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pdfPART 1767—ACCOUNTING REQUIREMENTS FOR RUS ELECTRIC
BORROWERS
§§ 1767.1–1767.9
Subpart B—Uniform System of
Accounts
Subpart A—General [Reserved]
Sec.
1767.1–1767.9
§ 1767.10 Definitions.
As used in this part:
Accounting borrower is an RUS borrower.
Accounts are the accounts prescribed
in this system of accounts.
Actually issued as applied to securities issued or assumed by the utility,
are those which have been sold to bona
fide purchasers for a valuable consideration, those issued as dividends on
stock, and those which have been
issued in accordance with contractual
requirements direct to trustees of sinking funds.
Actually outstanding as applied to securities issued or assumed by the utility, are those which have been actually
issued and are neither retired nor held
by or for the utility; provided, however, that securities held by trustees
shall be considered as actually outstanding.
Amortization is 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.
Associated (affiliated) companies are
companies or persons that directly, or
indirectly through one or more intermediaries, control, or are controlled
by, or under common control with, the
accounting company.
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.
CFC is the National Rural Utilities
Cooperative Finance Corporation.
Continuing Property Records are company plant records for retirement units
and mass property that provide, as either a single record, or in separate
records readily obtainable by references made in a single record, the
following information:
(1) For each retirement unit:
(i) The name or description of the
unit, or both;
(ii) The location of the unit;
[Reserved]
Subpart B—Uniform System of Accounts
1767.10 Definitions.
1767.11 Purpose.
1767.12 Accounting system requirements.
1767.13 Departures from the prescribed RUS
Uniform System of Accounts.
1767.14 Interpretations of the Rural Development uniform system of accounts.
1767.15 General instructions.
1767.16 Electric plant instructions.
1767.17 Operating expense instructions.
1767.18 Assets and other debits.
1767.19 Liabilities and other credits.
1767.20 Plant accounts.
1767.21 Operating income.
1767.22 Other income and deductions.
1767.23 Interest charges.
1767.24 Extraordinary items.
1767.25 Retained earnings.
1767.26 Operating revenue.
1767.27 Operation and maintenance expenses.
1767.28 Customer accounts expenses.
1767.29 Customer service and informational
expenses.
1767.30 Sales expenses.
1767.31 Administrative and general expenses.
1767.32–1767.40 [Reserved]
1767.41 Accounting methods and procedures
required of all RUS borrowers.
1767.42–1767.45 [Reserved]
Subpart C—Depreciation Rates and
Procedures [Reserved]
1767.46–1767.65
[Reserved]
[Reserved]
Subpart D—Preservation of Records
1767.66 Purpose.
1767.67 General.
1767.68 Designation of a supervisory official.
1767.69 Index of records.
1767.70 Record storage media.
1767.71 Periods of retention.
1767.72–1767.85 [Reserved]
AUTHORITY: 7 U.S.C. 901 et seq., 1921 et seq.,
6941 et seq.
SOURCE: 58 FR 59825, Nov. 10, 1993, unless
otherwise noted.
Subpart A—General [Reserved]
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§ 1767.10
7 CFR Ch. XVII (1–1–12 Edition)
(iii) The date the unit was placed in
service;
(iv) The cost of the unit as set forth
in § 1767.16 (b) and (c); and
(v) The plant control account to
which the cost of the unit is charged.
(2) For each category of mass property:
(i) A general description of the property and quantity;
(ii) The quantity placed in service by
vintage year;
(iii) The average cost as set forth in
§ 1767.16 (b) and (c); and
(iv) The plant control account to
which the costs are charged.
Control (including the terms controlling, controlled by, and under common
control with) is the possession, directly
or indirectly, of the power to direct or
cause the direction of the management
and policies of a company, whether
such power is exercised through one or
more intermediary companies, or
alone, or in conjunction with, or pursuant to an agreement, and whether such
power is established through a majority or minority ownership or through
voting of securities; common directors,
officers, or stockholders; voting trusts;
holding trusts; associated companies;
contracts; or any other direct or indirect means.
Cost is the amount of money actually
paid for property or services. When the
consideration given is other than cash
in a purchase and sale transaction, as
distinguished from a transaction involving the issuance of common stock
in a merger or a pooling of interest, the
value of such consideration shall be determined on a cash basis.
Cost of removal is the cost of demolishing, dismantling, tearing down or
otherwise removing electric plant, including the cost of transportation and
handling incidental thereto. It does not
include the cost of removal activities
associated with asset retirement obligations that are capitalized as part of
the tangible long-lived assets that give
rise to the obligation. (See § 1767.15(y).
Customer is a consumer or patron.
Debt expense includes all expenses incurred in connection with the issuance
and initial sale of evidence of debt,
such as fees for drafting mortgages and
trust deeds; fees and taxes for issuing
or recording evidences of debt; costs of
engraving and printing bonds and certificates of indebtedness; fees paid to
trustees; specific costs of obtaining
governmental authority; fees for legal
services; fees and commissions paid underwriters, brokers, and salesmen for
marketing such evidences of debt; fees
and expenses of listing on exchanges;
and other like costs.
Depreciation, as applied to depreciable electric plant, is the loss in service value, not restored by current
maintenance, incurred in connection
with the consumption or prospective
retirement of electric 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.
Discount, as applied to the securities
issued or assumed by the utility, is the
excess of the par (stated value of nopar stocks) or face value of the securities plus interest or dividends accrued
at the date of the sale over the cash
value of the consideration received
from their sale.
FASB is the Financial Accounting
Standards Board.
Form 7 is the January 2004 revision
(or the revision of any other date
which may be specified) of such Form
7, Financial and Statistical Report, or
any later revision which shall have
been at the time prescribed for use by
Rural Development.
Form 12 is the December 2002 revision
(or the revision of any other date
which may be specified) of such Form
12, Operating Report—Financial, or
any later revision which shall have
been at the time prescribed for use by
Rural Development.
G&T is a generation and transmission
cooperative.
Investment advances are 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.
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Rural Utilities Service, USDA
§ 1767.10
Lease, capital is a lease of property
used in utility or nonutility operations, which meets one or more of the
criteria stated in § 1767.15(s).
Lease, operating is a lease of property
used in utility or nonutility operations, which does not meet any of the
criteria stated in § 1767.15(s).
Minor items of property are the associated parts or items of which retirement
units are composed.
Net salvage value is the salvage value
of property retired less the cost of removal.
Nominally issued, as applied to securities issued or assumed by the utility,
are those which have been signed, certified, or otherwise executed, and
placed with the proper officer for sale
and delivery, or pledged, or otherwise
placed in some special funds of the
utility, but which have not been sold,
or issued direct to trustees of sinking
funds in accordance with contractual
requirements.
Nominally outstanding, as applied to
securities issued or assumed by the
utility, are those which, after being actually issued, have been reacquired by
or for the utility under circumstances
which require them to be considered as
held alive and not retired, provided,
however, that securities held by trustees shall be considered as actually outstanding.
NRECA is the National Rural Electric
Cooperative Association.
Original cost, as applied to electric
plant, is the cost of such property to
the person first devoting it to public
service.
Person is an individual, a corporation, a partnership, an association, a
joint stock company, a business trust,
or any organized group of persons,
whether incorporated or not, or any receiver or trustee.
Premium, as applied to securities
issued or assumed by the utility, is the
excess of the cash value of the consideration received from their sale over
the sum of their par (stated value of
no-par stocks) or face value and interest or dividends accrued at the date of
sale.
Project is a complete unit of improvement or development, consisting of a
power house, all water conduits, all
dams and appurtenant works and
structures (including navigation structures) which are a part of said unit,
and all storage, diverting, or forebay
reservoirs directly connected therewith, the primary line or lines transmitting power therefrom to the point
of junction with the distribution system or with the interconnected primary transmission system, all miscellaneous structures used and useful
in connection with said unit or any
part thereof, and all water rights,
rights of way, ditches, dams, reservoirs, lands, or interest in lands the
use and occupancy of which are necessary or appropriate in the maintenance and operation of such unit.
Property retired, as applied to electric
plant, is property which has been removed, sold, abandoned, destroyed, or
which for any cause has been withdrawn from service.
REA means the Rural Electrification
Administration formerly an agency of
the United States Department of Agriculture and predecessor agency to RUS
with respect to administering certain
electric and telephone loan programs.
Regional Market is an organized energy market operated by a public utility, whether directly or through a contractual relationship with another entity.
Regulatory Assets and Liabilities are
assets and liabilities that result from
rate actions of regulatory agencies.
Regulatory assets and liabilities arise
from specific revenues, expenses, gains,
or losses that would have been included
in net income determinations in one
period under the general requirements
of the Uniform System of Accounts but
for it being probable:
(1) That such items will be included
in a different period(s) for purposes of
developing the rates the utility is authorized to charge for its utility services; or
(2) In the case of regulatory liabilities, that refunds to customers, not
provided for in the other accounts, will
be required.
Replacing (including replacement) when
not otherwise indicated in the context,
is the construction or installation of
electric plant in place of property retired, together with the removal of the
property retired.
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§ 1767.10
7 CFR Ch. XVII (1–1–12 Edition)
Research, Development, and Demonstration (RD&D) includes all expenditures incurred by borrowers either directly or through another person or organization (such as a research institute, industry association, foundation,
university, engineering company or
similar contractor) in pursuing research, development, and demonstration activities including experiment,
design, installation, construction, or
operation. This definition includes expenditures for the implementation or
development of new and/or existing
concepts until technically feasible and
commercially feasible operations are
verified. Such research, development,
and demonstration costs should be reasonably related to the existing or future utility business, broadly defined,
of the borrower or in the environment
in which it operates or expects to operate. The term includes, but is not limited to, all such costs incidental to the
design, development or implementation of an experimental facility, a
plant process, a product, a formula, an
invention, a system or similar items,
and the improvement of already existing items of a like nature; amounts expended in connection with the proposed
development and/or proposed delivery
of alternate sources of electricity; and
the costs of obtaining its own patent,
such as attorney’s fees expended in
making and perfecting a patent application. The term includes preliminary
investigations and detailed planning of
specific projects for securing for customers
non-conventional
electric
power supplies that rely on technology
that has not been verified previously to
be feasible. The term does not include
expenditures for efficiency surveys;
studies of management, management
techniques, and organization; or consumer
surveys,
advertising,
promotions, or items of a like nature.
Retirement units are those items of
electric plant which, when retired with
or without replacement, are accounted
for by crediting the book cost thereof
to the electric plant accounts in which
included.
RUS means the Rural Utilities Service, an agency of the United States Department of Agriculture established
pursuant to Section 232 of the Federal
Crop Insurance Reform and Depart-
ment of Agriculture Reorganization
Act of 1994 (Pub. L. 103–354, 108 Stat.
3178), successor to REA with respect to
administering certain electric and telephone programs. See 7 CFR 1700.1.
RUS Form 7 is the August 1988 revision (or the revision of any other date
which may be specified) of such RUS
Form 7, Financial and Statistical Report, or any later revision which shall
have been at the time prescribed for
use by RUS.
RUS Form 12 is the November 1979 revision (or the revision of any other
date which may be specified) of such
RUS Form 12, Operating Report—Financial, or any later revision which
shall have been at the time prescribed
for use by RUS.
RUS USoA is the USoA prescribed in
this subpart.
Salvage value is 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 recovered is chargeable to materials and supplies, or other appropriate
accounts.
Service life is the time between the
date electric plant is includible in electric plant in service, or electric 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, service life should be
measured in terms of the appropriate
unit of production.
Service value is the difference between
original cost and net salvage value of
electric plant.
State is a State admitted to the
Union, the District of Columbia, and
any organized Territory of the United
States.
Subsidiary company is a company
which is controlled by the utility
through ownership of voting stock.
(See the definition of control in
§ 1767.10.) A corporate joint venture in
which a corporation is owned by a
small group of businesses as a separate
and specific business or project for the
mutual benefit of the members of the
group is a subsidiary company for the
purposes of this system of accounts.
Utility is an RUS borrower.
Work order is an order authorizing
the construction of utility plant. It
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Rural Utilities Service, USDA
§ 1767.13
(b) RUS borrowers subject to the jurisdiction of a state regulatory authority with jurisdiction over rates and/or
accounting for electric utilities will
not:
(1) Request approval of such authority to use accounting methodologies
and principles that depart from the
provisions herein; or
(2) File with such authority, any documents or information, including without limitation, any filings associated
with the borrower’s rates, based upon
accounting methods and principles inconsistent with the provisions of this
part.
(c) If any state regulatory authority
with jurisdiction over an RUS borrower
prescribes accounting methods or principles for the borrower that are inconsistent with the provisions of this part,
the borrower must immediately notify
the Director, BAD, and provide such
documents, information, and reports as
RUS may request to evaluate the impact that such accounting methods or
principles may have on the interests of
RUS.
(1) If RUS determines that the accounting methods and principles do not
adversely impact RUS interests, RUS
will permit the borrower to use the accounting methods and principles as
prescribed by the state regulatory authority to comply with the provisions
of the RUS loan documents.
(2) If RUS determines that the accounting methods and principles may
adversely impact RUS’s interests, RUS
may require that, for the purposes of
complying with provisions of RUS loan
documents, including, without limitation, those provisions relating to financial coverage standards (e.g. ‘‘TIER’’),
the borrower continue to maintain
books, records, and accounts in accordance with this subpart.
(i) RUS may, however, approve requests by the borrower to maintain
such additional books, records, and accounts as necessary to comply with the
requirements of the state regulatory
authority.
(ii) Such approval will not waive,
modify or amend the requirements of
the RUS loan documents or of this subpart.
(d) RUS borrowers will not implement the provisions of Statement of
serves as the basis for the accounts or
subaccounts in which costs are recorded.
[58 FR 59825, Nov. 10, 1993, as amended at 59
FR 66440, Dec. 27, 1994; 73 FR 30279, May 27,
2008]
§ 1767.11
Purpose.
(a) The standard form of RUS loan
documents for electric borrowers requires that the borrower keep books,
records, and accounts in which full and
true entries will be made of all of the
dealings, business and affairs of the
borrower in accordance with the methods and principles of accounting of this
part.
(b) This subpart implements these
provisions of the RUS loan documents
by prescribing the RUS USoA for electric borrowers and by providing accounting methodologies and procedures
which are applicable to particular situations.
§ 1767.12 Accounting system requirements.
(a) Each Rural Development electric
borrower must maintain and keep its
books of accounts and all other books
and records that support the entries in
such books of accounts in accordance
with §§ 1767.13–1767.31.
(b) Each RUS electric borrower shall
maintain and keep its books of accounts and all other books and records
which support the entries in such
books of accounts in accordance with
§ 1767.41, Accounting Methods and Procedures Required of All RUS Borrowers, herein, which prescribes accounting principles to be applied to
specific factual circumstances.
[58 FR 59825, Nov. 10, 1993, as amended at 73
FR 30280, May 27, 2008]
§ 1767.13 Departures from the prescribed RUS Uniform System of Accounts.
(a) No departures are to be made to
the prescribed Rural Development
USoA without the prior written approval of Rural Development. Requests
for departures from the Rural Development USoA shall be addressed, in writing, to the Assistant Administrator,
Program Accounting and Regulatory
Analysis. (AA–PARA).
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§ 1767.14
7 CFR Ch. XVII (1–1–12 Edition)
Financial
Accounting
Standards
(SFAS) No. 71, Accounting for the Effects of Certain Types of Regulation,
SFAS No. 90, Regulated Enterprises—
Accounting for Abandonments and Disallowances of Plant Costs, SFAS No.
92, Regulated Enterprises—Accounting
for Phase-in Plans, without the prior
written approval of RUS except as provided for in paragraphs (d)(1) through
(d)(5) of this section. Requests for approval shall be addressed, in writing, to
the Director, PASD. The specific deferrals set forth in paragraphs (d)(1)
through (d)(5) of this section may be
implemented without the prior written
approval of RUS provided that the deferrals comply with Statement No. 71
and that the RUS borrowers implementing such deferrals continue to
meet the requirements set forth in
Statement No. 71 for doing so:
(1) The deferral and amortization of
prior service pension costs (See
§ 1767.41, Interpretation No. 606, Pension Costs), remapping expenses (See
§ 1767.41, Interpretation No. 613, Mapping Costs), and preliminary survey
and investigation charges (See § 1767.17,
Interpretation No. 111, Engineering
Contracts for System Planning);
(2) The deferral of any current period
expense or expenses, on a cumulative
basis for the fiscal year, only if a borrower would have met each of its financial tests or coverage ratios that it has
covenanted with RUS to meet for that
fiscal year, had the deferral not been
made;
(3) The deferral of any cost that will
be fully amortized within the next 12
succeeding months;
(4) The accelerated amortization of
any previously deferred expense; and
(5) The deferral of revenues coincident with a moratorium imposed by
the National Rural Electric Cooperative Association on its Retirement and
Security Program, provided, however,
that the deferral is for the sole purpose
of offsetting future pension costs.
(e) RUS will consider approval of specific departures from this part upon
submission of:
(1) A detailed description of the proposed departure;
(2) The specific accounting journal
entries that will be used including the
account number and title, and the dollar amounts where appropriate;
(3) The total dollar amount of the departure and the impact on margins
during the time period of the departure; and
(4) A resolution from the borrower’s
Board of Directors authorizing such action; and
(5) Any additional information RUS
may deem necessary to adequately
evaluate the borrower’s request.
(f) RUS will, within 90 days of final
receipt of this information, render a
decision on the borrower’s request for a
departure from the prescribed RUS
USoA.
(1) If, due to extenuating circumstances, RUS is unable to reach a
decision within the required time period, RUS will notify the borrower of
the delay within this same 90-day period, and provide a projected decision
date.
(2) The requested departure from the
prescribed RUS USoA must not be implemented until final approval is
granted by RUS.
[58 FR 59825, Nov. 10, 1993, as amended at 60
FR 55429, Nov. 1, 1995; 62 FR 42289, Aug. 6,
1997; 73 FR 30280, May 27, 2008]
§ 1767.14 Interpretations of the Rural
Development uniform system of accounts.
To maintain uniformity in accounting, borrowers must submit questions
concerning interpretations of the Rural
Development USoA, in writing, to the
AA–PARA, for consideration and decision.
(Approved by the Office of Management and
Budget under control number 0572–0002)
[73 FR 30280, May 27, 2008]
§ 1767.15 General instructions.
(a) Records. (1) 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.
(2) Each entry shall be supported by
such detailed information as will permit ready identification, analysis, and
verification of all facts relevant thereto.
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Rural Utilities Service, USDA
§ 1767.15
(3) The books and records referred to
herein include not only accounting
records in a limited technical sense,
but all other records, such as minute
books, stock books, reports, correspondence, memoranda, etc., which
may be useful in developing the history
of or facts regarding any transaction.
(4) No utility shall destroy any such
books or records unless the destruction
thereof is permitted by the rules and
regulations contained in subpart D of
this part.
(5) In addition to the prescribed accounts, clearing accounts, temporary
or experimental accounts, and subdivisions of any accounts, may be kept,
provided the integrity of the prescribed
accounts is not impaired.
(6) When the utility chooses to recognize the gain in the year of reacquisition as a taxable gain, Account 411.1,
Provision for Deferred Income Taxes—
Credit, Utility Operating Income, shall
be credited with the amount of the related tax effect, such amount to be allocated to the periods affected in accordance with the provisions of Account 190, Accumulated Deferred Income Taxes.
(7) The arrangement or sequence of
the accounts prescribed herein shall
not be controlling as to the arrangement or sequence in report forms
which may be prescribed by RUS.
(b) Numbering system. (1) The account
numbering plan used herein consists of
a system of three-digit whole numbers
as follows:
(i) Each utility, however, may adopt,
for its own purposes, a different system
of account numbers provided that the
numbers herein prescribed shall appear
in the descriptive headings of the ledger accounts and in the various sources
of original entry.
(ii) If a utility uses a different group
of account numbers and it is not practicable to show the prescribed account
numbers in the various sources of
original entry, such reference to the
prescribed account numbers may be
omitted from the various sources of
original entry.
(iii) Each utility using different account numbers for its own purposes
shall keep readily available, a list of
such account numbers which it uses
and a reconciliation of such account
numbers with the account numbers
provided herein.
(iv) The utility’s records shall be so
kept as to permit ready analysis by
prescribed accounts (by direct reference to sources of original entry to
the extent practicable) and to permit
preparation of financial and operating
statements directly from such records
at the end of each accounting period
according to the prescribed accounts.
(c) Accounting period. (1) Each utility
shall keep its books on a monthly basis
so that for each month, all transactions applicable thereto, as nearly as
may be ascertained, shall be entered in
the books of the utility.
(2) Amounts applicable or assignable
to specific utility departments shall be
so segregated monthly.
(3) Each utility shall close its books
at the end of each fiscal year unless
otherwise authorized by RUS.
(d) Submission of questions. To maintain uniformity of accounting, utilities
shall submit questions of doubtful interpretation to RUS for consideration
and decision.
(e) Item lists. (1) Lists of ‘‘items’’ appearing in the texts of the accounts or
elsewhere herein are for the purpose of
more clearly indicating the application
of the prescribed accounting.
(2) The lists are intended to be representative, but not exhaustive.
(3) 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
100–199 Assets and other debits.
200–299 Liabilities and other credits.
300–399 Plant accounts.
400–432, 434–435 Income accounts.
433, 436–439 Retained earnings accounts.
440–459 Revenue accounts.
500–599 Production, transmission, and distribution expenses.
900–949 Customer accounts, customer service and informational, sales, and general
and administrative expenses.
(2) In certain instances, numbers
have been skipped in order to allow for
possible later expansion or to permit
better coordination with the numbering system for other utility departments.
(3) The numbers prefixed to account
titles are to be considered as parts of
the titles.
