroll and related
labor costs and expenses of employees engaged in selling, delivery, and
installation of appliances or of jobbing or contract work.
(iii) Clerical labor and expenses in
merchandise and jobbing activities.
(iv) Inventory adjustments applicable to
merchandise and jobbing stock.
(v)
Light, heat, and power.
(vi) Losses
from uncollectible accounts.
(vii)
Shop expense.
(viii) Tool
expenses.
(ix) Supervision of
merchandise and jobbing activities.
(4) 418 - Nonoperating Rental Income:
(a) This account shall include all rent
revenues and related expenses of land, buildings, or other property included in
account 121, Nonutility Property, which is not used in operations covered by
account 417.
(b) The expenses shall
include all elements of costs incurred in the ownership and rental of the
property and the accounts shall be maintained so as to permit ready
summarization as follows: Operation, Maintenance, Rents, Depreciation,
Amortization.
(c) Note: Related
operating taxes shall be recorded in account 408.2, Taxes Other Than Income
Taxes, Other Income and Deductions, and income taxes shall be recorded in
account 409.2, Income Taxes, Other Income and Deductions.
(5) 419 - Interest and Dividend Income:
(a) This account shall include interest
revenues on securities, loans, notes, advances, special deposits, tax refunds,
and all other interest-bearing assets and dividends on stocks 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.
(b) All expenses,
excluding operating taxes and income taxes, applicable to security investments
and to interest and dividend revenues thereon, shall be charged
hereto.
(c) Note A: Related
operating taxes shall be recorded in account 408, Taxes Other Than Income
Taxes, Other Income and Deductions, and income taxes shall be recorded in
account 409, Income Taxes, Other Income and Deductions.
(d) Note B: Interest accrued, the payment of
which is not reasonably assured, dividends receivable which have not been
declared or guaranteed, and interest or dividends upon reacquired securities
issued or assumed by the utility shall not be recorded.
(6) 421 - Miscellaneous Nonoperating Income:
(a) This account shall include all revenue
and expense items, except taxes, properly includable in the income account and
not provided elsewhere. Related operating taxes shall be recorded in account
408, Taxes Other Than Income Taxes, Other Income and Deductions, and income
taxes shall be recorded in account 409, Income Taxes, Other Income and
Deductions.
(b) Items:
(i) Profit on sale of timer. (See Utility
Plant Instruction 6.)
(ii) Profits
from operations of others realized by the utility under contracts.
(iii) Gain on disposition of investments and
reacquisition and resale or retirement of utility's debt securities and
investment.
(7) 422 - Gains (Losses) from Disposition of
Property:
(a) This account shall include
gains and losses on the sale, conveyance, exchange, or transfer of utility or
other property to another unless otherwise authorized or required by the
Commission. (See Utility Plant Instructions 4, 6 and 9, and account 414, Gains
(Losses) from Disposition of Utility Property.) The income tax effect
attributable to gains and losses shall be recorded in account 409, Income
Taxes, Other Income and Deductions.
(b) This account shall be maintained so that
the transactions and details underlying each gain or loss will be readily
identifiable.
(8) Other
Income Deductions: 425 - Miscellaneous Amortizations:
(a) This account shall include amortization
charges not includable in other accounts which are properly deductible in
determining the income of the utility before interest charges.
(b) Items:
(i) 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.
(ii) Amortization of
amounts in account 182, Extraordinary Property Losses, when not authorized to
be included in utility operating expenses by the Commission.
(9) 426 - Miscellaneous
Income Deductions:
(a) This account shall
include miscellaneous expense items which are nonoperating in nature but which
are properly deductible before determining total income before interest
charges. Separate subaccounts shall be maintained for each category of expense
as indicated by the following item list.
(b) Items:
(i) Donations for charitable, social, or
community welfare purposes.
(ii)
Life insurance of officers and employees where utility is beneficiary (net
premiums less increase in such surrender value of policies).
(iii) Penalties or fines for violation of
statutes pertaining to regulation.
(iv) Expenditures for the purpose of:
a) Influencing public opinion with respect to
the election or appointment of public officials, or the adoption, repeal,
revocation, or modification of referenda, legislation, or ordinances.
b) Influencing public opinion with respect
to obtaining approval, modification, or revocation of franchises.
c) Influencing the decisions of public
officials not including such expenditures which are directly related to
appearances before regulatory or other governmental bodies in connection with
the utility's existing or proposed operations.
(v) Loss relating to investments in
securities written off or written down.
(vi) Loss on sale of investments.
(vii) Loss on reacquisition, resale, or
retirement of utility's debt securities.
(viii) Preliminary survey and investigation
expenses related to abandoned projects when not written off to the appropriate
operating expense account.
(ix)
Golf club dues, social club dues, and service club dues (Kiwanis, Rotary,
etc.), house charges, and items of a similar nature whether such expenditures
are made directly by the utility or indirectly by payment or reimbursement to
associated companies, officers, or other employees, or by any other employees,
or by any other direct or indirect means.
C. Interest Charges:
(1) 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 224, Long Term Debt.
(b)
This account shall be so kept or supported as to show the interest accruals on
each item of long term debt.
(2) 431 - Other Interest Expense:
(a) This account shall include in each
accounting period all interest charges not provided for elsewhere.
(b) Items:
(i) Interest on notes payable on demand or
maturing one (1) year or less from date and on open accounts, except notes and
accounts with associated companies.
(ii) Interest on customers'
deposits.
(iii) Interest on claims
and judgments, tax assessments, and assessments for public improvements past
due.
(iv) Income and other taxes
levied upon bondholders of utility and assumed by it.
(v) Interest on debt to associated
companies.
D. Extraordinary Items:
(1) 433 - Extraordinary Income: Upon approval
of the Commission, 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.
(2) 434 - Extraordinary
Deductions: Upon approval of the Commission, this account shall be debited with
nontypical, noncustomary, infrequently recurring losses which would
significantly distort the current year's income computed before extraordinary
items. The applicable income tax effects of this account shall be recorded in
account 409, Income Taxes, identified separately.
Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.