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§ 1767.15
7 CFR Ch. XVII (1–1–12 Edition)
(h) Unaudited items. (1) Whenever a financial statement is required by RUS,
if it is known that a transaction has
occurred which affects the accounts
but the amount involved in the transaction and its effect upon the accounts
cannot be determined with absolute accuracy, the amount shall be estimated
and such estimated amount included in
the proper accounts.
(2) The utility is not required to anticipate minor items which would not
appreciably affect the accounts.
(i) Distribution of pay and expenses of
employees. Charges to electric plant, operating expense, 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.
(j) Payroll distribution. (1) Underlying
accounting data shall be maintained so
that the distribution of the cost of
labor charged direct to the various accounts will be readily available.
(2) Such underlying data shall permit
a reasonably accurate distribution to
be made of the cost of labor charged
initially to clearing accounts so that
the total labor cost may be classified
among construction, cost of removal,
electric operating functions (steam
generation, nuclear generation, hydraulic generation, transmission, distribution, etc.) and nonutility operations.
(k) Accounting on an accrual basis. (1)
The utility is required to keep its accounts on the accrual basis.
(i) This requires the inclusion, in its
accounts, of all known transactions of
appreciable amount which affect the
accounts.
(ii) 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.
(2) When payments are made in advance for items such as insurance,
rents, taxes, or interest, the amount
applicable to future periods shall be
charged to Account 165, Prepayments,
inclusion inasmuch as the same item
frequently appears in more than one
list.
(4) The proper entry in each instance
must be determined by the texts of the
accounts.
(f) Extraordinary items. (1) Net income
shall reflect all items of profit and loss
during the period with the exception of
prior period adjustments as described
in § 1767.15 (g) and long-term debt as described in § 1767.15 (q).
(2) 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.
(3) 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.
(i) In determining significance, items
of a similar nature should be considered in the aggregate.
(ii) Dissimilar items should be considered individually; however, if they
are few in number, they may be considered in the aggregate.
(iii) To be considered as extraordinary under the above guidelines, an
item should be more than approximately 5 percent of income, computed
before extraordinary items.
(iv) RUS approval must be obtained
to treat an item of less than 5 percent,
as extraordinary. (See Accounts 434
and 435.)
(g) Prior period items. (1) Items of profit and loss related to the following
shall be accounted for as prior period
adjustments and excluded from the determination of net income for the current year:
(i) Correction of an error in the financial statements of a prior year
(ii) Adjustments that result from realization of income tax benefits of
preacquisition
operating
loss
carryforwards of purchased subsidiaries.
(2) All other items of profit and loss
recognized during the year shall be included in the determination of net income for that year.
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Rural Utilities Service, USDA
§ 1767.15
and spread over the periods to which
applicable, by credits to Account 165,
and charges to the accounts appropriate for the expenditure.
(l) Records for each plant. (1) Separate
records shall be maintained by electric
plant accounts of the book cost of each
plant owned, including additions by the
utility to plant leased from others, and
of the cost of operating and maintaining each plant owned or operated.
(2) The term ‘‘plant’’ as used herein
includes each generating station and
each transmission line or appropriate
group of transmission lines.
(m) Accounting for other departments.
(1) If the utility also operates other
utility departments, such as gas or
water, 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 such department.
(2) It is not intended that proprietary
and similar accounts which apply to
the utility as a whole shall be departmentalized.
(n) Transactions with associated companies. (1) Each utility shall keep its accounts and records so as to be able to
furnish accurately and expeditiously
statements of all transactions with associated companies.
(2) The statements may be required
to show the general nature of the
transactions, the amounts involved
therein and the amounts included in
each account prescribed herein with respect to such transactions. Transactions with associated companies
shall be recorded in the appropriate accounts for transactions of the same nature. Nothing herein contained, however, shall be construed as restraining
the utility from subdividing accounts
for the purpose of recording separately
transactions with associated companies.
(o) Contingent assets and liabilities. (1)
Contingent assets represent a possible
source of value to the utility contingent upon the fulfillment of conditions
regarded as uncertain.
(2) Contingent liabilities include
items which may, under certain conditions, become obligations of the utility
but which are neither direct nor as-
sumed liabilities at the date of the balance sheet. The utility shall be prepared to give a complete statement of
significant contingent assets and liabilities (including cumulative dividends on preference stock) in its audited financial statements; its RUS
Form 7, Financial and Statistical Report, or its RUS Form 12, Operating
Report—Financial; and at such other
times as may be requested by RUS.
(p) Separate accounts or records for
each licensed project. The accounts or
records of each borrower shall be so
kept as to show for each project (including pumped storage) under license:
(1) The actual legitimate original
cost of the project, including the original cost of the original project, the
original cost of additions thereto and
betterments thereof, and credits for
property retired from service, as determined under RUS’s regulations in 7
CFR chapter XVII;
(2) The charges for operation and
maintenance of the project property directly assignable to the project;
(3) The credits and debits to the depreciation and amortization accounts,
and the balances in such accounts; and
(4) The credits and debits to the operating revenue, income, and retained
earnings accounts that can be identified with and directly assigned to the
project.
NOTE: The purpose of this instruction is to
insure that accounts or records are currently
maintained by each borrower from which reports may be made to RUS for use in determining the net investment in each licensed
project. The instruction covers only the
debit and credit items appearing in the borrower’s accounts which may be identified
with and assigned directly to any project. In
the determination of the net investment, allocations of items affecting the net investment may be required where direct assignment is not practicable.
(q) Long-term debt: premium, discount
and expense, and gain or loss on reacquisition—(1) Premium, discount and expense. (i) A separate premium, discount
and expense account shall be maintained for each class and series of longterm debt (including receivers’ certificates) issued or assumed by the utility.
(ii) The premium will be recorded in
Account 225, Unamortized Premium on
Long-Term Debt, the discount will be
recorded in Account 226, Unamortized
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§ 1767.15
7 CFR Ch. XVII (1–1–12 Edition)
Discount on Long-Term Debt—Debit,
and the expense of issuance shall be recorded in Account 181, Unamortized
Debt Expense.
(iii) The premium, 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.
(A) The amortization shall be
charged or credited on a monthly basis
with the amounts relating to discount
and expense charged to Account 428,
Amortization of Debt Discount and Expense.
(B) The amounts relating to premium
shall be credited to Account 429, Amortization of Premium on Debt—Credit.
(2) Reacquisition, without refunding. (i)
When long-term debt is reacquired or
redeemed without being converted into
another form of long-term debt and
when the transaction is not in connection with a refunding operation (primarily redemptions for sinking fund
purposes), the difference between the
amount paid upon reacquisition and
the face value; plus any unamortized
premium less any related unamortized
debt expense and reacquisition costs;
or less any unamortized discount, related debt expense and reacquisition
costs applicable to the debt redeemed,
retired and cancelled, shall be included
in Account 189, Unamortized Loss on
Reacquired Debt, or Account 257,
Unamortized Gain on Reacquired Debt,
as appropriate.
(ii) The utility shall amortize the recorded amounts equally on a monthly
basis over the remaining life of the respective security issues (old original
debt).
(iii) The amount so amortized shall
be charged to Account 428.1, Amortization of Loss on Reacquired Debt, or
credited to Account 429.1, Amortization
of Gain on Reacquired Debt—Credit, as
appropriate.
(3) Reacquisition, with refunding. (i)
When the redemption of one issue or
series of bonds or other long-term obligations is financed by another issue or
series before the maturity date of the
first issue, the difference between the
amount paid upon refunding and the
face value; plus any unamortized premium less related debt expense or less
any unamortized discount and related
debt expense, applicable to the debt refunded, shall be included in Account
189, Unamortized Loss on Reacquired
Debt, or Account 257, Unamortized
Gain on Reacquired Debt, as appropriate.
(ii) The utility may elect to account
for such amounts as follows:
(A) Write them off immediately when
the amounts are insignificant;
(B) Amortize them by equal monthly
amounts over the remainder of the
original life of the issue retired; or
(C) Amortize them by equal monthly
amounts over the life of the new issue.
(iii) Once an election is made, it shall
be applied on a consistent basis.
(iv) The amounts in paragraphs
(q)(3)(ii)(A), (B), or (C) of this section
shall be charged to Account 428.1, Amortization of Loss on Reacquired Debt,
or credited to Account 429.1, Amortization of Gain on Reacquired Debt—Credit, as appropriate.
(4) Under methods in paragraphs
(q)(3)(ii)(B) and (C) of this section, the
increase or reduction in current income taxes resulting from the reacquisition should be apportioned over the
remainder of the original life of the
issued retired or over the life of the
new issue, as appropriate, as directed
more specifically in paragraphs (q)(5)
and (6) of this section.
(5) When the utility recognizes the
loss in the year of reacquisition as a
tax deduction, Account 410.1, Provision
for Deferred Income Taxes, Utility Operating Income, shall be debited and
Account 283, Accumulated Deferred Income Taxes—Other, shall be credited
with the amount of the related tax effect, such amount to be allocated to
the periods affected in accordance with
the provisions of Account 283.
(6) When the utility chooses to recognize the gain in the year of reacquisition as a taxable gain, Account 411.1,
Provision for Deferred Income Taxes—
Credit, Utility Operating Income, shall
be debited with the amount of the related tax effect, such amount to be allocated to the periods affected in accordance with the provisions of Account 190, Accumulated Deferred Income Taxes.
(7) When the utility chooses to use
the optional privilege of deferring the
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Rural Utilities Service, USDA
§ 1767.15
tax on the gain attributable to the reacquisition of debt by reducing the depreciable basis of utility property for
tax purposes, pursuant to Section 108
of the Internal Revenue Code (26 U.S.C.
108), the related tax effects shall be deferred as the income is recognized for
accounting purposes, and the deferred
amounts shall be amortized over the
life of the associated property on a vintage year basis.
(i) Account 410.1, Provision for Deferred Income Taxes, Utility Operating
Income, shall be debited, and Account
282, Accumulated Deferred Income
Taxes—Other Property, shall be credited with an amount equal to the estimated income tax effect applicable to
the portion of the income, attributable
to reacquired debt, recognized for accounting purposes during the period.
(ii) Account 282 shall be debited and
Account 411.1, Provision for Deferred
Income Taxes—Credit, Utility Operating Income, shall be credited with an
amount equal to the estimated income
tax effects, during the life of the property, attributable to the reduction in
the depreciable basis for tax purposes.
(8) The tax effects relating to gain or
loss shall be allocated as above to utility operations except in cases where a
portion of the debt reacquired is directly applicable to nonutility operations.
(i) In that event, the related portion
of the tax effects shall be allocated to
nonutility operations.
(ii) Where it can be established that
reacquired debt is generally applicable
to both utility and nonutility operations, the tax effects shall be allocated between utility and nonutility
operations based on the ratio of net investment in utility plant to net investment in nonutility plant.
(9) Premium, discount, or expense on
debt shall not be included as an element in the cost of construction or acquisition of property (tangible or intangible), except under the provisions
of Account 432, Allowance for Borrowed
Funds Used During Construction—
Credit.
(10) Alternate method. Where a regulatory authority or a group of regulatory authorities having prime rate
jurisdiction over the utility specifically disallows the rate principle of
amortizing gains or losses on reacquisition of long-term debt without refunding, and does not apply the gain or loss
to reduce interest charges in computing the allowed rate of return for
rate purposes, the following alternate
method may be used to account for
gains or losses relating to reacquisition
of long-term debt, with or without refunding:
(i) The difference between the
amount paid upon reacquisition of any
long-term debt and the face value, adjusted for unamortized discount, expenses or premium, as the case may be,
applicable to the debt redeemed shall
be recognized currently in income and
recorded in Account 421, Miscellaneous
Nonoperating Income, or Account 426.5,
Other Deductions.
(ii) When this alternate method of accounting is used, the utility shall include a footnote to each financial
statement, prepared for public use, explaining why this method is being used
along with the treatment given for
ratemaking purposes.
(r) Comprehensive interperiod income
tax allocation. (1) Where there are timing differences between the periods in
which transactions affect taxable income and the periods in which they
enter into the determination of pretax
accounting income, the income tax effects of such transactions are to be recognized in the periods in which the differences between book accounting income and taxable income arise and in
the periods in which the differences reverse using the deferred tax method.
(2) Comprehensive interperiod tax allocation should be followed whenever
transactions enter into the determination of pretax accounting income for
the period even though some transactions may affect the determination
of taxes payable in a different period.
(3) Utilities are not required to utilize comprehensive interperiod income
tax allocation until the deferred income taxes are included as an expense
in the rate level by the regulatory authority having rate jurisdiction over
the utility.
(4) Where comprehensive interperiod
tax allocation accounting is not practiced the utility shall include as a note
to each financial statement, prepared
for public use, a footnote explanation
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§ 1767.15
7 CFR Ch. XVII (1–1–12 Edition)
setting forth the utility’s accounting
policies with respect to interperiod tax
allocation and describing the treatment for rate making purposes of the
tax timing differences by regulatory
authorities having rate jurisdiction.
(5) Should the utility be subject to
more than one agency having rate jurisdiction, its accounts shall appropriately reflect the ratemaking treatment (deferral or flow through) of each
jurisdiction.
(6) Once comprehensive interperiod
tax allocation has been initiated either
in whole or in part it shall be practiced
on a consistent basis and shall not be
changed or discontinued without prior
RUS approval.
(7) Tax effects deferred currently will
be recorded as deferred debits or deferred credits in Accounts 190, Accumulated Deferred Income Taxes; 281, Accumulated Deferred Income Taxes—Accelerated Amortization Property; 282,
Accumulated Deferred Income Taxes—
Other Property, and 283, Accumulated
Deferred Taxes—Other, as appropriate.
(8) The resulting amounts recorded in
these accounts shall be disposed of as
prescribed in this system of accounts
or as otherwise authorized by RUS.
(s) Criteria for classifying leases. (1) If,
at its inception, a lease meets one or
more of the following criteria, the
lease shall be classified as a capital
lease:
(i) The lease transfers ownership of
the property to the lessee by the end of
the lease term.
(ii) The lease contains a bargain purchase option.
(iii) The lease term is equal to 75 percent or more of the estimated economic life of the leased property. However, if the beginning of the lease term
falls within the last 25 percent of the
total estimated economic life of the
leased property, including earlier years
of use, this criterion shall not be used
for purposes of classifying the lease.
(iv) The present value at the beginning of the lease term of the minimum
lease payments, excluding that portion
of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, including any profit thereon,
equals or exceed 90 percent of the excess of the fair value of the leased prop-
erty to the lessor at the inception of
the lease over any related investment
tax credit retained by the lessor and
expected to be realized by lessor.
(A) However, if the beginning of the
lease term falls within the last 25 percent of the total estimated economic
life of the leased property, including
earlier years of use, this criterion shall
not be used for purposes of classifying
the lease.
(B) The lessee utility shall compute
the present value of the minimum
lease payments using its incremental
borrowing rate, unless it is practicable
for the utility to learn the implicit
rate computed by the lessor, and the
implicit rate computed by the lessor is
less than the lessee’s incremental borrowing rate. If both of those conditions
are met, the lessee shall use the implicit rate.
(2) If, at any time, the lessee and lessor agree to change the provisions of
the lease, other than by renewing the
lease or extending its term, in a manner that would have resulted in a different classification of the lease under
the criteria in paragraph (s)(1) of this
section had the changed terms been in
effect at the inception of the lease, the
revised agreement shall be considered
as a new agreement over its term, and
the criteria in paragraph (s)(1) of this
section shall be applied for purposes of
the expiration of the existing lease
term, such as the exercise of a lease renewal option other than those already
included in the lease term, shall be
considered as a new agreement and
shall be classified according to the
above provision. Changes in estimates
(for example, changes in estimates of
the economic life or of the residual
value of the leased property) or
changes in circumstances (for example,
default by the lessee) shall not give
rise to a new classification of a lease
for accounting purposes.
(t) Accounting for leases. (1) All leases
shall be classified as either capital or
operating leases.
(2) The utility shall record a capital
lease as an asset in Account 101.1,
Property Under Capital Leases, Account 120.6, Nuclear Fuel Under Capital
Leases or Account 121, Nonutility
Property;
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Rural Utilities Service, USDA
§ 1767.15
(3) The utility, as a lessee, shall recognize an asset retirement obligation
arising from the plant under a capital
lease unless the obligation is recorded
as an asset and liability under a capital
lease. The utility shall record the asset
retirement cost by debiting Account
101.1, Property Under Capital Leases,
or Account 120.6, Nuclear Fuel Under
Capital Leases, or Account 121, Nonutility Property, as appropriate, and
crediting the liability for the asset retirement obligation in Account 230,
Asset Retirement Obligations. Asset
retirement costs recorded in Account
101.1, Account 120.6, or Account 121
shall be amortized by charging rent expense, or Account 518, Nuclear Fuel Expense, or Account 421, Miscellaneous
Nonoperating Income, as appropriate,
and crediting a separate subaccount of
the account in which the asset retirement costs are recorded. Charges for
the periodic accretion of the liability
in Account 230, Asset Retirement Obligations, shall be recorded by a charge
to Account 411.10, Accretion Expense,
for electric utility plant, and Account
421, Miscellaneous Nonoperating Income, for nonutility plant and a credit
to Account 230, Asset Retirement Obligations.
(4) Rental payments on all leases
shall be charged to rent expense, fuel
expense, construction work in progress,
or other appropriate accounts as they
become payable.
(5) For a capital lease, for each period
during the lease term, the amounts recorded for the asset and obligation
shall be reduced by an amount equal to
the portion of each lease payment that
would have been allocated to the reduction of the obligation, if the payment
had been treated as a payment on an
installment obligation (liability) and
allocated between interest expense and
a reduction of the obligation so as to
produce a constant periodic rate of interest on the remaining balance.
(u) Allowances. (1) Title IV of the
Clean Air Act Amendments of 1990,
Pub. L. 101–549, 104 Stat. 2399, 2584 (42
U.S.C. 7407 and 42 U.S.C. 7651), provides
for the issuance of allowances as a
means to limit the emissions of certain
airborne pollutants by various entities,
including utilities. Utilities owning allowances, other than those acquired for
speculative purposes, shall account for
such allowances at cost in Account
158.1, Allowance Inventory, or Account
158.2, Allowances Withheld, as appropriate. Allowances acquired for speculative purposes and identified as such
in contemporaneous records at the
time of purchase shall be accounted for
in Account 124, Other Investments.
(2) When purchased, allowances become eligible for use in different years,
and the allocation of the purchase cost
cannot be determined by fair value, the
purchase cost allocated to allowances
of each vintage shall be determined
through use of a present-value based
measurement. The interest rate used in
the present-value measurement shall
be the utility’s incremental borrowing
rate, in the month in which the allowances are acquired, for a loan with a
term similar to the period that it will
hold the allowances and in an amount
equal to the purchase price.
(3) The underlying records supporting
Account 158.1 and Account 158.2 shall
be maintained in sufficient detail so as
to provide the number of allowances
and the related cost by vintage year.
(4) Issuances from inventory included
in Account 158.1 and Account 158.2 shall
be accounted for on a vintage basis
using a monthly weighted-average
method of cost determination. The cost
of eligible allowances not used in the
current year shall be transferred to the
vintage for the immediately following
year.
(5) Account 158.1 shall be credited and
Account 509, Allowances, debited so
that the cost of the allowances to be
remitted for the year is charged to expense monthly based on each month’s
emissions. This may, in certain circumstances, require allocation of the
cost of an allowance between months
on a fractional basis.
(6) In any period in which actual
emissions exceed the amount allowable
based on eligible allowances owned, the
utility shall estimate the cost to acquire the additional allowances needed
and charge Account 158.1 with the estimated cost. This estimated cost of future allowance acquisitions shall be
credited to Account 158.1 and charged
to Account 509 in the same accounting
period as the related charge to Account
158.1. Should the actual cost of these
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§ 1767.15
7 CFR Ch. XVII (1–1–12 Edition)
allowances differ from the estimated
cost, the differences shall be recognized
in the then-current period’s inventory
issuance cost.
(7) Any penalties assessed by the Environmental Protection Agency for the
emission of excess pollutants shall be
charged to Account 426.3, Penalties.
(8) Gains on dispositions of allowances, other than allowances held for
speculative purposes, shall be accounted for as follows. First, if there is
uncertainty as to the regulatory treatment, the gain shall be deferred in Account 254, Other Regulatory Liabilities, pending resolution of the uncertainty. Second, if there is certainty as
to the existence of a regulatory liability, the gain will be credited to Account 254, with subsequent recognition
in income when reductions in charges
to customers occur or the liability is
otherwise satisfied. Third, all other
gains will be credited to Account 411.8,
Gains from Disposition of Allowances.
Losses on disposition of allowances,
other than allowances held for speculative purposes, shall be accounted for as
follows. Losses that qualify as regulatory assets shall be charged directly
to Account 182.3, Other Regulatory Assets. All other losses shall be charged
to Account 411.9, Losses from Disposition of Allowances. (See the definition
of regulatory assets and liabilities.)
Gains or losses on disposition of allowances held for speculative purposes
shall be recognized in Account 421, Miscellaneous Nonoperating Income, or
Account 426.5, Other Deductions, as appropriate.
(9) The costs and benefits of exchange-traded allowance futures contracts used to protect the utility from
the risk of unfavorable price changes
(‘‘hedging transactions’’) shall be deferred in Account 186, Miscellaneous
Deferred Debits, or Account 253, Other
Deferred Credits, as appropriate. Such
deferred amounts shall be included in
Account 158.1, Allowance Inventory, in
the month in which the related allowances are acquired, sold or otherwise
disposed of. Where the costs or benefits
of hedging transactions are not identifiable with specific allowances, the
amounts shall be included in Account
158.1 when the futures contract is
closed. The costs and benefits of ex-
change-traded allowance futures contracts entered into as a speculating activity shall be charged or credited to
Account 421, Miscellaneous Nonoperating Income, or Account 426.5, Other
Deductions, as appropriate.
(v) Depreciation accounting—(1) Method. Utilities must use a method of depreciation that allocates in a systematic and rational manner the service
value of depreciable property over the
service life of the property.
(2) Service lives. Estimated useful
service lives of depreciable property
must be supported by engineering, economic, and other depreciation studies.
(3) Rate. Utilities must use percentage rates of depreciation that are based
on a method of depreciation that allocates in a systematic and rational
manner the service value of depreciable
property to the service life of the property. Where composite depreciation
rates are used, they should be based on
the weighted average estimated useful
service lives of the depreciable property comprising the composite group.
(w) Accounting for other comprehensive
income. (1) Utilities shall record items
of other comprehensive income in Account 209, Accumulated Other Comprehensive Income. Amounts included
in this account shall be maintained by
each category of other comprehensive
income. Examples of categories of
other comprehensive income include
foreign currency items, minimum pension liability adjustments, unrealized
gains and losses on available-for-sale
type securities and cash flow hedge
amounts. Supporting records shall be
maintained for Account 209 so that the
cumulative amount of other comprehensive income for each item included in this account can be readily
identified.
(2) When an item of other comprehensive income enters into the determination of net income in the current or
subsequent periods, a reclassification
adjustment shall be recorded in Account 209 to avoid double counting of
that amount.
(3) When it is probable that an item
of other comprehensive income will be
included in the development of cost-ofservice rates in subsequent periods,
that amount of unrealized losses or
gains will be recorded in Accounts
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Rural Utilities Service, USDA
§ 1767.15
182.3, Other Regulatory Assets or 254,
Other Regulatory Liabilities, as appropriate.
(x) Accounting for derivative instruments and hedging activities. (1) Utilities
shall recognize derivative instruments
as either assets or liabilities in the financial statements and measure those
instruments at fair value, except those
falling within recognized exceptions.
Normal purchases or sales are contracts that provide for the purchase or
sale of goods that will be delivered in
quantities expected to be used or sold
by the utility over a reasonable period
in the normal course of business. A derivative instrument is a financial instrument or other contract with all of
the following characteristics:
(i) It has one or more underlyings
and a notional amount or payment provision. Those terms determine the
amount of the settlement or settlements, and, in some cases, whether or
not a settlement is required.
(ii) It requires no initial net investment or an initial net investment that
is smaller than would be required for
other types of contracts that would be
expected to have a similar response to
changes in market factors.
(iii) Its terms require or permit net
settlement, can readily be settled net
by a means outside the contract, or
provide for delivery of an asset that
puts the recipient in a position not
substantially different from net settlement.
(2) The accounting for the changes in
the fair value of derivative instruments
depends upon its intended use and designation. Changes in the fair value of
derivative instruments not designated
as fair value or cash flow hedges shall
be recorded in Account 175, Derivative
instrument assets, or Account 244, Derivative Instrument Liabilities, as appropriate, with the gains recorded in
Account 421, Miscellaneous Nonoperating Income, and losses recorded in
Account 426.5, Other Deductions.
(3) A derivative instrument may be
specifically designated as a fair value
or cash flow hedge. A hedge is used to
manage risk to price, interest rates, or
foreign currency transactions. A company shall maintain documentation of
the hedge relationship at the inception
of the hedge that details the risk man-
agement objective and strategy for undertaking the hedge, the nature of the
risk being hedged, and how hedge effectiveness will be determined.
(4) If the utility designates the derivative instrument as a fair value hedge
against exposure to changes in the fair
value of a recognized asset, liability, or
a firm commitment, it shall record the
change in fair value of the derivative
instrument to Account 176, Derivatives
in Instrument Assets—Hedges, or Account 245, Derivative Instrument Liabilities—Hedges, as appropriate, with
a corresponding adjustment to the subaccount of the item being hedged. The
ineffective portion of the hedge transaction shall be reflected in the same
income or expense account that will be
used when the hedged item enters into
the determination of net income. In
the case of a fair value hedge of a firm
commitment a new asset or liability is
created. As a result of the hedge relationship, the new asset or liability will
become part of the carrying amount of
the item being hedged.
(5) If the utility designates the derivative instrument as a cash flow hedge
against exposure to variable cash flows
of a probable forecasted transaction, it
shall record changes in the fair value of
the derivative instrument in Account
176, Derivative Instrument Assets—
Hedges, or Account 245, Derivative Instrument Liabilities—Hedges, as appropriate, with a corresponding amount in
Account 209, Accumulated Other Comprehensive Income, for the effective
portion of the hedge. The ineffective
portion of the hedge transaction shall
be reflected in the same account or expense account that will be used when
the hedged item enters into the determination of net income. Amounts recorded in other comprehensive income
shall be reclassified into earning in the
same period or periods that the hedged
forecasted item enters into the determination of net income.
(y) Accounting for asset retirement obligations. (1) An asset retirement obligation represents a liability for the legal
obligation associated with the retirement of a tangible long-lived asset that
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§ 1767.16
7 CFR Ch. XVII (1–1–12 Edition)
a company is required to settle as a result of an existing or enacted law, statute, ordinance, or written or oral contract or by legal construction of a contract under the doctrine of promissory
estoppel. An asset retirement cost represents the amount capitalized when
the liability is recognized for the longlived asset that gives rise to the legal
obligation. The amount recognized for
the liability and an associated asset retirement cost shall be stated at the fair
value of the asset retirement obligation in the period in which the obligation is incurred.
(2) The utility shall initially record a
liability for an asset retirement obligation in Account 230, Asset Retirement
Obligations, and charge the associated
asset retirement costs to electric utility plant (including Accounts 101.1 and
120.6), and nonutility plant, as appropriate, related to the plant that gives
rise to the legal obligation. The asset
retirement cost shall be depreciated
over the useful life of the related asset
that gives rise to the obligation. For
periods subsequent to the initial recording of the asset retirement obligation, a utility shall recognize the period to period changes of the asset retirement obligation that result from
the passage of time due to the accretion of the liability and any subsequent
measurement changes to the initial liability for the legal obligation recorded in Account 230, Asset retirement obligations, as follows:
(i) The utility shall record the accretion of the liability by debiting Account 411.10, Accretion Expense, for
electric utility plant, Account 413, Expenses of Electric Plant Leased to Others, for electric plant leased to others,
and Account 421, Miscellaneous Nonoperating Income, for nonutility plant
and crediting Account 230, Asset Retirement Obligations; and
(ii) The utility shall recognize any
subsequent measurement changes of
the liability initially recorded in Account 230, Asset Retirement Obligation, for each specific asset retirement
obligation as an adjustment of that liability in Account 230 with the corresponding adjustment to electric utility plant, electric plant leased to others, and nonutility plant, as appropriate. The utility shall on a timely
basis
monitor
any
measurement
changes of the asset retirement obligations.
(3) Gains or losses resulting from the
settlement of asset retirement obligations associated with utility plant resulting from the difference between the
amount of the liability for the asset retirement obligation included in Account 230, Asset Retirement Obligations, and the actual amount paid to
settle the obligation shall be accounted
for as follows:
(i) Gains shall be credited to Account
411.6, Gains from Disposition of Utility
Plant, and;
(ii) Losses shall be charged to Account 411.7, Losses from Disposition of
Utility Plant.
(4) Gains or losses on the settlement
of asset retirement obligations associated with nonutility plant resulting
from the difference between the
amount of the liability for the asset retirement obligation in Account 230,
Asset Retirement Obligations, and the
amount paid to settle the obligation,
shall be accounted for as follows:
(i) Gains shall be credited to Account
421, Miscellaneous Nonoperating Income, and;
(ii) Losses shall be charged to Account 426.5, Other Deductions.
(5) For purposes of analyses a utility
shall maintain supporting documentation so as to be able to furnish accurately and expeditiously with respect
to each asset retirement obligation the
full details of the identity and nature
of the legal obligation, the year incurred, the identity of the plant giving
rise to the obligation, the full particulars relating to each component and
supporting computations related to the
measurement of the asset retirement
obligation.
[58 FR 59825, Nov. 10, 1993, as amended at 73
FR 30280, May 27, 2008]
§ 1767.16 Electric plant instructions.
(a) Classification of electric plant at effective date of system of accounts. (1) The
electric plant accounts provided herein
are the same as those contained in the
prior system of accounts except for inclusion of accounts for nuclear production plant and some changes in classification in the general equipment accounts. Except for these changes, the
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Rural Utilities Service, USDA
§ 1767.16
(b) Electric plant to be recorded at cost.
(1) All amounts included in the accounts for electric plant acquired as an
operating unit or system, except as
otherwise provided in the texts of the
intangible plant accounts, shall be
stated at the cost incurred by the person who first devoted the property to
utility service. All other electric plant
shall be included in the accounts at the
cost incurred by the utility except for
property acquired by lease which qualifies as capital lease property under
§ 1767.15 (s), Criteria for Classifying
Leases, and is recorded in Account
101.1, Property Under Capital Lease, or
Account 120.6, Nuclear Fuel Under Capital Leases. Where the term ‘‘cost’’ is
used in the detailed plant accounts, it
shall have the meaning stated in this
paragraph (b).
(2) When the consideration given for
property is other than cash, the value
of such consideration shall be determined on a cash basis (see, however,
the definition of cost in § 1767.10). In
the entry recording such transition,
the actual consideration shall be described with sufficient particularity to
identify it. The utility shall be prepared to furnish RUS the particulars of
its determination of the cash value of
the consideration if other than cash.
(3) When property is purchased under
a plan involving deferred payments, no
charge shall be made to the electric
plant accounts for interest, insurance,
or other expenditures occasioned solely
by such form of payment.
(4) The electric plant accounts shall
not include the cost or other value of
electric plant contributed to the company. Contributions in the form of
money or its equivalent toward the
construction of electric plant shall be
credited to accounts charged with the
cost of such construction. Plant constructed from contributions of cash or
its equivalent shall be shown as a reduction to gross plant constructed
when assembling cost data in work orders for posting to plant ledgers of accounts. The accumulated gross costs of
plant accumulated in the work order
shall be recorded as a debit in the plant
ledger of accounts along with the related amount of contributions concurrently be recorded as a credit.
balances in the various plant accounts,
as determined under the prior system
of accounts, should be carried forward.
Any remaining balance of plant which
has not yet been classified, pursuant to
the requirements of the prior system,
shall be classified in accordance with
the following instructions.
(2) The cost to the utility of its unclassified plant shall be ascertained by
analysis of the utility’s records. Adjustments shall not be made to record
in utility plant accounts amounts previously charged to operating expenses
or to income deductions in accordance
with the USoA in effect at the time or
in accordance with the discretion of
management as exercised under a
USoA, or under accounting practices
previously followed.
(3) The detailed electric plant accounts (301 to 399, inclusive) shall be
stated on the basis of cost to the utility of plant constructed by it and the
original cost, estimated if not known,
of plant acquired as an operating unit
or system. The difference between the
original cost, as above, and the cost to
the utility of electric plant after giving
effect to any accumulated provision for
depreciation or amortization shall be
recorded in Account 114, Electric Plant
Acquisition Adjustments. The original
cost of electric plant shall be determined by analysis of the utility’s
records or those of the predecessor or
vendor companies with respect to electric plant previously acquired as operating units or systems and the difference between the original cost so determined, less accumulated provisions
for depreciation and amortization and
the cost to the utility with necessary
adjustments for retirements from date
of acquisition, shall be entered in Account 114, Electric Plant Acquisition
Adjustments. Any difference between
the cost of electric plant and its book
cost, when not properly includible in
other accounts, shall be recorded in Account 116, Other Electric Plant Adjustments.
(4) Plant acquired by lease which
qualifies as capital lease property
under Sec. 1767.15(s), Criteria for
Classifying Leases, shall be recorded in
Account 101.1, Property Under Capital
Leases, or Account 120.6, Nuclear Fuel
Under Capital Leases, as appropriate.
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§ 1767.16
7 CFR Ch. XVII (1–1–12 Edition)
(c) Components of construction cost.
The cost of construction properly includible in the electric plant accounts
shall include, where applicable, the direct and overhead costs as listed and
defined hereunder:
(1) Contract work includes amounts
paid for work performed under contract
by other companies, firms, or individuals, costs incident to the award of
such contracts, and the inspection of
such work.
(2) Labor includes the pay and expenses of employees of the utility engaged on construction work, and related workmen’s compensation insurance, payroll taxes, and similar items
of expense. It does not include the pay
and expenses of employees which are
distributed to construction through
clearing accounts nor the pay and expenses included in other items hereunder.
(3) Materials and supplies includes the
purchase price at the point of free delivery plus customs duties, excise
taxes, the cost of inspection, loading
and transportation, the related stores
expenses, and the cost of fabricated
materials from the utility’s shop. In
determining the cost of materials and
supplies used for construction, proper
allowance shall be made for unused
materials and supplies, for materials
recovered from temporary structures
used in performing the work involved,
and for discounts allowed and realized
in the purchase of materials and supplies.
equipment. (See Item in paragraph
(c)(5) of this section.)
(5) Special machine service includes the
cost of labor (optional), materials and
supplies, depreciation, and other expenses incurred in the maintenance,
operation and use of special machines,
such as steam shovels, pile drivers, derricks, ditchers, scrapers, material
unloaders, and other labor saving machines; also expenditures for rental,
maintenance and operation of machines of others. It does not include the
cost of small tools and other individual
items of small value or short life which
are included in the cost of materials
and supplies. (See Item in paragraph
(c)(3) of this section.) When a particular construction job requires the
use for an extended period of time of
special machines, transportation or
other equipment, the net book cost
thereof, less the appraised or salvage
value at time of release from the job,
shall be include in the cost of construction.
(6) Shop service includes the proportion of the expense of the utility’s shop
department assignable to construction
work except that the cost of fabricated
materials from the utility’s shop shall
be included in ‘‘materials and supplies.’’
(7) Protection includes the cost of protecting the utility’s property from fire
or other casualties and the cost of preventing damages to others, or to the
property of others, including payments
for discovery or extinguishment of
fires, cost of apprehending and prosecuting incendiaries, witness fees in relation thereto, amounts paid to municipalities and others for fire protection, and other analogous items of expenditures in connection with construction work.
(8) Injuries and damages includes expenditures or losses in connection with
construction work on account of injuries to persons and damages to the
property of others; also the cost of investigation of and defense against actions for such injuries and damages. Insurance recovered or recoverable on account of compensation paid for injuries
to persons incident to construction
shall be credited to the account or accounts to which such compensation is
NOTE: The cost of individual items of
equipment of small value (for example, $500
or less) or of short life, including small portable tools and implements, shall not be
charged to utility plant accounts unless the
correctness of the accounting therefor is
verified by current inventories. The cost
shall be charged to the appropriate operating
expense or clearing accounts, according to
the use of such items, or, if such items are
consumed directly in construction work, the
cost shall be included as part of the cost of
the construction.
(4) Transportation includes the cost of
transporting employees, materials and
supplies, tools, purchased equipment,
and other work equipment (when not
under own power) to and from points of
construction. It includes amounts paid
to others as well as the cost of operating the utility’s own transportation
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Rural Utilities Service, USDA
§ 1767.16
charged. Insurance recovered or recoverable on account of property damages
incident to construction shall be credited to the account or accounts
charged with the cost of the damages.
(9) Privileges and permits includes payments for and expenses incurred in securing temporary privileges, permits or
rights in connection with construction
work, such as for the use of private or
public property, streets, or highways,
but it does not include rents, or
amounts chargeable as franchises and
consents for which see Account 302,
Franchises and Consents.
(10) Rents includes amounts paid for
the use of construction quarters and office space occupied by construction
forces and amounts properly includible
in construction costs for such facilities
jointly used.
(11) Engineers and supervision includes
the portion of the pay and expenses of
engineers, surveyors, draftsmen, inspectors, superintendents and their assistants applicable to construction
work.
(12) General administration capitalized
includes the portion of the pay and expenses of the general officers and administrative and general expenses applicable to construction work.
(13) Engineering services includes
amounts paid to other companies,
firms, or individuals engaged by the
utility to plan, design, prepare estimates, supervise, inspect, or give general advice and assistance in connection with construction work.
(14) Insurance includes premiums paid
or amounts provided or reserved as
self-insurance
for
the
protection
against loss and damages in connection
with construction, by fire or other cas-
⎛
ualty, injuries or deaths of persons
other than employees, damages to
property of others, defalcation of employees and agents, and the nonperformance of contractual obligations
of others. It does not include workmen’s compensation or similar insurance on employees included as ‘‘labor’’
in Item in paragraph (c)(2) of this section.
(15) Law expenditures includes the
general law expenditures incurred in
connection with construction and the
court and legal costs directly related
thereto, other than law expenses included in ‘‘Protection,’’ Item in paragraph (c)(7) of this section, and in Injuries and damages, Item in paragraph
(c)(8) of this section.
(16) Taxes includes taxes on physical
property (including land) during the
period of construction and other taxes
properly includible in construction
costs before the facilities become available for service.
(17) Allowance for funds used during
construction includes the net cost for
the period of construction of borrowed
funds used for construction purposes
and a reasonable rate on other funds
when so used, not to exceed, without
prior approval of RUS, allowances computed in accordance with the formula
prescribed in Item in paragraph
(c)(17)(i) of this section. No allowance
for funds used during construction
charges shall be included in these accounts upon expenditures for construction projects which have been abandoned.
(i) The formula and elements for the
computation of the allowance for funds
used during construction shall be:
⎞
⎞⎛
⎛
⎞
A = s⎜⎜ S ⎟⎟ + d⎜⎜ D ⎟⎟ ⎜⎜1− S ⎟⎟
i ⎜⎜ W ⎟⎟ ⎜⎝ D + P + C ⎟⎠ ⎜⎜ W ⎟⎟
⎝
⎠
⎝
⎠
⎡
⎢
⎢
⎢
⎢⎣
⎤
⎡
⎛
⎞
⎛
⎞
⎤
⎥
⎢
Ac = 1− S ⎥⎥⎥ ⎢⎢P⎜⎜ P ⎟⎟ + c⎜⎜ C ⎟⎟ ⎥⎥
⎜
⎟
⎜
⎟
⎢
W ⎥⎦ ⎢ ⎝ D + P + C ⎠ ⎜⎝ D + P + C ⎟⎠ ⎥⎥
⎦
⎣
Ac = Allowance for other funds used during
construction rate.
S = Average short-term debt.
Where:
Ai = Gross allowance for borrowed funds used
during construction rate.
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EC16SE91.004
25
§ 1767.16
7 CFR Ch. XVII (1–1–12 Edition)
s = Short-term debt interest rate.
D = Long-term debt.
d = Long-term debt interest rate.
P = Preferred stock.
p = Preferred stock cost rate.
C = Patronage capital assigned.
c = Entity’s incremental borrowing rate.
W = Average balance in construction work in
progress plus nuclear fuel in process of refinement, conversion, enrichment, and fabrication, less asset retirement costs related to plant under construction.
other plants, the credit shall consist of
the selling price of the energy.
(B) Where the power generated by a
plant under construction is delivered
to the utility’s electric system for distribution and sale, or is delivered to an
associated company, or is delivered to
and used by the utility for purposes
other than distribution and sale (for
manufacturing or industrial use, for
example), the credit shall be the fair
value of the energy so delivered.
(C) Revenue shall also include rentals
for lands, buildings, and other property, and miscellaneous receipts not
properly includible in other accounts.
(ii) Expenses shall consist of the cost
of operating the power plant, and other
costs incident to the production and
delivery of the power for which construction is credited under paragraph
(c)(18)(i) of this section, including the
cost of repairs and other expenses of
operating and maintaining lands,
buildings, and other property, and
other miscellaneous and like expenses
not properly includible in other accounts.
(19) Training costs. (i) When it is necessary that employees be trained to operate or maintain plant facilities that
are being constructed and such facilities are not conventional in nature, or
are new to the company’s operations,
these costs may be capitalized as a
component of construction cost.
(ii) Once plant is placed in service,
the capitalization of training costs
shall cease and subsequent training
costs shall be expensed. (See § 1767.17
(d).)
(20) Studies. (i) Studies include the
costs of studies such as nuclear operational, safety, or seismic studies, or
environmental studies mandated by
regulatory bodies relative to plant
under construction.
(ii) Studies relative to facilities in
service shall be charged to Account 183,
Preliminary Survey and Investigation
Charges.
(21) Asset retirement. The costs recognized as a result of asset retirement
obligations incurred during the construction and testing of utility plant
shall constitute a component of construction costs.
(d) Overhead construction costs. (1) All
overhead construction costs, such as
(ii) The rate shall be determined annually.
(A) The balance for long-term debt,
preferred stock, and patronage capital
assigned shall be the actual book balances as of the end of the prior year.
(B) The cost rate for long-term debt
and preferred stock shall be the
weighted average cost.
(C) The cost rate for patronage capital assigned shall be the entity’s incremental borrowing rate.
(D) The short-term debt balances and
related cost and the average balance
for construction work in progress plus
nuclear fuel in process of refinement,
conversion, enrichment, and fabrication shall be estimated for the current
year with appropriate adjustments as
actual data becomes available.
NOTE: When only a portion of a plant or
project is placed in operation or is completed
and ready for service but the construction
work as a whole is incomplete, that part of
the cost of the property placed in operation
or ready for service shall be treated as
‘‘Electric Plant in Service,’’ and an allowance for funds used during construction
thereon as a charge to construction shall
cease. Allowance for funds used during construction on that part of the cost of the
plant which is incomplete may continue to
be charged to construction until such time
as it is placed in operation or is ready for
service, except as limited in Item in paragraph (c)(17) of this section.
(18) Earnings and expenses during construction. The earnings and expenses
during construction shall constitute a
component of construction costs.
(i) The earnings shall include revenues received or earned for power produced by generating plants during the
construction period and sold or used by
the utility.
(A) Where such power is sold to an
independent purchaser before intermingling with power generated by
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Rural Utilities Service, USDA
§ 1767.16
engineering, supervision, general office
salaries and expenses, construction engineering and supervision performed by
others than the accounting utility, law
expenses, insurance, injuries and damages, relief and pensions, taxes and interest, shall be charged to particular
jobs or units on the basis of the
amounts of such overheads reasonably
applicable thereto, to the end that each
job or unit shall bear its equitable proportion of such costs and that the entire cost of the unit, both direct and
overhead, shall be deducted from the
plant accounts as the time the property is retired.
(2) As far as practicable, the determination of payroll charges includible
in construction overheads shall be
based on time card distributions thereof.
(i) Where this procedure is impractical, special studies shall be made periodically of the time of supervisory
employees devoted to construction activities to the end that only such overhead costs as have a definite relation
to construction shall be capitalized.
(ii) The addition to direct construction cost of arbitrary percentages or
amounts to cover assumed overhead
costs is not permitted.
(3) The records supporting the entries
for overhead constructions costs shall
be so kept as to show:
(i) The total amount of each overhead for each year;
(ii) The nature and amount of each
overhead expenditure charged to each
construction work order and to each
electric plant account; and
(iii) The bases of distribution of such
costs.
(e) Electric plant purchased or sold. (1)
When electric plant constituting an operating unit or system is acquired by
purchase, merger, consolidation, liquidation, or otherwise, after the effective date of this system of accounts,
the costs of acquisition, including expenses incidental thereto properly includible in electric plant, shall be
charged to Account 102, Electric Plant
Purchased or Sold.
(2) The accounting for the acquisition
shall then be completed as follows:
(i) The original cost of plant, estimated if not known, shall be credited
to Account 102, Electric Plant Pur-
chased or Sold, and concurrently
charged to the appropriate electric
plant in service accounts and to Account 104, Electric Plant Leased to
Others; Account 105, Electric Plant
Held for Future Use; and Account 107,
Construction Work in Progress—Electric, as appropriate.
(ii) The depreciation and amortization applicable to the original cost of
the properties purchased shall be
charged to Account 102, Electric Plant
Purchased or Sold, and concurrently
credited to the appropriate account for
accumulated provision for depreciation
or amortization.
(iii) The cost to the utility of any
property includible in Account 121,
Nonutility Property, shall be transferred thereto.
(iv) The amount remaining in Account 102, Electric Plant Purchased or
Sold, shall then be closed to Account
114, Electric Plant Acquisition Adjustments.
(3) If property acquired in the purchase of an operating unit or system is
in such physical condition when acquired that it is necessary to substantially rehabilitate it in order to bring
the property up to the standards of the
utility, the cost of such work, except
replacements, shall be accounted for as
a part of the purchase price of the
property.
(4) When any property acquired as an
operating unit or system includes duplicate or other plant which will be retired by the accounting utility in the
reconstruction of the acquired property
or its consolidation with previously
owned property, the proposed accounting for such property shall be presented
to RUS.
(5) In connection with the acquisition
of electric plant constituting an operating unit or system, the utility shall
procure, if possible, all existing records
relating to the property acquired or
certified copies thereof, and shall preserve such records in conformity with
regulations or practices governing the
preservation of records of its own construction.
(6) When electric 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
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§ 1767.16
7 CFR Ch. XVII (1–1–12 Edition)
or transferred to another shall be credited to the appropriate utility plant accounts, including amounts carried in
Account 114, Electric Plant Acquisition
Adjustments, and 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, shall
be charged to such accounts and contra
entries made to Account 102, Electric
Plant Purchased or Sold. Unless otherwise ordered by RUS, the difference, if
any, between:
(i) The net amount of debits and
credits, and
(ii) The consideration received for
the property (less commissions and
other expenses of making the sale)
shall be included in Account 421.1, Gain
on Disposition of Property, or Account
421.2, Loss on Disposition of Property.
(See Account 102, Electric Plant Purchased or Sold.)
provisions of (1) are applicable to property leased under either capital leases
or operating leases.
(2) If improvements made to property
leased for a period of more than one
year are of relatively minor cost, or if
the lease is for a period of not more
than one year, the cost of the improvements shall be charged to the account
in which the rent is included, either directly or by amortization thereof.
(g) Land and land rights. (1) The accounts for land and land rights shall
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 interests in land.
(i) Do not include in the accounts for
land and land rights and rights-of-way
costs incurred in connection with first
clearing and grading of land and rightsof-way and the damage costs associated
with the construction and installation
of plant.
(ii) Such costs shall be included in
the appropriate plant accounts directly
benefited.
(2) 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.
(i) Interest on unpaid balances shall
be charged to the appropriate interest
account.
(ii) 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.
(3) The net profit from the sale of
timber, cord wood, sand, gravel, other
resources or other property acquired
with the rights-of-way or other lands
shall be credited to the appropriate
plant accounts to which related. Where
land is held for a considerable period of
time and timber and other natural resources on the land at the time of purchase increase in value, the net profit
(after giving effect to the cost of the
NOTE: 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 RUS, may be combined. In
the event original cost has not been determined, the resulting utility shall proceed to
determine such cost as outlined herein.
(f) Expenditures on leased property. (1)
The cost of substantial initial improvements (including repairs, rearrangements, additions, and betterments)
made in the course of preparing for
utility service property leased for a period of more than one year, and the
cost of subsequent substantial additions, replacements, or betterments to
such property, shall be charged to the
electric plant account appropriate for
the class of property leased.
(i) If the service life of the improvements is terminable by action of the
lease, the cost, less net salvage, of the
improvements shall be spread over the
life of the lease by charges to Account
404, Amortization of Limited-Term
Electric Plant.
(ii) If the service life is not terminated by action of the lease but by depreciation proper, the cost of the improvements, less net salvage, shall be
accounted for as depreciable plant. The
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Rural Utilities Service, USDA
§ 1767.16
natural resources) from the sale of timber or its products or other natural resources shall be credited to the appropriate utility operating income account when such land has been recorded in Account 105, Electric Plant
Held for Future Use, or classified as
plant in service, otherwise to Account
421, Miscellaneous Nonoperating Income.
(4) Separate entries shall be made for
the acquisition, transfer, or retirement
of each parcel of land, and each land
right (except rights-of-way for distribution lines), or water right, having a life
of more than one year.
(i) A record shall be maintained
showing the nature of ownership, full
legal description, area, map reference,
purpose for which used, city, county,
and tax district on which situated,
from whom purchased or to whom sold,
payment given or received, other costs,
contract date and number, date of recording of deed, and book and page of
record.
(ii) Entries transferring or retiring
land or land rights shall refer to the
original entry recording its acquisition.
(5) Any difference between the
amount received from the sale of land
or land rights, less agents’ commissions and other costs incident to the
sale, and the book cost of such land or
rights, shall be included in Account
411.6, Gains from Disposition of Utility
Plant, or 411.7, Losses from Disposition
of Utility Plant, when such property
has been recorded in Account 105, Electric Plant Held for Future Use, otherwise to Account 421.1, Gain on Disposition of Property, or 421.2, Loss on Disposition of Property, as appropriate,
unless a reserve therefor has been authorized and provided. Appropriate adjustments of the accounts shall be
made with respect to any structures or
improvements located on land sold.
(6) 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 ap-
praised and a 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 land is recorded.
(7) When the purchase of land for
electric 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 105, Electric Plant
Held for Future Use, or Account 121,
Nonutility Property, as appropriate.
(8) Provisions shall be made for amortizing amounts carried in the accounts for limited-term interest in
land so as to apportion equitably the
cost of each interest over the life
thereof. (See Account 111, Accumulated
Provision for Amortization of Electric
Utility Plant, and Account 404, Amortization of Limited-Term Electric
Plant.)
(9) The items of cost to be included in
the accounts for land and land rights
are as follows:
(i) Bulkheads, buried, not requiring
maintenance or replacement;
(ii) First cost of acquisition including mortgages and other liens assumed
(but not subsequent interest thereon);
(iii) Condemnation proceedings, including court and counsel costs;
(iv) Consents and abutting damages;
(v) Conveyancers’ and notaries’ fees;
(vi) Fees, commissions, and salaries
to brokers, agents, and other in connection with the acquisition of the
land or land rights;
(vii) Leases, cost of voiding upon purchase to secure possession of land;
(viii) Removing, relocating, or reconstructing property of others, such as
buildings, highways, railroads, bridges,
cemeteries, churches, telephone and
power lines, etc., in order to acquire
quiet possession;
(ix) Retaining walls unless identified
with structures;
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§ 1767.16
7 CFR Ch. XVII (1–1–12 Edition)
(x) Special assessments levied by
public authorities for public improvements on the basis of benefits for new
roads, new bridges, new sewers, new
curbing, new pavements, and other
public improvements, but not taxes
levied to provide for the maintenance
of such improvements;
(xi) Surveys in connection with the
acquisition, but not amounts paid for
topographical surveys and maps where
such costs are attributable to structures or plant equipment erected or to
be erected or installed on such land;
(xii) Taxes assumed, accrued to date
of transfer of title;
(xiii) Title, examining, clearing, insuring, and registering in connection
with the acquisition and defending
against claims relating to the period
prior to the acquisition;
(xiv) Appraisals prior to closing title;
(xv) Cost of dealing with distributees
or legatees residing outside of the state
or county, such as recording power of
attorney, recording will or exemplification of will, recording satisfaction of
state tax;
(xvi) Filing satisfaction of mortgage;
(xvii) Documentary stamps;
(xviii) Photographs of property at acquisition;
(xix) Fees and expenses incurred in
the acquisition of water rights and
grants;
(xx) Cost of fill to extend bulkhead
line over land under water, where riparian rights are held, which is not occasioned by the erection of a structure;
(xxi) Sidewalks and curbs constructed by the utility on public property; and
(xxii) Labor and expenses in connection with securing rights of way, where
performed by company employees and
company agents.
(h) Structures and improvements. (1)
The accounts for structures and improvements shall include the cost of all
buildings and facilities to house, support, or safeguard property or 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.
(2) Also include those costs incurred
in connection with the first clearing
and grading of land and rights-of-way
and the damage costs associated with
construction and installation of plant.
(3) The cost of specially provided
foundations not intended to outlast the
machinery or apparatus for which provided, and the cost of angle irons, and
castings installed at the base of an
item of equipment, shall be charged to
the same account as the cost of the
machinery, apparatus, or equipment.
(4) Minor buildings and structures,
such as valve towers, patrolmen’s towers, telephone stations, fish and wildlife, and recreation facilities which are
used directly in connection with or
form a part of a reservoir, dam or waterway shall be considered a part of the
facility in connection with which constructed or operated and the cost
thereof accounted for accordingly.
(5) 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.
(6) Where the structure of a dam
forms also the foundation of the power
plant building, such foundation shall
be considered a part of the dam.
(7) The cost of disposing of materials
excavated in connection with construction of structures shall be considered
as a part of the cost of such work, except when such material is used for filling, the cost of loading, hauling, and
dumping shall be equitably apportioned between the work in connection
with which the removal occurs and the
work in connection with which the material is used; and when such material
is sold, the net amount realized from
such sales shall be credited to the work
in connection with which the removal
occurs. If the amount realized from the
sale of excavated materials exceeds the
removal costs and the costs in connection with the sale, the excess shall be
credited to the land account in which
the site is carried.
(8) Lighting or other fixtures temporarily attached to building for purposes
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Rural Utilities Service, USDA
§ 1767.16
of display or demonstration shall not
be included in the cost of the building
but in the appropriate equipment account.
(9) The items of cost to be included in
the accounts for structures and improvements are as follows:
(i) Architects’ plans and specifications including supervision;
(ii) Ash pits (when located within the
building);
(iii) Athletic field structures and improvements;.
(iv) Boilers, furnaces, piping, wiring,
fixtures, and machinery for heating,
lighting, signaling, ventilating, and air
conditioning systems, plumbing, vacuum cleaning systems, incinerator and
smoke pipe, flues, etc;
(v) Bulkheads, including dredging,
riprap fill, piling, decking, concrete,
fenders, etc., when exposed and subject
to maintenance and replacement;
(vi) Chimneys;
(vii) Coal bins and bunkers;
(viii) Commissions and fees to brokers, agents, architects and others;
(ix) Conduit (not to be removed) with
its contents;
(x) Damages to abutting property
during construction;
(xi) Docks;
(xii) Door checks and door stops;
(xiii) Drainage and sewerage systems;
(xiv) Elevators, cranes, hoists, etc.,
and the machinery for operating them;
(xv) Excavation, including shoring,
bracing, bridging, refill and disposal of
excess excavated material, cofferdams
around foundation, pumping water
from cofferdams during construction
and test borings;
(xvi) Fences and fence curbs (not including protective fences isolating
items of equipment, which shall be
charged to the appropriate equipment
accounts);
(xvii) Fire protection systems when
forming a part of a structure;
(xviii) Flagpole;
(xix) Floor covering (permanently attached);
(xx) Foundations and piers for machinery, constructed as a permanent
part of a building or other item listed
herein;
(xxi) Grading and clearing when directly occasioned by the building of a
structure;
(xxii) Intrasite communication system, poles, pole fixtures, wires, and
cable;
(xxiii)
Landscaping,
lawns,
shrubbery, etc.;
(xxiv) Leases, voiding upon purchase
to secure possession of structures;
(xxv) Leased property, expenditures
on;
(xxvi) Lighting fixtures and outside
lighting system;
(xxvii) Mailchutes when part of a
building;
(xxviii) Marquee, permanently attached to the building;
(xxix) Painting, first cost;
(xxx) Permanent paving, concrete,
brick, flagstone, asphalt, etc., within
the property lines;
(xxxi) Partitions, including movable;
(xxxii) Permits and privileges;
(xxxiii)
Platforms,
railings
and
gratings when constructed as a part of
a structure;
(xxxiv) Power boards for services to a
building;
(xxxv) Refrigerating systems for general use;
(xxxvi) Retaining walls except when
identified with land;
(xxxvii) Roadways, railroads, bridges,
and trestles intrasite except railroads
provided for in equipment accounts;
(xxxviii) Roofs;
(xxxix) Scales, connected to and
forming a part of a structure;
(xl) Screens;
(xli) Sewer systems, for general use;
(xlii) Sidewalks, culverts, curbs and
streets constructed by the utility on
its property;
(xliii) Sprinkling systems;
(xliv) Sump pumps and pits;
(xlv) Stacks—brick, steel, or concrete, when set on foundation forming
part of general foundation and steelwork of a building;
(xlvi) Steel inspection during construction;
(xlvii) Storage facilities constituting
a part of a building;
(xlviii) Storm doors and windows;
(xlix) Subways, areaways, and tunnels, directly connected to and forming
part of a structure;
(l) Tanks, constructed as part of a
building or as a distinct structural
unit;
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§ 1767.16
7 CFR Ch. XVII (1–1–12 Edition)
ple, $500 or less) or short life, unless
the correctness of the accounting
therefor as electric plant is verified by
current inventories.
(i) Special tools acquired and included in the purchase price of equipment shall be included in the appropriate plant accounts.
(ii) Portable drills and similar tool
equipment when used in connection
with the operation and maintenance of
a particular plan or department, such
as production, transmission, or distribution or in ‘‘stores’’, shall be
charged to the plant accounts appropriate for their use.
(4) 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.
(5) The equipment accounts shall include the necessary costs of testing or
running a plant or parts thereof during
an experimental or test period prior to
such plant becoming ready for or
placed in service.
(i) The utility shall furnish RUS with
full particulars of and justification for
any test or experimental run extending
beyond a period of 120 days for nuclear
plant, and a period of 90 days for all
other plant.
(ii) Such particulars shall include a
detailed operational and downtime log
showing days of production, gross kilowatts generated by hourly increments,
types, and periods of outages by hours
with explanation thereof, beginning
with the first date the equipment was
either tested or synchronized on the
line to the end of the test period.
(6) The cost of efficiency or other
tests made subsequent to the date
equipment becomes available for service shall be charged to the appropriate
expense accounts, except that tests to
determine whether equipment meets
the specifications and requirements as
(li) Temporary heating during construction (net cost);
(lii) Temporary water connection
during construction (net cost);
(liii) Temporary shanties and other
facilities used during construction (net
cost);
(liv) Topographical maps;
(lv) Tunnels, intake and discharge,
when constructed as part of a structure, including sluice gates, and those
constructed to house mains;
(lvi) Vaults constructed as part of a
building;
(lvii) Watchmen’s sheds and clock
systems (net cost when used during
construction only);
(lviii) Water basins or reservoirs;
(lix) Water front improvements;
(lx) Water meters and supply system
for a building or for general company
purposes;
(lxi) Water supply piping, hydrants,
and wells;
(lxii) Wharves;
(lxiii) Window shades and ventilators;
(lxiv) Yard drainage system;
(lxv) Yard lighting system; and
(lxvi) Yard surfacing, gravel, concrete, or oil (First cost only).
NOTE: Structures and improvements accounts shall be credited with the cost of coal
bunkers, stacks, foundations, subways, and
tunnels, the use of which has terminated
with the removal of the equipment with
which they are associated even though they
have not been physically removed.
(i) Equipment. (1) The cost of equipment chargeable to the electric 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.
(2) Also include those costs incurred
in connection with the first clearing
and grading of land and rights-of-way
and the damage costs associated with
construction and installation of plant.
(3) Exclude from equipment accounts
hand and other portable tools, which
are likely to be lost or stolen or which
have relatively small value (for exam-
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Rural Utilities Service, USDA
§ 1767.16
to efficiency, or performance guaranteed by manufacturers, made after operations have commenced and within
the period specified in the agreement
or contract of purchase, may be
charged to the appropriate electric
plant accounts.
(j) Additions and retirements of electric
plant. (1) For the purpose of avoiding
undue refinement in accounting for additions to and retirements and replacements of electric plant, all property
shall be considered as consisting of retirement units and minor items of
property.
(2) The addition and retirement of retirement units shall be accounted for
as follows:
(i) When a retirement unit is added
to electric plant, the cost thereof shall
be added to the appropriate electric
plant account, except that when units
are acquired in the acquisition of any
electric plant constituting an operating system, they shall be accounted
for as provided in paragraph (e) of this
section.
(ii) When a retirement unit is retired
from electric plant, with or without replacement, the book cost thereof shall
be credited to the electric plant account in which it is included, determined in the manner set forth in Item
in paragraph (j)(4) of this section. If the
retirement unit is of a depreciable
class, the book cost of the unit retired
and credited to electric plant shall be
charged to the accumulated provision
for depreciation applicable to such
property. The cost of removal and the
salvage shall be charged or credited, as
appropriate, to such depreciation account.
(3) The addition and retirement of
minor items of property shall be accounted for as follows:
(i) When a minor item of property
which did not previously exist is added
to plant, the cost thereof shall be accounted for in the same manner as for
the addition of a retirement unit, as
set forth in Item in paragraph (j)(2)(i)
of this section, if a substantial addition
results, otherwise the charge shall be
to the appropriate maintenance expense account.
(ii) When a minor item of property is
retired and not replaced, the book cost
thereof shall be credited to the electric
plant account in which it is included;
and, in the event the minor item is a
part of depreciable plant, the account
for accumulated provision for depreciation shall be charged with the book
cost and cost of removal and credited
with the salvage. If, however, the book
cost of the minor item retired and not
replaced has been or will be accounted
for by its inclusion in the retirement
unit of which it is a part when such
unit is retired, no separate credit to
the property account is required when
such minor item is retired.
(iii) When a minor item of depreciable property is replaced independently of the retirement unit of which it
is a part, the cost of replacement shall
be charged to the maintenance account
appropriate for the item, except that if
the replacement effects a substantial
betterment (the primary aim of which
is to make the property affected more
useful, more efficient, of greater durability, or of greater capacity), the excess cost of the replacement over the
estimated cost at current prices of replacing without betterment shall be
charged to the appropriate electric
plant accounts.
(4) The book cost of electric plant retired shall be the amount at which
such property is included in the electric 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.
(5) The book cost of land retired shall
be credited to the appropriate land accounts. If the land is sold, the difference between the book cost (less any
accumulated provision for depreciation
or amortization therefore which has
been authorized and provided) and the
sale price of the land (less commissions
and other expenses of making the sale)
shall be recorded in Account 411.6,
Gains from Disposition of Utility
Plant, or Account 411.7, Losses from
Disposition of Utility Plant, when the
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§ 1767.16
7 CFR Ch. XVII (1–1–12 Edition)
property has been recorded in Account
105, Electric Plant Held for Future Use,
otherwise to Accounts 421.1, Gain on
Disposition of Property, or 421.2, Loss
on Disposition of Property, as appropriate. If the land is not used in utility
service but is retained by the utility,
the book cost shall be charged to Account 105, Electric Plant Held for Future Use, or Account 121, Nonutility
Property, as appropriate.
(6) The book cost less net salvage of
depreciable electric plant retired shall
be charged in its entirety to Account
108, Accumulated Provision for Depreciation of Electric Utility Plant in
Service. Any amounts which, by approval or order of RUS, are charged to
Account 182.1, Extraordinary Property
Losses, shall be credited to Account
108.
(7) The accounting for the retirement
of amounts included in Account 302,
Franchises and Consents, and Account
303, Miscellaneous Intangible Plant,
and the items of limited-term interest
in land included in the accounts for
land and land rights, shall be as provided for in the text of Account 111, Accumulated Provision for Amortization
of Electric Utility Plant in Service;
Account 404, Amortization of LimitedTerm Electric Plant; and Account 405,
Amortization of Other Electric Plant.
(k) Work order and property record system required. (1) Each utility shall
record all construction and retirements
of electric plant by means of work orders or job orders. Separate work orders may be opened for additions to
and retirements of electric plant or the
retirements may be included with the
construction work order, provided,
however, that all items relating to the
retirements shall be kept separate
from those relating to construction
and provided, further, that any maintenance costs involved in the work shall
likewise be segregated.
(2) Each utility shall keep its work
order system so as to show the nature
of each addition to or retirement of
electric plant, the total cost thereof,
the source or sources of costs, and the
electric plant account or accounts to
which charged or credited. Work orders
covering jobs of short duration may be
cleared monthly.
(3) Each utility shall maintain
records in which, for each plant account, the amounts of the annual additions and retirements are classified so
as to show the number and cost of the
various record units or retirement
units.
(l) Transfers of property. When property is transferred from one electric
plant account to another, from one
utility department to another, such as
from electric to gas, from one operating division or area to another, to or
from Account 101, Electric Plant in
Service; Account 104, Electric Plant
Leased to Others; Account 105, Electric
Plant Held for Future Use, and Account 121, Nonutility Property, the
transfer shall be recorded by transferring the original cost thereof from the
one account, department, or location
to the other. Any related amounts carried in the accounts for accumulated
provision for depreciation or amortization shall be transferred in accordance
with the segregation of such accounts.
(m) Common utility plant. (1) If the
utility is engaged in more than one
utility service, such as electric, gas,
and water, and any of its utility plant
is used in common for several utility
services or for other purposes to such
an extent and in such manner that it is
impracticable to segregate it by utility
services currently in the accounts,
such property, with the approval of
RUS, may be designated and classified
as ‘‘common utility plant.’’
(2) The book amount of utility plant
designated as common plant shall be
included in Account 118, Other Utility
Plant, and if applicable in part to the
electric department, shall be segregated and accounted for in subaccounts as electric plant is accounted
for in Accounts 101 to 107, inclusive,
and electric plant adjustments in Account 116, Other Electric Plant Adjustments; any amounts classifiable as
common plant acquisition adjustments
or common plant adjustments shall be
subject to disposition as provided in
Paragraphs C and B of Accounts 114
and 116, respectively, for amounts classified in those accounts. The original
cost of common utility plant in service
shall be classified according to the detailed utility plant accounts appropriate for the property.
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Rural Utilities Service, USDA
§ 1767.17
NOTE: Stations which change electricity
from transmission to distribution voltage
shall be classified as distribution stations.
(3) The utility shall be prepared to
show, at any time, and to report to
RUS annually, or more frequently, if
required, and by utility plant accounts
(301 to 399) the book cost of common
utility plant, the allocation of such
cost to the respective departments
using the common utility plant, and
the basis of the allocation.
(4) The accumulated provision for depreciation and amortization of the utility shall be segregated so as to show
the amount applicable to the property
classified as common utility plant.
(5) The expenses of operation, maintenance, rents, depreciation and amortization of common utility plant shall
be recorded in the accounts prescribed
herein, but designated as common expenses, and the allocation of such expenses to the departments using the
common utility plant shall be supported in such manner as to reflect
readily the basis of allocation used.
(n) Transmission and distribution plant.
For the purpose of this system of accounts:
(1) Transmission system is all land,
conversion structures, and equipment
employed at a primary source of supply
(i.e. generating station, or point of receipt in the case of purchased power) to
change the voltage or frequency of
electricity for the purpose of its more
efficient or convenient transmission;
all land, structures, lines, switching
and conversion stations, high tension
apparatus, and their control and protective equipment between a generating or receiving point and the entrance to a distribution center or
wholesale point; and all lines and
equipment whose primary purpose is to
augment, integrate or tie together the
sources of power supply.
(2) Distribution system is all land,
structures,
conversion
equipment,
lines, line transformers, and other facilities employed between the primary
source of supply (i.e. generating station, or point of receipt in the case of
purchased power) and of delivery to
customers, which are not includible in
transmission system, as defined in
Item in paragraph (n)(1) of this section,
whether or not such land, structures,
and facilities are operated as part of a
transmission system or as part of a distribution system.
(3) Where poles or towers support
both transmission and distribution
conductors, the poles, towers, anchors,
guys, and rights-of-way shall be classified as transmission system. The conductors, cross-arms, braces, grounds,
tiewire, and insulators shall be classified as transmission or distribution facilities, according to the purpose for
which used.
(4) Where underground conduit contains both transmission and distribution conductors, the underground conduit and right-of-way shall be classified as distribution system. The conductors shall be classified as transmission or distribution facilities according to the purpose for which used.
(5) Land (other than rights-of-way)
and structures used jointly for transmission and distribution purposes shall
be classified as transmission or distribution according to the major use
thereof.
(o) Hydraulic production plant. For
purpose of this system of accounts hydraulic production plant is all land and
land rights, structures and improvements used in connection with hydraulic power generation, reservoirs, dams
and waterways, water wheels, turbines,
generators, accessory electric equipment, roads, railroads, and bridges and
structures and improvements used in
connection with fish and wildlife, and
recreation.
(p) Nuclear fuel records required. Each
utility shall keep all the necessary
records to support the entries to the
various nuclear fuel plant accounts
classified under ‘‘Assets and Other Debits,’’ Utility Plant Accounts 120.1
through 120.5, inclusive; Account 518,
Nuclear Fuel Expense; and Account 157,
Nuclear Materials Held for Sale. These
records shall be so kept as to readily
furnish the basis of the computation of
the net nuclear fuel costs.
[58 FR 59825, Nov. 10, 1993, as amended at 73
FR 30281, May 27, 2008]
§ 1767.17 Operating expense instructions.
(a) Supervision and engineering. The
supervision and engineering includible
in the operating expense accounts shall
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7 CFR Ch. XVII (1–1–12 Edition)
consist of the salary, employee pensions and benefits, social security and
other payroll taxes, injuries and damages, and other expenses of superintendents, engineers, clerks, other
employees, and consultants engaged in
supervising and directing the operation
and maintenance of each utility function. Whenever allocations are necessary in order to arrive at the amount
to be included in any account, the
method and basis of allocation shall be
reflected by underlying records.
(1) Labor items:
(i) Special tests to determine efficiency of equipment operation;
(ii) Preparing or reviewing budgets,
estimates, and drawings relating to operation or maintenance for departmental approval;
(iii) Preparing instructions for operations and maintenance activities;
(iv) Reviewing and analyzing operating results;
(v) Establishing organizational setup
of departments and executing changes
therein;
(vi) Formulating and reviewing routines of departments and executing
changes therein;
(vii) General training and instruction
of employees by supervisors whose pay
is chargeable hereto. Specific instructions and training in a particular type
of work is chargeable to the appropriate functional account (See paragraph (c)(19) of this section); and
(viii) Secretarial work for supervisory personnel, but not general clerical and stenographic work chargeable
to other accounts.
(2) Expense items:
(i) Employee pensions and benefits;
(ii) Social security and other payroll
taxes;
(iii) Injuries and damages;
(iv) Consultants’ fees and expenses;
and
(v) Meals, traveling, and incidental
expenses.
(b) Maintenance. (1) The cost of maintenance chargeable to the various operating expense and clearing accounts includes labor, employee pensions and
benefits, social security and other payroll taxes, injuries and damages, materials, overheads, and other expenses incurred in maintenance work. A list of
work operations applicable generally
to utility plant is included in this paragraph (b). Other work operations applicable to specific classes of plant are
listed in functional maintenance expense accounts.
(2) Materials recovered in connection
with the maintenance of property shall
be credited to the same account to
which the maintenance cost was
charged.
(3) If the book cost of any property is
carried in Account 102, Electric Plant
Purchased or Sold, the cost of maintaining such property shall be charged
to the accounts for maintenance of
property of the same class and use, the
book cost of which is carried in other
electric plant in service accounts.
Maintenance of property leased from
others shall be treated as provided in
paragraph (c) of this section.
(4) Items:
(i) Direct field supervision of maintenance;
(ii) Inspecting, testing, and reporting
on condition of plant specifically to determine the need for repairs, replacements, rearrangements, and changes
and inspecting and testing the adequacy of repairs which have been made;
(iii) Work performed specifically for
the purpose of preventing failure, restoring serviceability or maintaining
life of plant;
(iv) Rearranging and changing the location of plant not retired;
(v) Repairing for reuse materials recovered from plant;
(vi) Testing for, locating, and clearing trouble;
(vii) Net cost of installing, maintaining, and removing temporary facilities
to prevent interruptions in service; and
(viii) Replacing or adding minor
items of plant which do not constitute
a retirement unit.
(c) Rents. (1) The rent expense accounts provided under the several functional groups of expense accounts shall
include all rents, including taxes paid
by the lessee on leased property, for
property used in utility operations, except minor amounts paid for occasional
or infrequent use of any property or
equipment and all amounts paid for use
of equipment that, if owned, would be
includible in plant Accounts 391 to 398
inclusive, which shall be treated as an
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Rural Utilities Service, USDA
§ 1767.18
ASSETS AND OTHER DEBITS
expense item and included in the appropriate function account and rents
which are chargeable to clearing accounts, and distributed therefrom to
the appropriate account.
(2) If rents cover property used for
more than one function such as production and transmission, or by more than
one department, the rents shall be apportioned to the appropriate rent expense or clearing accounts of each department on an actual, or if necessary,
an estimated basis.
(3) When a portion of property or
equipment rented from others for use
in connection with utility operations is
subleased, the revenue derived from
such subleasing shall be credited to the
rent revenue account in operating revenues; provided, however, that in case
the rent was charged to a clearing account, amounts received from subleasing the property shall be credited
to such clearing account.
(4) The cost, when incurred by the
lessee, of operating and maintaining
leased property, shall be charged to the
accounts appropriate for the expense if
the property were owned.
(5) The cost incurred by the lessee of
additions and replacements to electric
plant leased from others shall be account for as provided in § 1767.16 (f).
(d) Training costs. (1) When it is necessary that employees be trained to
specifically operate or maintain plant
facilities that are being constructed,
the related costs shall be accounted for
as a current operating and maintenance expense.
(2) These expenses shall be charged to
the appropriate functional accounts
currently as they are incurred.
(3) When the training costs involved
relate to facilities which are not conventional in nature, or are new to the
company’s operations, see § 1767.16
(c)(19), for the accounting.
Utility Plant
101 Electric Plant in Service
101.1 Property Under Capital Leases
102 Electric Plant Purchased or Sold
103 Experimental Electric Plant Unclassified
104 Electric Plant Leased to Others
105 Electric Plant Held for Future Use
106 Completed Construction not Classified—
Electric
107 Construction Work in Progress—Electric
107.1 Construction Work in Progress—Contract
107.2 Construction Work in Progress—Force
Account
107.3 Construction Work in Progress—Special Equipment
108 Accumulated Provision for Depreciation
of Electric Utility Plant
108.1 Accumulated Provision for Depreciation of Steam Production Plant
108.2 Accumulated Provision for Depreciation of Nuclear Production Plant
108.3 Accumulated Provision for Depreciation of Hydraulic Production Plant
108.4 Accumulated Provision for Depreciation of Other Production Plant
108.5 Accumulated Provision for Depreciation of Transmission Plant
108.6 Accumulated Provision for Depreciation of Distribution Plant
108.7 Accumulated Provision for Depreciation of General Plant
108.8 Retirement Work in Progress
108.9 Accumulated Provision for Depreciation of Asset Retirement
109–110 [Reserved]
111 Accumulated Provision for Amortization of Electric Utility Plant
112–113 [Reserved]
114 Electric Plant Acquisition Adjustments
115 Accumulated Provision for Amortization of Electric Plant Acquisition Adjustments
116 Other Electric Plant Adjustments
118 Other Utility Plant
119 Accumulated Provision for Depreciation
and Amortization of Other Utility Plant
120.1 Nuclear Fuel in Process of Refinement, Conversion, Enrichment, and Fabrication
120.2 Nuclear Fuel Materials and Assemblies—Stock Account
120.3 Nuclear Fuel Assemblies in Reactor
120.4 Spent Nuclear Fuel
120.5 Accumulated Provision for Amortization of Nuclear Fuel Assemblies
120.6 Nuclear Fuel Under Capital Leases
[58 FR 59825, Nov. 10, 1993, as amended at 62
FR 42290, Aug. 6, 1997]
§ 1767.18
Assets and other debits.
Other Property and Investments
The asset and other debits accounts
identified in this section shall be used
by all RUS borrowers.
121
122
Nonutility Property
Accumulated Provision for Depreciation
and Amortization of Nonutility Property
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§ 1767.18
7 CFR Ch. XVII (1–1–12 Edition)
123 Investment in Associated Companies
123.1 Patronage Capital from Associated Cooperatives
123.3 Investment in Associated Organizations—Federal Economic Development
Loans
123.4 Investment in Associated Organizations—Non-Federal Economic Development Loans
123.11 Investment in Subsidiary Companies
123.21 Subscriptions to Capital Term Certificates—Supplemental Financing
123.22 Investments in Capital Term Certificates—Supplemental Financing
123.23 Other Investments in Associated Organizations
124 Other Investments
124.1 Other Investments—Federal Economic
Development Loans
124.2 Other Investments—Non-Federal Economic Development Loans
125 Sinking Funds
126 Depreciation Fund
128 Other Special Funds
146
Accounts Receivable from Associated
Companies
151 Fuel Stock
152 Fuel Stock Expenses Undistributed
153 Residuals
154 Plant Materials and Operating Supplies
155 Merchandise
156 Other Materials and Supplies
157 Nuclear Materials Held for Sale
158.1 Allowance Inventory
158.2 Allowances Withheld
163 Stores Expense Undistributed
165 Prepayments
165.1 Prepayments—Insurance
165.2 Other Prepayments
171 Interest and Dividends Receivable
172 Rents Receivable
173 Accrued Utility Revenues
174 Miscellaneous Current and Accrued Assets
175 Derivative Instrument Assets
176 Derivative Instrument Assets—Hedges
Current and Accrued Assets
Deferred Debits
131 Cash
131.1 Cash—General
131.2 Cash—Construction Fund—Trustee
131.3 Cash—Installation Loan and Collection Fund
131.4 Transfer of Cash
131.12 Cash—General—Economic
Development Loan Funds
131.13 Cash—General—Economic
Development Grant Funds
131.14 Cash—General—Economic
Development Non-Federal Revolving Funds
132 Interest Special Deposits
133 Dividend Special Deposits
134 Other Special Deposits
135 Working Funds
136 Temporary Cash Investments
141 Notes Receivable
141.1 Accumulated
Provision
for
Uncollectible Notes—Credit
142 Customer Accounts Receivable
142.1 Customer Accounts Receivable—Electric
142.2 Customer Accounts Receivable—Other
143 Other Accounts Receivable
144 Accumulated
Provision
for
Uncollectible Accounts—Credit
144.1 Accumulated
Provision
for
Uncollectible Customer Accounts—Credit
144.2 Accumulated
Provision
for
Uncollectible Merchandising Accounts—
Credit
144.3 Accumulated
Provision
for
Uncollectible Accounts, Officers and Employees—Credit
144.4 Accumulated Provision for Other
Uncollectible Accounts—Credit 145 Notes
Receivable from Associated Companies
145 Notes Receivable from Associated Companies
181 Unamortized Debt Expense
182.1 Extraordinary Property Losses
182.2 Unrecovered Plant and Regulatory
Study Costs
182.3 Other Regulatory Assets
183 Preliminary Survey and Investigation
Charges
184 Clearing Accounts
184.1 Transportation Expense—Clearing
184.2 Clearing Accounts—Other
185 Temporary Facilities
186 Miscellaneous Deferred Debits
187 Deferred Losses from Disposition of
Utility Plant
188 Research, Development, and Demonstration Expenditures
189 Unamortized Loss on Reacquired Debt
190 Accumulated Deferred Income Taxes
ASSETS AND OTHER DEBITS
Utility Plant
101
Electric Plant in Service
A. This account shall include the original
cost of electric plant, included in Accounts
301 to 399, prescribed herein, owned and used
by the utility in its electric utility operations, 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.
B. (See also Account 106 for unclassified
construction costs of completed plant actually in service.)
C. The cost of additions to and betterments
of property leased from others, which are includible in this account, shall be recorded in
subdivisions separate and distinct from those
relating to owned property. (See § 1767.16 (f).)
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Rural Utilities Service, USDA
101.1
§ 1767.18
Property Under Capital Leases
ever, when projects are transferred to Account 101, Electric Plant in Service, a new
depreciation rate based upon the remaining
service life and undepreciated amounts, will
be established.
D. Records shall be maintained with respect to each unit of experiment so that full
details may be obtained as to the cost, depreciation, and the experimental status.
E. Should it be determined that experimental plant recorded in this account will
fail to satisfactorily perform its function,
the costs thereof shall be accounted for as directed or authorized by RUS.
A. This account shall include the amount
recorded under capital leases for plant leased
from others and used by the utility in its
utility operations.
B. The electric property included in this
account shall be classified separately according to the detailed accounts (301 to 399) prescribed for electric plant in service.
C. Records shall be maintained with respect to each capital lease reflection:
(1) Name of lessor, (2) basic details of lease,
(3) terminal date, (4) original cost or fair
market value of property leased, (5) future
minimum lease payments, (6) executory
costs, (7) present value of minimum lease
payments, (8) the amount representing interest and the interest rate used, and (9) expenses paid. Records shall also be maintained for plant under a lease, to identify the
asset retirement obligation and cost originally recognized for each lease and the periodic charges and credits made to the asset
retirement obligations and asset retirement
costs.
102
104
Electric Plant Purchased or Sold
A. This account shall be charged with the
cost of electric 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 § 1767.16 (e).
B. Within 6 months from the date of acquisition or sale of property recorded herein,
the borrower shall file with RUS the proposed journal entries to clear from this account the amounts recorded herein.
103
Electric Plant Leased to Others
A. This account shall include the original
cost of electric 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 (301 to 399) prescribed for electric
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.
105
Electric Plant Held for Future Use
A. This account shall include the original
cost of electric plant (except land and land
rights) owned and held for future use in electric service under a definite plan for such
use, to include: (1) Property acquired (except
land and land rights) but never used by the
utility in electric service, but held for such
service in the future under a definite plan,
and (2) property (except land and land rights)
previously used by the utility in service but
retired from such service and held pending
its reuse in the future, under a definite plan,
in electric service.
B. This account shall also include the
original cost of land and land rights owned
and held for future use in electric service
under a plan for such use, to include land
and land rights: (1) Acquired but never used
by the utility in electric service, but held for
such service in the future under a plan, and
(2) previously held by the utility in service,
but retired from such service and held pending its reuse in the future under a plan, in
electric service. (See § 1767.16 (g).)
C. In the event that property recorded in
this account shall no longer be needed or appropriate for future utility operations, the
borrower shall notify RUS of such condition
and request approval of journal entries to remove such property from this account.
D. 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 be recorded directly in Accounts 411.6 or 411.7, as
appropriate, except when determined to be
Experimental Electric Plant
Unclassified
A. This account shall include the cost of
electric plant which was constructed as a research, development, and demonstration
plant under the provisions of Paragraph C,
Account
107,
Construction
Work
in
Progress—Electric, and due to the nature of
the plant, it is desirous to operate it for a period of time in an experimental status.
B. Amounts in this account shall be transferred to Account 101, Electric Plant in Service, or Account 121, Nonutility Property, as
appropriate when the project is no longer
considered as experimental.
C. The depreciation on property in this account shall be charged to Account 403.8, Depreciation Expense, for asset retirement
costs, as appropriate, and credited to Account 108, Accumulated Provision for Depreciation of Electric Utility Plant. The
amounts herein shall be depreciated over a
period which would correspond to the estimated useful life of the relevant project considering the characteristics involved. How-
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§ 1767.18
7 CFR Ch. XVII (1–1–12 Edition)
significant by RUS. Upon such a determination, the amounts shall be transferred to Account 256, Deferred Gains from Disposition of
Utility Plant, or Account 187, Deferred
Losses from Disposition of Utility Plant, and
amortized to Account 411.6, Gains from Disposition of Utility Plant, or Account 411.7,
Losses from Disposition of Utility Plant, as
appropriate.
E. The property included in this account
shall be classified according to the detail accounts (301 to 399) prescribed for electric
plant in service and the account shall be
maintained in such detail as though the
property were in service.
project along with complete detail of the nature and purpose of the research, development, and demonstration project together
with the related costs.
D. Account 107 shall be subaccounted as
follows:
107.1 Construction Work in Progress—Contract
107.2 Construction Work in Progress—Force
Account
107.3 Construction Work in Progress—Special Equipment
NOTE: Materials and supplies, meters and
transformers held in reserve, and normal
spare capacity of plant in service shall not
be included in this account.
A. This account shall be credited with the
following:
1. Amounts charged to Account 403, Depreciation Expense, or to clearing accounts for
current depreciation expense for electric
plant in service.
2. Amounts charged to Account 421, Miscellaneous Nonoperating Income, for depreciation expense on property included in Account 105, Electric Plant Held for Future
Use. Include, also, the balance of accumulated provision for depreciation on property
when transferred to Account 105, Electric
Plant Held for Future Use, from other property accounts. Normally, Account 108 will
not be used for current depreciation provision because, as provided herein, the service
life during which depreciation is computed
commences with the date property is includible in electric plant in service; however, if
special circumstances indicate the propriety
of current accruals for depreciation, such
charges shall be made to Account 421, Miscellaneous Nonoperating Income.
3. Amounts charged to Account 413, Expenses of Electric Plant Leased to Others,
for electric plant included in Account 104,
Electric Plant Leased to Others.
4. Amounts charged to Account 416, Costs
and Expenses of Merchandising, Jobbing, and
Contract Work, or to clearing accounts for
current depreciation expense.
5. Amounts of depreciation applicable to
electric properties acquired as operating
units or systems. (See § 1767.16 (e).)
6. Amounts charged to Account 182.1, Extraordinary Property Losses, when authorized by RUS.
7. Amounts of depreciation applicable to
electric plant donated to the utility.
The utility shall maintain separate subaccounts for depreciation applicable to electric plant in service, electric plant leased to
others, and electric plant held for future
use.)
B. At the time of retirement of depreciable
electric 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.
106
108
Completed Construction not Classified—
Electric
At the end of the year or such other date
as a balance sheet may be required by RUS,
this account shall include the total of the
balances of work orders for electric plant
which has been completed and placed in service but which work orders have not been
classified for transfer to the detailed electric
plant accounts.
NOTE: For the purpose of reporting to RUS,
the classification of electric plant in service
by accounts is required, the utility shall also
report the balance in this account tentatively classified as accurately as practicable according to prescribed account classifications. The purpose of this provision is
to avoid any significant omissions in reported amounts of electric plant in service.
107
Construction Work in Progress—
Electric
A. This account shall include the total of
the balances of work orders for electric plant
in process of construction.
B. Work orders shall be cleared from this
account as soon as practicable, after completion of the job. Further, if a project, such as
a hydroelectric project, a steam station, or a
transmission line, is designed to consist of
two or more units or circuits which may be
placed in service at different dates, any expenditures which are common to and which
will be used in the operation of the project as
a whole shall be included in electric plant in
service upon the completion and the readiness for service of the first unit. Any expenditures which are identified exclusively with
units of property not yet in service shall be
included in this account.
C. Expenditures on research, development,
and demonstration projects for construction
of utility facilities are to be included in a
separate subdivision in this account. Records
must be maintained to show separately each
Accumulated Provision for Depreciation
of Electric Utility Plant
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Rural Utilities Service, USDA
§ 1767.18
When retirement, costs of removal and salvage are entered originally in retirement
work orders, the net total of such work orders may be included in a separate subaccount hereunder. Upon completion of the
work order, the proper distribution to subdivisions of this account shall be made as
provided in the following paragraph.
C. Account 108 shall be subaccounted as
follows:
108.1 Accumulated Provision for Depreciation of Steam Production Plant
108.2 Accumulated Provision for Depreciation of Nuclear Production Plant
108.3 Accumulated Provision for Depreciation of Hydraulic Production Plant
108.4 Accumulated Provision for Depreciation of Other Production Plant
108.5 Accumulated Provision for Depreciation of Transmission Plant
108.6 Accumulated Provision for Depreciation of Distribution Plant
108.7 Accumulated Provision for Depreciation of General Plant
108.8 Retirement Work in Progress
108.9 Accumulated Provision for Depreciation of Asset Retirement Costs
These subsidiary records shall reflect the
current credits and debits to this account in
sufficient detail to show separately for each
such functional classification: (1) the
amount of accrual for depreciation, (2) the
book cost of property retired, (3) cost of removal, (4) salvage, and (5) other items, including recoveries from insurance.
D. When transfers of plant are made from
one electric plant account to another, or
from or to another utility department, of
from or to nonutility property accounts, the
accounting for depreciation shall be as provided in § 1767.16 (l).
E. The utility is restricted in its use of the
accumulated provision for depreciation to
the purposes set forth above. It shall not
transfer any portion of this account to retained earnings or make any other use thereof without authorization by RUS.
counts. See also Paragraph A(2), Account
108, Accumulated Provision for Depreciation
of Electric Utility Plant.
3. Amounts charged to Account 405, Amortization of Other Electric Plant.
4. Amounts charged to Account 413, Expenses of Electric Plant Leased to Others,
for the current amortization of limited-term
or other investments subject to amortization
included in Account 104, Electric Plant
Leased to Others.
5. Amounts charged to Account 425, Miscellaneous Amortization, for the amortization of intangible or other electric plant
which does not have a definite or terminable
life and is not subject to charges for depreciation expense, with RUS approval.
(The utility shall maintain subaccounts of
this account for the amortization applicable
to electric plant in service, electric plant
leased to others and electric plant held for
future use.)
B. When any property to which this account applies is sold, relinquished, or otherwise retired from service, this account shall
be charged with the amount previously credited in respect to such property. The book
cost of the property so retired less the
amount chargeable to this account and less
the net proceeds realized at retirement shall
be included in Account 421.1, Gain on Disposition of Property, or Account 421.2, Loss
on Disposition of Property, as appropriate.
C. For general ledger and balance sheet
purposes, this account shall be regarded and
treated as a single composite provision for
amortization. For purposes of analysis, however, each utility shall maintain subsidiary
records in which this account is segregated
according to the following functional classification for electric plant: (1) Steam production, (2) Nuclear production, (3) Hydraulic
production, (4) Other production, (5) Transmission, (6) Distribution, and (7) General.
These subsidiary records shall reflect the
current credits and debits to this account in
sufficient detail to show separately for each
such functional classification: (1) the
amount of accrual for 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
accumulated provision for amortization to
the purposes set forth above. It shall not
transfer any portion of this account to retained earnings or make any other use thereof without authorization by RUS.
109–110 [Reserved]
111 Accumulated Provision for
Amortization of Electric Utility Plant
A. This account shall be credited with the
following:
1. Amounts charged to Account 404, Amortization of Limited-Term Electric Plant, for
the current amortization of limited-term
electric plant investments.
2. Amounts charged to Account 421, Miscellaneous Nonoperating Income, for amortization expense on property included in Account 105, Electric Plant Held for Future
Use. Include also the balance of accumulated
provision for amortization on property when
transferred to Account 105, Electric Plant
Held for Future Use, from other property ac-
112–113 [Reserved]
114
Electric Plant Acquisition Adjustments
A. This account shall include the difference between the cost to the accounting
utility of electric plant acquired as an operating unit or system by purchase, merger,
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§ 1767.18
7 CFR Ch. XVII (1–1–12 Edition)
consolidation, liquidation, or otherwise, and
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 accumulated provisions for depreciation and amortization and
contributions in aid of construction with respect to such property.
B. With respect to acquisitions after the effective date of this system of accounts, this
account shall be subdivided so as to show the
amounts included herein for each property
acquisition and to electric plant in service,
electric plant held for future use, and electric plant leased to others. (See § 1767.16 (e).)
C. Debit amounts recorded in this account
related to plant and land acquisition may be
amortized to Account 425, Miscellaneous Amortization, over a period not longer than the
estimated remaining life of the properties to
which such amounts relate. Amounts related
to the acquisition of land only may be amortized to Account 425 over a period of not
more than 15 years. Should a utility wish to
account for debit amounts in this account in
any other manner, it shall petition RUS for
authority to do so. Credit amounts recorded
in this account shall be accounted for as directed by RUS.
119 Accumulated Provision for Depreciation
and Amortization of Other Utility Plant
This account shall include the accumulated provision for depreciation and amortization applicable to utility property other
than electric plant.
120.1 Nuclear Fuel in Process of Refinement, Conversion, Enrichment, and Fabrication
A. This account shall include the original
cost to the utility of nuclear fuel materials
while in process of refinement, conversion,
enrichment, and fabrication into nuclear
fuel assemblies and components, including
processing, fabrication, and necessary shipping costs. This account shall also include
the salvage value of nuclear materials which
are actually being reprocessed for use and
were transferred from Account 120.5, Accumulated Provision for Amortization of Nuclear Fuel Assemblies. (See § 1767.10 (a)(27).)
B. This account shall be credited and Account 120.2, Nuclear Fuel Materials and Assemblies—Stock Account, shall be debited
for the cost of completed fuel assemblies delivered for use in refueling or to be held as
spares. In the case of the initial core loading,
the transfer shall be made directly to Account 120.3, Nuclear Fuel Assemblies in Reactor, upon the conclusion of the experimental or test period of the plant prior to its
becoming available for service.
115 Accumulated Provision for Amortization of Electric Plant Acquisition Adjustments
This account shall be credited or debited
with amounts which are includible in Account 406, Amortization of Electric Plant Acquisition Adjustments, or Account 425, Miscellaneous Amortization, for the purpose of
providing for the extinguishment of amounts
in Account 114, Electric Plant Acquisition
Adjustments, in instances where the amortization of Account 114 is not being made by
direct write-off of the account.
116
Items
1. Cost of natural uranium, uranium ores
concentrates or other nuclear fuel sources,
such as thorium, plutonium, and U–233.
2. Value of recovered nuclear materials
being reprocessed for use.
3. Milling process costs.
4. Sampling and weighing, and assaying
costs.
5. Purification and conversion process
costs.
6. Costs of enrichment by gaseous diffusion
or other methods.
7. Costs of fabrication into fuel forms suitable for insertion in the reactor.
8. All shipping costs of materials and components, including shipping of fabricated fuel
assemblies to the reactor site.
9. Use charges on leased nuclear materials
while in process of refinement, conversion,
enrichment, and fabrication.
Other Electric Plant Adjustments
A. This account shall include the difference between the original cost, estimated
if not known, and the book cost of electric
plant to the extent that such difference is
not properly includible in Account 114, Electric Plant Acquisition Adjustments. (See
§ 1767.16 (a)(3))
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 RUS may approve or direct.
120.2 Nuclear Fuel Materials and
Assemblies—Stock Account
NOTE: The provisions of this account shall
not be construed as approving or authorizing
the recording of appreciation of electric
plant.
118
A. This account shall be debited and Account 120.1, Nuclear Fuel in Process of Refinement, Conversion, Enrichment and Fabrication, shall be credited with the cost of
fabricated fuel assemblies delivered for use
in refueling or to be carried in stock as
spares. It shall also include the original cost
of fabricated fuel assemblies purchased in
Other Utility Plant
This account shall include the balances in
accounts for utility plant, other than electric plant, such as gas, or railway.
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Rural Utilities Service, USDA
§ 1767.18
completed form. This account shall also include the original cost of partially irradiated
fuel assemblies being held in stock for reinsertion in a reactor which had been transferred from Account 120.3, Nuclear Fuel Assemblies in Reactor.
B. When fuel assemblies included in this
account are inserted in a reactor, this account shall be credited and Account 120.3,
Nuclear Fuel Assemblies in Reactor, debited
for the cost of such assemblies.
C. This account shall also include the cost
of nuclear materials and byproduct materials being held for future use and not actually in process in Account 120.1, Nuclear Fuel
in Process of Refinement, Conversion, Enrichment and Fabrication.
120.3
posed. Account 120.1, Nuclear Fuel in Process
of Refinement, Conversion, Enrichment and
Fabrication, shall be debited with the net
salvage value of nuclear materials to be reprocessed. Account 157, Nuclear Materials
Held for Sale, shall be debited for the net salvage value of nuclear materials not to be reprocessed but to be sold or otherwise disposed of and Account 120.2, Nuclear Fuel Materials and Assemblies—Stock Account, will
be debited with the net salvage value of nuclear materials that will be held for future
use and not actually in process, in Account
120.1, Nuclear Fuel in Process of Refinement,
Conversion, Enrichment, and Fabrication.
C. This account shall be debited and Account 120.4, Spent Nuclear Fuel, shall be
credited with the cost of fuel assemblies at
the end of the cooling period.
Nuclear Fuel Assemblies in Reactor
A. This account shall include the cost of
nuclear fuel assemblies when inserted in a
reactor for the production of electricity. The
amounts included herein shall be transferred
from Account 120.2, Nuclear Fuel Materials
and Assemblies—Stock Account, except for
the initial core loading which will be transferred directly from Account 120.1, Nuclear
Fuel in Process of Refinement, Conversion,
Enrichment and Fabrication.
B. Upon removal of fuel assemblies from a
reactor, the original cost of the assemblies
removed shall be transferred to Account
120.4, Spent Nuclear Fuel, or Account 120.2,
Nuclear Fuel Materials and Assemblies—
Stock Account, as appropriate.
120.4
120.6
Nuclear Fuel Under Capital Leases
A. This account shall include the amount
recorded under capital leases for nuclear fuel
leased from others for use by the utility in
its utility operations.
B. Records shall be maintained with respect to each capital lease reflecting: (1)
name of lessor, (2) basic details of lease, (3)
terminal date, (4) original cost or fair market value of nuclear fuel leased, (5) future
minimum lease payments, (6) the amount
representing interest and the interest rate
used, and (7) expenses paid.
Other Property and Investments
Spent Nuclear Fuel
121
A. This account shall include the original
cost of nuclear fuel assemblies, in the process of cooling, transferred from Account
120.3, Nuclear Fuel Assemblies in Reactor,
upon removal from a reactor pending reprocessing.
B. This account shall be credited and Account 120.5, Accumulated Provision for Amortization of Nuclear Fuel Assemblies, debited for fuel assemblies, after the cooling period is over, at the cost recorded in this account.
Nonutility Property
A. This account shall include the book cost
of land, structure, and equipment or other
tangible or intangible property owned by the
utility, but used in utility service and not
properly includible in Account 105, Electric
Plant Held for Future Use. This account
shall also include, where applicable, amounts
recorded for asset retirement costs associated with nonutility plant.
B. This account shall also include the
amount recorded under capital leases for
property leased from others and used by the
utility in its nonutility operations. Records
shall be maintained with respect to each
lease reflecting: (1) name of lessor, (2) basic
details of lease, (3) terminal date, (4) original
cost or fair market value of property leased,
(5) future minimum lease payments, (6) executory costs, (7) present value of minimum
lessee payments, (8) the amount representing
interest and the interest rate used, and (9)
expenses paid.
C. 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 an ice department where such activity is
not classed as a utility) and the amount of
120.5 Accumulated Provision for
Amortization of Nuclear Fuel Assemblies
A. This account shall be credited and Account 518, Nuclear Fuel Expense, shall be
debited for the amortization of the net cost
of nuclear fuel assemblies used in the production of energy. The net cost of nuclear
fuel assemblies subject to amortization shall
be the original cost of nuclear fuel assemblies, plus or less the expected net salvage
value of uranium, plutonium, and other byproducts.
B. This account shall be credited with the
net salvage value of uranium, plutonium,
and other nuclear by-products when such
items are sold, transferred or otherwise dis-
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§ 1767.18
7 CFR Ch. XVII (1–1–12 Edition)
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.
amount of the adjustment shall be charged
to Account 426.5, Other Deductions, or to an
appropriate account for accumulated provisions for loss in value established as a separate subdivision of this account.
NOTE: The gain from the sale or other disposition of property included in this account
which had been previously recorded in Account 105, Electric Plant Held for Future
Use, shall be accounted for in accordance
with Paragraph C of Account 105.
C. Account 123 shall be subaccounted as
follows:
123.1 Patronage Capital from Associated Cooperatives
123.3 Investment in Associated Organizations—Federal Economic Development
Loans
123.4 Investment in Associated Organizations—Non-Federal Economic Development Loans
123.11 Investment in Subsidiary Companies
123.21 Subscriptions to Capital Term Certificates—Supplemental Financing
123.22 Investment in Capital Term Certificates—Supplemental Financing
123.23 Other Investments in Associated Organizations
122 Accumulated Provision for Depreciation
and Amortization of Nonutility Property
This account shall include the accumulated provision for depreciation and amortization applicable to nonutility property.
123
Investment in Associated Companies
A. This account shall include the book cost
of investments in securities issued or assumed by associated companies and investment advances to such companies, including
interest accrued thereon when such interest
is not subject to current settlement, provided that the investment does not relate to
a subsidiary company. (If the investment relates to a subsidiary company, it shall be included in Account 123.11, Investment in Subsidiary Companies.) Include herein the offsetting entry to the recording of amortization of discount or premium on interest
bearing investments. (See Account 419, Interest and Dividend Income.)
B. This account shall be maintained in
such manner as to show the investment in
securities of, and advances to, each associated company together with full particulars
regarding any of such investments that are
pledged.
123.1
Patronage Capital from Associated
Cooperatives
This account shall include patronage capital credits allocated to the accounting borrower by G&T cooperatives. It shall also include capital credits, deferred patronage refunds, or like items from other associated
cooperatives. The account shall be maintained so as to reflect separately, the allocations of patronage capital and patronage refunds from each organization that makes
such allocations to the borrower.
123.3 Investment in Associated Organizations—Federal
Economic
Development
Loans
This account shall include investment advances of Federal funds received from a
Rural Economic Development Grant to associated organizations for authorized rural
economic development projects.
NOTE A: Securities and advances of associated companies owned and pledged shall be
included in this account, but such securities,
if held in special deposits or in special funds,
shall be included in the appropriate deposit
or fund account. A complete record of securities pledged shall be maintained.
NOTE B: Securities of associated companies
held as temporary cash investments are includible in Account 136, Temporary Cash Investments.
NOTE C: Balances in open accounts with associated companies, which are subject to
current settlement, are includible in Account 146, Accounts Receivable from Associated Companies.
NOTE D: The utility may write down the
cost of any security in recognition of a decline in the value thereof. Securities shall be
written off or written down to a nominal
value if there is no reasonable prospect of
substantial value. Fluctuations in market
value shall not be recorded but a permanent
impairment in the value of securities shall
be recognized in the accounts. When securities are written off or written down, the
123.4 Investment in Associated Organizations—Non-Federal Economic Development Loans
This account shall include investment advances of non-Federal funds from the Rural
Economic Development Grant revolving fund
to associated organizations for authorized
rural economic development projects.
123.11
Investment in Subsidiary Companies
A. This account shall include the cost of
investments in securities issued or assumed
by subsidiary companies and investment advances to such companies, including interest
accrued thereon when such interest is not
subject to current settlement, plus the equity in undistributed earnings or losses of
such subsidiary companies since acquisition.
This account shall be credited with any dividends declared by such subsidiaries.
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Rural Utilities Service, USDA
§ 1767.18
B. This account shall be maintained in
such a manner as to show separately for each
subsidiary: the cost of such investments in
the securities of the subsidiary at the time
of acquisition; the amount of equity in the
subsidiary’s undistributed net earnings or
net losses since acquisition; advances or
loans to such subsidiary; and full particulars
regarding any such investments that are
pledged.
C. Account 124 shall be subaccounted as
follows:
124.1 Other Investments—Federal Economic
Development Loans
124.2 Other Investments—Non-Federal Economic Development Loans
NOTE A: Securities owned and pledged shall
be included in this account, but securities
held in special deposits or in special funds
shall be included in appropriate deposit or
fund accounts. A complete record of securities pledged shall be maintained.
NOTE B: Securities held as temporary cash
investments shall not be included in this account.
NOTE C: See Note D of Account 123.
123.21 Subscriptions to Capital Term
Certificates—Supplemental Financing
This account shall include the total subscriptions to capital term certificates of
CFC. When subscriptions are paid, this account shall be credited and Account 123.22,
Investments in Capital Term Certificates—
Supplemental Financing, debited.
124.1
123.22 Investments in Capital Term
Certificates—Supplemental Financing
This account shall include investment advances of Federal funds received from a
Rural Economic Development Grant to nonassociated organizations for authorized rural
economic development projects.
This account shall include paid subscriptions in capital term certificates of CFC or
other supplemental lenders.
123.23
124.2
Other Investments in Associated
Organizations
Other Investments—Non-Federal
Economic Development Loans
This account shall include investment advances of non-Federal funds from the Rural
Economic Development Grant revolving fund
to nonassociated organizations for authorized rural economic development projects.
This account shall include investments in
capital stock, securities, membership fees,
and investment advances to associated organizations other than provided for elsewhere.
This account shall be maintained in such a
manner as to show the investment in stock
and securities of and advances to each associated organization.
125
Sinking Funds
This account shall include the amount of
cash and book cost of investments held in
sinking funds. This account shall also include unrealized holding gains and losses on
trading and available-for-sale types of investments. A separate account, with appropriate title, shall be kept for each sinking
fund. Transfers from this account to special
deposit accounts, may be as necessary for
the purpose of paying matured sinking fund
obligations, or obligations called for redemption but not presented, or the interest thereon.
Items
1. Investments in capital stock of associated organizations.
2. Investments in securities issued by associated organizations.
3. Membership fees in associated organizations, including NRECA, and Statewide associations of RUS-financed borrowers.
4. Investment advances to associated organizations.
124
Other Investments—Federal Economic
Development Loans
Other Investments
126
A. This account shall include the book cost
of investments in securities issued or assumed by nonassociated companies, investment advances to such companies, and any
investments not accounted for elsewhere.
This account shall also included unrealized
holding gains and losses on trading and
available-for-sale types of security investments. 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.
Depreciation Fund
This account shall include the amount of
cash and the book cost of investments which
have been segregated in a special fund for
the purpose of identifying such assets with
the accumulated provisions for depreciation.
This account shall also include unrealized
holding gains and losses on trading and
available-for-sale types of security investments.
128
Other Special Funds
This account shall include the amount of
cash and book cost of investments which
have been segregated in special funds for insurance, employee pensions, savings, relief,
hospital, and other purposes not provided for
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§ 1767.18
7 CFR Ch. XVII (1–1–12 Edition)
elsewhere. This account shall also include
unrealized holding gains and losses on trading and available-for-sale types of security
investments. A separate account, with appropriate title, shall be kept for each fund.
charged to this account and credited to Account 224.4, RUS Notes Executed—Construction—Debit. CFC and other supplemental
lender construction loan fund advances shall
be charged to this account and credited to
Account 224.13, Supplemental Financing
Notes Executed—Debit.
NOTE: Amounts deposited with a trustee
under the terms of an irrevocable trust
agreement for pensions or other employee
benefits shall not be included in this account.
131.3
A. This account shall include the cash advanced on installation loans made subsequent to September 13, 1957. Such advances
shall be debited to this account as received
and credited to Account 224.10, RUS Notes
Executed—Installation—Debit. This account
shall also include interest and principal collections received on consumers’ loans financed from RUS loans made subsequent to
September 13, 1957.
B. Payments shall be made from this account solely for financing consumers’ loans
for the purpose of wiring of consumers’
premises, and the acquisition and installation of electrical and plumbing appliances
and equipment by consumers. The cash in
this account is also used for the payment of
principal and interest on installation loans
made by RUS, subsequent to September 13,
1957, in accordance with the terms of the
loan agreement.
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 category of accounts designated as
current and accrued assets any item, the
amount or collectibility of which is not reasonably assured, unless an adequate provision for possible loss has been made therefor.
Items of current character but of doubtful
value may be written down, and for record
purposes carried in these accounts at nominal value.
131
Cash
131.4
A. This account shall include the amount
of current cash funds except working funds.
B. Account 131 shall be subaccounted as
follows:
131.12
Cash—General—Economic
Development Funds
This account shall include the cash received from the Rural Utilities Service for
Rural Economic Development Loans. Economic development loan advances shall be
charged to this account and credited to Account 224.17, RUS Notes Executed—Economic
Development—Debit.
Cash—General
This account shall include all cash of the
organization not provided for elsewhere. Separate subaccounts may be maintained for
each bank account in which general cash is
maintained. Funds held by others for current
obligations shall be recorded in Account 134,
Other Special Deposits.
131.2
Transfer of Cash
This account shall be used in transferring
funds from one bank account to another.
This account is charged when the check is
drawn for the transfer and entered in the
check register, and credited when the
amount transferred is entered in the cash receipts book. This account is to be used as a
clearing account and should not have a balance at the end of an accounting period.
131.1 Cash—General
131.2 Cash—Construction Fund—Trustee
131.3 Cash—Installation Loan and Collection Fund
131.4 Transfer of Cash
131.12 Cash—General—Economic
Development Loan Funds
131.13 Cash—General—Economic
Development Grant Funds
131.14 Cash—General—Economic
Development Non-Federal Revolving Funds
131.1
Cash—Installation Loan and
Collection Fund
131.13 Cash—General—Economic
Development Grant Funds
This account shall include cash received
from the Rural Utilities Service for Rural
Economic Development Grants. Economic
development grant funds shall be charged to
this account and credited to Account 224.18,
Other Long-Term Debt—Grant Funds; Account 208, Donated Capital; or Account 421,
Miscellaneous Nonoperating Income, as appropriate. This account shall be credited and
Cash—Construction Fund—Trustee
This account shall include the cash received from the Rural Utilities Service, CFC,
and any other source of supplemental financing for financing the construction, purchase,
and operation of electric facilities. RUS construction loan fund advances shall be
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Rural Utilities Service, USDA
§ 1767.18
136
either Account 123.3, Investment in Associated Organizations—Federal Economic Development Loans, or Account 124.1, Other Investments—Federal Economic Development
Loans, shall be debited, as appropriate, with
the amount of an economic development revolving fund loan.
131.14 Cash—General—Economic
Development Non-Federal Revolving Funds
This account shall include all non-Federal
funds comprising the economic development
revolving fund. It shall include all funds supplied by the borrower as well as all cash received from the repayment of loans made
from the economic development revolving
fund. This account shall be credited and either Account 123.4, Investment in Associated
Organizations—Non-Federal Economic Development Loans, or Account 124.2, Other Investments—Non-Federal Economic Development Loans, shall be debited, as appropriate,
with the amount of an economic development revolving fund loan.
132
141
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 the financial statements of any contingent liability arising
from such transactions.
Interest Special Deposits
Dividend Special Deposits
This account shall include special deposits
with fiscal agents or others for the payment
of dividends.
134
B. Account 141 shall be subaccounted as
follows:
141.1 Accumulated
Provision
Uncollectible Notes—Credit
Other Special Deposits
This account shall include deposits with
fiscal agents or others for special purposes
other than the payment of interest and dividends. Such special deposits may include
cash deposited with Federal, state, or municipal authorities as a guaranty for the fulfillment of obligations; cash deposited with
trustees to be held until mortgaged property
sold, destroyed, or otherwise disposed of is
replaced; and cash realized from the sale of
the accounting utility’s securities and deposited with trustees to be held until invested
in property of the utility. Entries to this account shall specify the purpose for which the
deposit is made.
This account shall be credited with
amounts provided for losses on notes receivable which may become uncollectible, and
also with collections on notes previously
charged hereto. Concurrent charges shall be
made to Account 904, Uncollectible Accounts.
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 permit ready segregation of the amounts
due for merchandising, jobbing, and contract
work.
C. Account 142 shall be subaccounted as
follows:
Working Funds
142.1 Customer Accounts Receivable—Electric
142.2 Customer Accounts Receivable—Other
This account shall include cash advanced
to officers, agents, employees, and others as
petty cash or working funds.
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141.1 Accumulated Provision for
Uncollectible Notes—Credit
NOTE: Assets available for general corporate purposes shall not be included in this
account. Further, deposits for more than one
year, which are not offset by current liabilities, shall not be charged to this account
but to Account 128, Other Special Funds.
135
Notes Receivable
A. 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, except, however, notes receivable from associated companies. (See Account 136, Temporary Cash
Investments, and Account 145, Notes Receivable from Associated Companies.)
This account shall include special deposits
with fiscal agents or others for the payment
of interest.
133
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.
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§ 1767.18
142.1
7 CFR Ch. XVII (1–1–12 Edition)
Customer Accounts Receivable—
Electric
144.2 Accumulated
Provision
for
Uncollectible Merchandising Accounts—
Credit
This account shall include amounts due
from customers for utility service.
142.2
This account shall be credited with
amounts provided for losses on merchandising, jobbing, and contract work which
may become uncollectible, and also with collections on accounts previously charged
hereto. Concurrent charges shall be made to
Account 904, Uncollectible Accounts, for
amounts applicable to utility operations,
and to corresponding accounts for other operations.
Customer Accounts Receivable—Other
This account shall include amounts due
from customers 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 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. The account shall not include
amounts advanced to officers or others as
working funds. (See Account 135, Working
Funds.)
144.3 Accumulated
Provision
for
Uncollectible Accounts, Officers and Employees—Credit
This account shall be credited with
amounts provided for losses on accounts receivable from officers and employees which
may become uncollectible and also with collections on accounts previously charged
hereto. Concurrent charges shall be made to
Account 904, Uncollectible Accounts.
144 Accumulated Provision for
Uncollectible Accounts—Credit
144.4 Accumulated Provision for Other
Uncollectible Accounts—Credit
A. This account shall include 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 904, 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.
B. Account 144 shall be subaccounted as
follows:
This account shall be credited with
amounts provided for losses on accounts receivable which may become uncollectible
and for which the recording of this credit has
not been provided for elsewhere. This account shall also be credited with collections
on accounts previously charged hereto. Concurrent charges shall be made to Account
904, Uncollectible Accounts, for amounts applicable to utility operations and to corresponding accounts for other operations.
145
144.1 Accumulated
Provision
for
Uncollectible Customer Accounts—Credit
144.2 Accumulated
Provision
for
Uncollectible Merchandising Accounts—
Credit
144.3 Accumulated
Provision
for
Uncollectible Accounts, Officers and Employees—Credit
144.4 Accumulated Provision for Other
Uncollectible Accounts—Credit
Notes Receivable from Associated
Companies
This account shall include notes upon
which associated companies are liable, and
which mature and are expected to be paid in
full not later than one year from the 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 specified
due date but which have been carried for
more than twelve months and items which
are not paid within twelve months from due
date shall be transferred to Account 123, Investment in Associated Companies.
144.1 Accumulated Provision for
Uncollectible Customer Accounts—Credit
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 904, Uncollectible
Accounts.
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 the financial statements of any contingent liability arising
from such transactions.
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146
§ 1767.18
Accounts Receivable from Associated
Companies
4. Moving of fuel in storage and transferring from one station to another.
5. Handling from storage or shipping facility to first bunker, hopper, bucket, tank, or
holder of boiler house structure.
6. Operation of mechanical equipment such
as locomotives, trucks, cars, boats, barges,
and cranes.
Supplies and Expenses:
1. Tools, lubricants and other supplies.
2. Operating supplies for mechanical equipment.
3. Transportation and other expenses in
moving fuel.
4. Stores expenses applicable to fuel.
This account shall include drafts upon
which associated companies are liable, and
which mature and are expected to be paid in
full not later than one year from the 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 specified
due date but which have been carried for
more than twelve months and items which
are not paid within twelve months from due
date shall be transferred to Account 123, Investment in Associated Companies.
NOTE: On the balance sheet, accounts receivable from an associated company may be
offset against accounts payable to the same
company.
151
153
Fuel Stock
This account shall include the book cost of
fuel on hand.
154
Plant Materials and Operating Supplies
A. This account shall include the cost of
materials purchased primarily for use in the
utility business for construction, operation
and maintenance purposes. 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 realizable 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,
Items
1. Invoice price of fuel less any cash or
other discounts.
2. Freight, switching, demurrage, and
other transportation charges, not including,
however, any charges for unloading from the
shipping medium.
3. Excise taxes, purchasing agents’ commissions, insurance, and other expenses directly assignable to cost of fuel.
4. Operating, maintenance and depreciation expenses, and ad valorem taxes on utility-owned transportation equipment used to
transport fuel from the point of acquisition
to the unloading point.
5. Lease or rental costs of transportation
equipment used to transport fuel from the
point of acquisition to the unloading point.
152
Residuals
This account shall include the book cost of
any residuals produced in the production or
manufacturing processes.
Fuel Stock Expenses Undistributed
A. This account may include the cost of
labor and of supplies used and expenses incurred in unloading fuel from the shipping
medium and in the handling thereof prior to
its use, if such expenses are sufficiently significant in amount to warrant being treated
as a part of the cost of fuel inventory rather
than being charged direct to expense as incurred.
B. Amounts included herein shall be
charged to expense as the fuel is used to the
end that the balance herein shall not exceed
the expenses attributable to the inventory of
fuel on hand.
Items
Labor:
1. Procuring and handling of fuel.
2. All routine fuel analyses.
3. Unloading from shipping facility and
placing in storage.
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§ 1767.18
7 CFR Ch. XVII (1–1–12 Edition)
first-in-first-out, or such other method of inventory accounting as conforms with accepted accounting standards consistently applied.
current with the monthly emission of sulfur
dioxide.
C. Separate subdivisions of this account
shall be maintained so as to separately account for those allowances usable in the current year and in each subsequent year. The
underlying records of these subdivisions
shall be maintained in sufficient detail so as
to identify each allowance included; the origin of each allowance; and the acquisition
cost, if any, of the allowance.
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.
158.2
NOTE: Where expenses applicable to materials purchased cannot be directly assigned
to particular purchases, they shall be
charged to Account 163, Stores Expense Undistributed.
155
Merchandise
This account shall include the book cost of
materials and supplies and appliances and
equipment held primarily for merchandising,
jobbing, and contract work. The principles
prescribed in accounting for utility materials and supplies shall be observed with respect to items carried in this account.
156
163
Other Materials and Supplies
Nuclear Materials Held for Sale
This account shall include the net salvage
value of uranium, plutonium, and other nuclear materials held by the company for sale
or other disposition that are not to be reused
by the company in its electric utility operations. This account shall be debited and Account 120.5, Accumulated Provision for Amortization of Nuclear Fuel Assemblies, credited for such net salvage value. Any difference between the amount recorded in this
account and the actual amount realized from
the sale of materials shall be debited or credited, as appropriate, to Account 518, Nuclear
Fuel Expense, at the time of such sale.
158.1
Stores Expense Undistributed
A. This account shall include the cost of
supervision, labor, and expenses incurred in
the operation of general storerooms, including purchasing, storage, handling, and distribution of materials and supplies.
B. This account shall be cleared by adding
to the cost of materials and supplies issued,
a suitable loading charge which will distribute the expense equitably over stores
issues. The balance in the account at the
close of the year shall not exceed the amount
of stores expenses reasonably attributable to
the inventory of materials and supplies, exclusive of fuel, as any amount applicable to
fuel costs should be included in Account 152,
Fuel Stock Expenses Undistributed.
This account shall include the book cost of
materials and supplies held primarily for
nonutility purposes. The principles prescribed in accounting for utility materials
and supplies shall be observed with respect
to items carried in this account.
157
Allowances Withheld
A. This account shall include the cost of
allowances owned by the utility but withheld
by the Environmental Protection Agency.
(See § 1767.15 (u).)
B. The inventory cost of the allowances released by the Environmental Protection
Agency for use by the utility shall be transferred to Account 158.1, Allowance Inventory.
C. The underlying records of this account
shall be maintained in sufficient detail so as
to identify each allowance included; the origin of each allowance; and the acquisition
cost, if any, of the allowances.
Items
Labor:
1. Inspecting and testing materials and
supplies when not assignable to specific
items.
2. Unloading from shipping facility and
placing in storage.
3. Supervision of purchasing and stores department to extent assignable to materials
handled through stores.
4. Getting materials from stock and in
readiness to go out.
5. Inventorying stock received or stock on
hand by stores employees but not including
inventories by general department employees as part of internal or general audits.
6. Purchasing department activities in
checking material needs, investigating
Allowance Inventory
A. This account shall include the cost of
allowances owned by the utility and not
withheld by the Environmental Protection
Agency. See § 1767.15 (u) and Account 158.2,
Allowances Withheld.
B. This account shall be credited and Account 509, Allowances, shall be debited con-
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Rural Utilities Service, USDA
§ 1767.18
sources of supply, analyzing prices, preparing and placing orders, and related activities to extent applicable to materials handled through stores. (Optional: Purchasing
department expenses may be included in administrative and general expenses.)
7. Maintaining stores equipment.
8. Cleaning and tidying storerooms and
stores offices.
9. Keeping stock records, including the recording and posting of material receipts and
issues and maintaining inventory records of
stock.
10. Collecting and handling scrap materials
in stores.
Supplies and Expenses:
1. Adjustments of inventories of materials
and supplies but not including large differences which can readily be assigned to important classes of materials and equitably
distributed among the accounts to which
such classes of materials have been charged
since the previous inventory.
2. Cash and other discounts not practically
assignable to specific materials.
3. Freight and express charges when not assignable to specific items.
4. Heat, light, and power for storerooms
and store offices.
5. Brooms, brushes, sweeping compounds
and other supplies used in cleaning and
tidying storerooms and stores offices.
6. Injuries and damages.
7. Insurance on materials and supplies and
on stores equipment.
8. Losses due to breakage, leakage, evaporation, fire or other causes, less credits for
amounts received from insurance, transportation companies, or others in compensation
of such losses.
9. Postage, printing, stationery, and office
supplies.
10. Rent of storage space and facilities.
11. Communication service.
12. Excise and other similar taxes not assignable to specific materials.
13. Transportation expense on inward
movement of stores and on transfer between
storerooms but not including charges on materials recovered from retirements which
shall be accounted for as part of the cost of
removal.
165.1
165.2
171
Interest and Dividends Receivable
This account shall include the amount of
interest on bonds, mortgages, notes, commercial paper, loans, open accounts, and deposits, the payment of which is reasonably
assured, and the amount of dividends declared or guaranteed on stocks owned.
NOTE A: Interest which is not subject to
current settlement shall not be included
herein but in the account in which the associated principle is recorded.
NOTE B: Interest and dividends receivable
from associated companies shall be included
in Account 146, Accounts Receivable from
Associated Companies.
172
Rents Receivable
This account shall include rents receivable
or accrued on property rented or leased by
the utility to others.
NOTE: Rents receivable from associated
companies shall be included in Account 146,
Accounts Receivable from Associated Companies.
173
Accrued Utility Revenues
At the option of the utility, the estimated
amount accrued for service rendered, but not
billed at the end of any accounting period,
may be included herein. If accruals are made
for unbilled revenues, accruals shall also be
made for unbilled expenses, such as the purchase of energy.
174
Miscellaneous 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.
175
Derivative Instrument Assets
This account shall include the amounts
paid for derivative instruments, and the
change in the fair value hedges. Account 421,
Miscellaneous Nonoperating Income, shall be
credited or debited, as appropriate, with the
corresponding amount of the change in the
fair value of the derivative instrument.
NOTE: A physical inventory of each class of
materials and supplies shall be made at least
every two years.
165
Prepayments—Insurance
Other Prepayments
176
Prepayments
Derivative Instrument Assets—Hedges
A. This account shall include the amounts
paid for derivative instruments, and the
change in the fair value of derivative instrument assets designated by the utility as cash
flow or fair value hedges.
B. When a utility designates a derivative
instrument asset as a cash flow hedge it will
record the change in the fair value of the derivative instrument in this account with a
A. This account shall include amounts representing prepayments of insurance, rents,
taxes, interest, and miscellaneous items, and
shall be kept or supported in such manner as
to disclose the amount of each class of prepayment.
B. Account 165 shall be subaccounted as
follows:
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§ 1767.18
7 CFR Ch. XVII (1–1–12 Edition)
concurrent charge to Account 209, Accumulated Other Comprehensive Income, with the
effective portion of the gain or loss. The ineffective portion of the cash flow hedge shall
be charged to the same income or expense
account that will be used when the hedged
item enters into the determination of net income.
C. When a utility designates a derivative
instrument as a fair value hedge it shall
record the change in the fair value of the derivative instrument in this account with a
concurrent charge to a subaccount of the
asset or liability that carries the item being
hedged. The ineffective portion of the fair
value hedge shall be charged to the same income or expense account that will be used
when the hedged item enters into the determination of net income.
B. This account shall be credited and Account 407, Amortization of Property Losses,
Unrecovered Plant and Regulatory Study
Costs, shall be debited over the period specified by RUS.
C. Any additional costs incurred, relative
to the cancellation or premature retirement,
may be included in this account and amortized over the remaining period of the original amortization period. Should any gains or
recoveries be realized relative to the cancelled or prematurely retired plant, such
amounts shall be used to reduce the
unamortized amount of the costs recorded
herein.
D. In the event that the recovery of costs
included herein is disallowed in the rate proceedings, the disallowed costs shall be
charged to Account 426.5, Other Deductions,
in the year of such disallowance.
Deferred Debits
181
182.3
Unamortized Debt Expense
This account shall include expenses related
to the issuance or assumption of debt securities. Amounts recorded in this account shall
be amortized over the life of each respective
issue under a plan which will distribute the
amount equitably over the life of the security. The amortization shall be on a monthly
basis, and the amounts thereof shall be
charged to Account 428, Amortization of
Debt
Discount
and
Expense.
Any
unamortized amounts outstanding at the
time that the related debt is prematurely reacquired shall be accounted for as indicated
in § 1767.15 (q).
182.1
Extraordinary Property Losses
A. When authorized or directed by RUS,
this account shall include extraordinary
losses which could not reasonably have been
anticipated and which are not covered by insurance or other provisions, such as unforeseen damages to property.
B. Application to RUS for permission to
use this 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.
182.2
Other Regulatory Assets
A. This account shall include the amounts
of regulatory-created assets, not includable
in other accounts, resulting from the ratemaking actions of regulatory agencies. (See
the definition of regulatory assets and liabilities.)
B. The amounts included in this account
are to be established by those charges which
would have been included in net income, or
accumulated other comprehensive income,
determinations in the current period under
the general requirements of the Uniform
System of Accounts but for it being probable
that such items will be included in a different period(s) for purposes of developing
the rates that the utility is authorized to
charge for its utility services. When specific
identification of the particular source of a
regulatory asset cannot be made, such as in
plant phase-ins, rate moderation plans, or
rate levelization plans, Account 407.4, Regulatory Credits, shall be credited. The
amounts recorded in this account are generally to be charged, concurrently with the
recovery of the amounts in rates, to the
same account that would have been charged
if included in income when incurred, except
all regulatory assets established through the
use of Account 407.4 shall be charged to Account 407.3, Regulatory Debits, concurrent
with the recovery of the amounts in rates.
C. If rate recovery of all or part of an
amount included in this account is disallowed, the disallowed amount shall be
charged to Account 426.5, Other Deductions,
or Account 435, Extraordinary Deductions, in
the year of the disallowance.
D. The records supporting the entries to
this account shall be kept so that the utility
can furnish full information as to the nature
and amount of each regulatory asset included in this account, including justification for inclusion of such amounts in this account.
Unrecovered Plant and Regulatory
Study Costs
A. This account shall include: (1) nonrecurring costs of studies and analyses mandated by regulatory bodies related to plants
in service, transferred from Account 183, Preliminary Survey and Investigations Charges,
and not resulting in construction; and (2)
when authorized by RUS, significant unrecovered costs of plant facilities where construction has been cancelled or which have
been prematurely retired.
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Rural Utilities Service, USDA
183
§ 1767.18
Preliminary Survey and Investigation
Charges
Account 451, Miscellaneous Service Revenues.
A. This account shall be charged with all
expenditures for preliminary surveys, plans,
and investigations made for the purpose of
determining the feasibility of utility
projects under contemplation. If construction results, this account shall be credited
and the appropriate utility plant account
charged. If the work is abandoned, the
charge shall be made to Account 426.5, Other
Deductions, or to the appropriate operating
expense account.
B. This account shall also include costs of
studies and analyses mandated by regulatory
bodies related to plant in service. If construction results from such studies, this account shall be credited and the appropriate
utility plant account charged with an equitable portion of such study costs directly attributable to new construction. The portion
of such study costs not attributable to new
construction or the entire cost if construction does not result shall be charged to Account 182.2, Unrecovered Plant and Regulatory Study Costs, or the appropriate operating expense account. The costs of such
studies relative to plant under construction
shall be included directly inAccount 107,
Construction Work in Progress—Electric.
C. The records supporting the entries to
this account shall be so kept that the utility
can furnish complete information as to the
nature and the purpose of the survey, plans,
or investigations, and the nature and
amounts of the sever several charges.
186
187
188 Research, Development, and
Demonstration Expenditures
A. This account shall be charged with the
cost of all expenditures coming within the
meaning of Research, Development, and
Demonstration (RD&D) of this USoA (See
§ 1767.10 (a)(34)) except those expenditures
properly chargeable to Account 107, Construction Work in Progress—Electric.
B. Costs that are minor or of a general or
recurring nature shall be transferred from
this account to the appropriate operating expense function or if such costs are common
to the overall operations or cannot be feasibly allocated to the various operating accounts, such costs shall be recorded in Account 930.2, Miscellaneous General Expenses.
C. In certain instances, a company may
incur large and significant research, development, and demonstration expenditures which
are nonrecurring and which would distort
the annual research, development, and demonstration charges for the period. In such a
case, the portion of such amounts that cause
the distortion may be amortized to the appropriate operating expense account over a
period not to exceed 5 years unless otherwise
authorized by RUS.
D. The entries in this account must be so
maintained as to show separately each
project along with complete detail of the nature and purpose of the research, development, and demonstration project together
with the related costs.
Clearing Accounts
A. This caption shall include undistributed
balances in clearing accounts at the date of
the balance sheet. Balances in clearing account shall be substantially cleared not later
than the end of the calendar year unless
items held therein relate to a future period.
B. Account 184 shall be subaccounted as
follows:
184.1 Transportation Expense—Clearing
184.2 Clearing Accounts—Other
185
Deferred Losses from Disposition of
Utility Plant
This account shall include losses from the
sale or other disposition of property previously recorded in Account 105, Electric
Plant Held for Future Use, under the provisions of Paragraphs B, C, and D thereof,
where such losses are significant and are to
be amortized over a period of 5 years, unless
otherwise authorized by RUS. The amortization of the amounts in this account shall be
made by debits to Account 411.7, Losses from
Disposition of Utility Plant. (See Account
105, Electric Plant Held for Future Use.)
NOTE: The amount of preliminary survey
and investigation charges transferred to utility plant shall not exceed the expenditures
which may reasonably be determined to contribute directly and immediately and without duplication to utility plant.
184
Miscellaneous Deferred Debits
This account shall include all debits not
elsewhere provided for, such as miscellaneous work in progress, and unusual or extraordinary expenses, not included in other
accounts, which are in process of amortization and items the proper final disposition of
which is uncertain.
Temporary Facilities
This account shall include amounts shown
by work orders for plant installed for temporary use in utility service for periods of
less than one year. Such work orders shall be
charged with the cost of temporary facilities
and credited with payments received from
customers and net salvage realized on removal of the temporary facilities. Any net
credit or debit resulting shall be cleared to
189
Unamortized Loss on Reacquired Debt
This account shall include the losses on
long-term debt reacquired or redeemed. The
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§ 1767.19
7 CFR Ch. XVII (1–1–12 Edition)
posed of as RUS may authorize or direct.
(See § 1767.15 (t).)
amounts in this account shall be amortized
in accordance with § 1767.15 (q).
190
[58 FR 59825, Nov. 10, 1993, as amended at 59
FR 27436, May 27, 1994; 60 FR 55429, 55430,
Nov. 1, 1995; 73 FR 30282, May 27, 2008]
Accumulated Deferred Income Taxes
A. This account shall be debited and Account 411.1, Provision for Deferred Income
Taxes—Credit, Utility Operating Income, or
Account 411.2, Provision for Deferred Income
Taxes—Credit, Other Income and Deductions, as appropriate, shall be credited with
an amount equal to that by which income
taxes payable for the year are higher because
of the inclusion of certain items in income
for tax purposes, which items for general accounting purposes will not be fully reflected
in the utility’s determination of annual net
income until subsequent years.
B. This account shall be credited and Account 410.1, Provision for Deferred Income
Taxes, Utility Operating Income, or Account
410.2, Provision for Deferred Income Taxes,
Other Income and Deductions, as appropriate, shall be debited with an amount
equal to that by which income taxes payable
for the year are lower because of prior payment of taxes as provided by Paragraph A
above, because of difference in timing for tax
purposes of particular items of income or income deductions from that recognized by the
utility for general accounting purposes. Such
credit to this account and debit to Account
410.1 or Account 410.2 shall, in general, represent the effect on taxes payable in the current year of the smaller amount of book income recognized for tax purposes as compared to the amount recognized in the utility’s current accounts with respect to the
item or class of items for which deferred tax
accounting by the utility was authorized by
RUS.
C. Vintage year records with respect to entries to this account, as described above, and
the account balance, shall be so maintained
as to show the factor of calculation with respect to each annual amount of the item or
class of items for which deferred tax accounting by the utility is utilized.
D. The utility is restricted in its use of
this account to the purpose set forth above.
It shall not make use of the balance in this
account or any portion thereof except as provided in the text of this account, without
prior approval of RUS. Any remaining deferred tax account balance with respect to an
amount for any prior year’s tax deferral, the
amortization of which or other recognition
in the utility’s income accounts has been
completed, or other disposition made, shall
be debited to Account 410.1, Provision for Deferred Income Taxes, Utility Operating Income, or Account 410.2, Provision for Deferred Income Taxes, Other Income and Deductions, as appropriate, or otherwise dis-
§ 1767.19 Liabilities and other credits.
The liabilities and other credit accounts identified in this section shall
be used by all RUS borrowers.
LIABILITIES AND OTHER CREDITS
Margins and Equities
200 Memberships
200.1 Memberships Issued
200.2 Memberships Subscribed But Unissued
201 Patronage Capital
201.1 Patronage Capital Credits
201.2 Patronage Capital Assignable
202–207 [Reserved]
208 Donated Capital
209 Accumulated Other Comprehensive Income
210 [Reserved]
211 Consumers’ Contributions for Debt
Service
212–214 [Reserved]
215 Appropriated Margins
215.1 Unrealized Gains and Losses—Debt
and Equity Securities
216 [Reserved]
216.1 Unappropriated Undistributed Subsidiary Earnings
217 Retired Capital Credits—Gain
218 Capital Gains and Losses
219 Other Margins and Equities
219.1 Operating Margins
219.2 Nonoperating Margins
219.3 Other Margins
219.4 Other Margins and Equities—Prior Periods
Long-Term Debt
221 Bonds
222 Reacquired Bonds
223 Advances from Associated Companies
224 Other Long-Term Debt
224.1 Long-Term Debt—RUS Construction
Loan Contract
224.2 RUS Loan Contract—Construction—
Debit
224.3 Long-Term Debt—RUS Construction
Notes Executed
224.4 RUS Notes Executed—Construction—
Debit
224.5 Interest Accrued—Deferred—RUS Construction
224.6 Advance Payments Unapplied—RUS
Long-Term Debt—Debit
224.7 Long-Term Debt—Installation Loan
Contract
224.8 RUS Loan Contract—Installation—
Debit
224.9 Long-Term Debt—Installation Notes
Executed
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Rural Utilities Service, USDA
§ 1767.19
224.10 RUS Notes Executed—Installation—
Debit
224.11 Other Long-Term Debt—Subscriptions
224.12 Other
Long-Term
Debt—Supplemental Financing
224.13 Supplemental Financing Notes Executed—Debit
224.14 Other Long-Term Debt—Miscellaneous
224.15 Notes Executed—Other—Debit
224.16 Long-Term Debt—RUS Economic Development Notes Executed
224.17 RUS Notes Executed—Economic Development—Debit
224.18 Other Long-Term Debt—Grant Funds
225 Unamortized Premium on Long-Term
Debt
226 Unamortized Discount on Long-Term
Debt—Debit
242.1 Accrued Rentals
242.2 Accrued Payroll
242.3 Accrued Employees’ Vacations and
Holidays
242.4 Accrued Insurance
242.5 Other Current and Accrued Liabilities
243 Obligations Under Capital Leases—Current
Deferred Credits
251 [Reserved]
252 Customer Advances for Construction
253 Other Deferred Credits
253.1 Other Deferred Credits—Consumers’
Energy Prepayments
254 Other Regulatory Liabilities
255 Accumulated Deferred Investment Tax
Credits
256 Deferred Gains from Disposition of Utility Plant
257 Unamortized Gain on Reacquired Debt
281 Accumulated Deferred Income Taxes—
Accelerated Amortization Property
282 Accumulated Deferred Income Taxes—
Other Property
283 Accumulated Deferred Income Taxes—
Other
Other Noncurrent Liabilities
227
Obligations Under Capital Leases—Noncurrent
228.1 Accumulated Provision for Property
Insurance
228.2 Accumulated Provision for Injuries
and Damages
228.3 Accumulated Provision for Pensions
and Benefits
228.4 Accumulated Miscellaneous Operating
Provisions
229 Accumulated Provision for Rate Refunds
LIABILITIES AND OTHER CREDITS
Margins and Equities
200
Current and Accrued Liabilities
Memberships
A. This account shall include the total
amount of memberships issued and subscribed.
B. Account 200 shall be subaccounted as
follows:
231 Notes Payable
232 Accounts Payable
232.1 Accounts Payable—General
232.2 Accounts Payable—RUS Construction
232.3 Accounts Payable—Other
233 Notes Payable to Associated Companies
234 Accounts Payable to Associated Companies
235 Customer Deposits
236 Taxes Accrued
236.1 Accrued Property Taxes
236.2 Accrued U.S. Social Security Tax—Unemployment
236.3 Accrued U.S. Social Security Tax—
F.I.C.A.
236.4 Accrued State Social Security Tax—
Unemployment
236.5 Accrued State Sales Tax—Consumers
236.6 Accrued Gross Revenue or Gross Receipts Tax
236.7 Accrued Taxes—Other
237 Interest Accrued
238 Patronage Capital and Patronage Refunds Payable
238.1 Patronage Capital Payable
238.2 Patronage Refunds Payable
239 Matured Long-Term Debt
240 Matured Interest
241 Tax Collections Payable
242 Miscellaneous Current and Accrued Liabilities
200.1
200.2
Memberships Issued
Memberships Subscribed But Unissued
200.1
Memberships Issued
A. This account shall include the face
value of membership certificates outstanding. A detailed record shall be maintained to show for each member, the name,
address, date of payment, amount paid, and
certificate number.
B. If membership fees are applied against
energy bills, this account shall be debited for
the full amount of the membership with the
offsetting credit to the appropriate accounts
receivable, and to accounts payable for any
refundable amounts. Any balances that cannot be refunded, due to inability to locate
the member or because of bylaw restrictions,
shall be credited to Account 208, Donated
Capital. If determination of the ultimate disposition of the fees cannot be made immediately, the amount involved should be
transferred to Account 253, Other Deferred
Credits, until the determination is made.
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§ 1767.19
7 CFR Ch. XVII (1–1–12 Edition)
C. When a transfer fee is collected, the
transaction shall be recorded by debiting Account 131.1, Cash—General, and crediting Account 451, Miscellaneous Service Revenues,
with the fee collected.
200.2
209
A. This account shall include revenues, expenses, gains, and losses that are properly
includable in other comprehensive income
during the period. Examples of other comprehensive income include foreign currency
items, minimum pension liability adjustment, unrealized gains and losses on certain
investments in debt and equity securities,
and cash flow hedges. Records supporting the
entries to this account shall be maintained
so that the utility can furnish the amount of
other comprehensive income for each item
included in this account.
B. This account shall also be debited or
credited, as appropriate, with amounts of accumulated other comprehensive income that
have been included in the determination of
net income during the period and in accumulated other comprehensive income in prior
periods. Separate records for each category
of items shall be maintained to identify the
amount of the reclassification adjustments
from accumulated other comprehensive income to earning made during the period.
Memberships Subscribed But Unissued
This account shall include the face value of
memberships subscribed for but not issued.
When certificates are issued, the amount of
the memberships shall be transferred to Account 200.1, Memberships Issued.
201
Patronage Capital
A. This account shall include the total
amount of patronage capital assignable and
assigned.
B. Account 201 shall be subaccounted as
follows:
201.1
201.2
Patronage Capital Credits
Patronage Capital Assignable
201.1
Patronage Capital Credits
A. This account shall include the amounts
of patronage capital which have been assigned to individual patrons. A subsidiary
record, ‘‘patronage capital ledger,’’ shall be
maintained, containing an account for each
patron who has furnished capital under a
capital credits plan.
B. When the return of patrons’ capital to
individual patrons has been authorized by
the board of directors (or trustees), the
amounts authorized shall be transferred to
Account 238.1, Patronage Capital Payable.
(See also Account 217, Retired Capital Credits-Gain.)
201.2
210 [Reserved]
211
Consumers’ Contributions for Debt
Service
This account shall include the amounts
billed to consumers as ‘‘amortization
charges’’ for the purpose of servicing longterm debt.
212–214 [Reserved]
215
Appropriated Margins
This account shall include all amounts appropriated as reserves from margins. The account shall be so maintained as to show the
amount of each separate reserve and the nature and amounts of the debits and credits
thereto.
Patronage Capital Assignable
A. This account shall include all amounts
transferred from Account 219.1, Operating
Margins; Account 219.2, Nonoperating Margins; Account 219.3, Other Margins; and Account 219.4, Other Margins and Equities—
Prior Periods, which are assignable to individual patrons’ capital accounts.
B. Entries to this account shall be made so
as to clearly disclose the nature and source
of each transaction. Amounts so assigned
shall be transferred to Account 201.1, Patronage Capital Credits.
215.1
Unrealized Gains and Losses—Debt
and Equity Securities
This account shall include the unrealized
holding gains and losses for available-forsale securities.
216 [Reserved]
216.1
202–207 [Reserved]
208
Accumulated Other Comprehensive
Income
Donated Capital
Unappropriated Undistributed
Subsidiary Earnings
This account shall include the balances, either debit or credit, of undistributed retained earnings of subsidiary companies
since their acquisition. When dividends are
received from subsidiary companies relating
to amounts included in this account, this account shall be debited and Account 219.2,
Nonoperating Margins, credited.
This account shall include credits arising
from forfeiture of membership fees and from
donations of capital not otherwise provided
for. Entries to this account shall be made so
as to clearly disclose the nature and source
of each transaction.
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217
§ 1767.19
Retired Capital Credits—Gain
219.4
A. This account shall include credits resulting from the retirement of patronage
capital through settlement of individual patrons’ capital credits at less than 100 percent
of the capital assigned to the patron. The
portion of patronage capital not returned to
the patrons, under such settlements, shall be
debited to Account 201.1, Patronage Capital
Credits, and credited to this account.
B. This account shall also include amounts
representing patronage capital authorized to
be retired to patrons who cannot be located.
Returned checks issued for retirements of
patronage capital, after an appropriate waiting period, shall be credited to this account,
and a record maintained adequate to enable
the cooperative to make payment to the patron if and when a claim has been established by the consumer.
218
A. This account shall include significant
nonrecurring transactions relating to prior
periods. To be significant, the transaction
must be of sufficient magnitude to justify redistribution of patronage capital credits already allocated for such prior periods.
B. All entries to this account must receive
RUS prior approval.
C. These transactions are limited to items
to (1) correct an error in the financial statements of a prior year, and (2) make adjustments that result from realization of income
tax benefits of preacquisition operating loss
carryforwards. This account shall also include the related income taxes (state and
Federal) on items included herein.
D. Amounts in this account shall be transferred at the end of the year to Account
219.1, Operating Margins, or Account 219.2,
Nonoperating Margins, as appropriate. Also,
at the end of the year, these amounts should
be transferred from Account 219.1, or Account 219.2 to Account 201.2, Patronage Capital Assignable, when appropriate.
Capital Gains and Losses
No entries shall be made to this account
without the prior approval of RUS unless it
is to distribute past capital gains and losses
as capital credits or to eliminate accumulated capital losses in conformance with the
bylaws of the cooperative.
219
Other Margins and Equities—Prior
Periods
Long-Term Debt
221
Other Margins and Equities
A. This account shall include total amount
of margins and equities from all sources.
B. Account 219 shall be subaccounted as
follows:
219.1 Operating Margins
219.2 Nonoperating Margins
219.3 Other Margins
219.4 Other Margins and Equities—Prior Periods
219.1
222
Operating Margins
Nonoperating Margins
This account shall be debited or credited
with the balances arising from transactions,
the details of which have been recorded in
Accounts 415, 416, 417, 417.1, 418, 419, 419.1, 421,
421.1, 421.2, 422, 434, and 435.
219.3
Reacquired Bonds
A. This account shall include the face
value of bonds actually issued or assumed by
the utility and reacquired by it and not 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, expenses or premium,
and the amount paid upon reacquisition,
shall
be
included
in
Account
189,
Unamortized Loss on Reacquired Debt, or
Account 257, Unamortized Gain on Reacquired Debt, as appropriate. (See § 1767.15
(q).)
This account shall be debited or credited
with the balances arising from transactions,
the details of which have been recorded in
Accounts 400, 401, 402, 403, 404, 405, 406, 407,
408, 412, 413, 414, 423, 424, 425, 426, 427, 428, and
431. Accounts 400, 401, and 402 are control accounts and, at the option of the borrower
may or may not be used. If they are not used,
the detailed revenue and expense accounts
shall be closed directly to this account.
219.2
Bonds
This account shall include, in a separate
subdivision for each class and series of
bonds, 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.
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 includible in
Account 233, Notes Payable to Associated
Other Margins
No entries shall be made to this account
unless it is to distribute or eliminate prior
balances in conformance with the bylaws of
the cooperative.
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§ 1767.19
7 CFR Ch. XVII (1–1–12 Edition)
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.
224
224.2
A. This account shall include the total
loans (for construction purposes) which are
covered by loan contract but not by executed
notes.
B. This account is to be used at the option
of the borrower.
Other Long-Term Debt
A. This account shall include, until maturity, all long-term 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 longterm debt, and other obligations maturing
more than one year from the date of issue or
assumption.
B. Account 224 shall be subaccounted as
follows:
224.3
Long-Term Debt—RUS Construction
Notes Executed
This account shall include the contractual
liability to RUS on construction notes executed. Records shall be maintained to show
separately for each class of obligation all details as to the date of obligation, date of maturity, interest date and rate, and securities
for the obligation.
224.4
224.1 Long-Term Debt—RUS Construction
Loan Contract
224.2 RUS Loan Contract—Construction—
Debit
224.3 Long-Term Debt—RUS Construction
Notes Executed
224.4 RUS Notes Executed—Construction—
Debit
224.5 Interest Accrued—Deferred—RUS Construction
224.6 Advance Payments Unapplied—RUS
Long-Term Debt—Debit
224.7 Long-Term Debt—Installation Loan
Contract
224.8 RUS Loan Contract—Installation—
Debit
224.9 Long-Term Debt—Installation Notes
Executed
224.10 RUS Notes Executed—Installation—
Debit
224.11 Other Long-Term Debt—Subscriptions
224.12 Other
Long-Term
Debt—Supplemental Financing
224.13 Supplemental Lender Notes Executed—Debit
224.14 Other Long-Term Debt—Miscellaneous
224.15 Notes Executed—Other—Debit
224.16 Long-Term Debt—RUS Economic Development Notes Executed
224.17 RUS Notes Executed—Economic Development—Debit
224.18 Other Long-Term Debt—Grant Funds
224.1
RUS Loan Contract—Construction—
Debit
RUS Notes Executed—Construction—
Debit
This account shall include the total
amount of the unadvanced RUS loans for
construction purposes, which are covered by
executed notes. When advances are received
from the RUS for construction, this account
shall be credited and Account 131.2, Cash—
Construction Fund—Trustee, debited with
the amount of cash advanced.
224.5
Interest Accrued—Deferred—RUS
Construction
This account shall include interest on RUS
construction obligations deferred by the
terms of mortgage notes or extension agreements.
224.6
Advance Payments Unapplied—RUS
Long-Term Debt—Debit
A. This account shall include principal
payments on mortgage notes paid in advance
of the date due and not applied to a specific
note. Also, include in this account interest
savings which are accrued and added to the
advance payment unapplied.
B. At such time as these payments are applied to a specific note or loan balances, this
account shall be credited and the long-term
debt account debited with the amount so applied.
224.7
Long-Term Debt—Installation Loan
Contract
A. This account shall include the contractual obligation to RUS on installation loans
covered by loan contract but not covered by
executed notes.
B. This account is to be used at the option
of the borrower.
Long-Term Debt—RUS Construction
Loan Contract
A. This account shall include the contractual obligation to RUS on construction loans
covered by loan contract but not by executed
notes.
B. This account is to be used at the option
of the borrower.
224.8
RUS Loan Contract—Installation—
Debit
A. This account shall include the total
loans for installation purposes which are
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Rural Utilities Service, USDA
§ 1767.19
covered by loan contract but not by executed
notes.
B. This account is to be used at the option
of the borrower.
224.9
Cash—Construction Fund—Trustee, debited
with the amount of cash so advanced.
224.16
Long-Term Debt—Installation Notes
Executed
This account shall include the contractual
liability to RUS on rural economic development notes executed. Records shall be maintained to show separately for each class of
obligation all details as to the date of obligation, date of maturity, interest date and
rate, and securities for the obligation.
This account shall include the contractual
liability to RUS on installation notes executed.
224.10
RUS Notes Executed—Installation—
Debit
224.17
This account shall include the total
amount of unadvanced loans for installation
purposes, which are covered by executed
note. When advances are received from RUS,
this account shall be credited and Account
131.3, Cash—Installation Loan and Collection
Fund, debited with the amount of cash advanced.
224.11
Other Long-Term Debt—
Subscriptions
224.18
This account shall include the contractual
liability to CFC or other supplemental lenders for that portion of funds borrowed which
mature in more than one year.
225
Supplemental Financing Notes
Executed—Debit
Unamortized Premium on Long-Term
Debt
A. This account shall include the excess of
the cash value of consideration received over
the face value upon the issuance or assumption of long-term debt securities.
B. Amounts recorded in this account shall
be amortized over the life of each respective
issue under a plan which will distribute the
amount equitably over the life of the security. The amortization shall be on a monthly
basis, with the amounts thereof to be credited to Account 429, Amortization of Premium on Debt—Credit. (See § 1767.15 (q).)
This account shall include the total
amount of the unadvanced loans for construction purposes, which are covered by executed notes to CFC or other supplemental
lender. This account shall be debited with
the face amount of notes executed. When advances are received from a supplemental
lender for construction, this account shall be
credited and Account 131.2, Cash—Construction Fund—Trustee, debited with the
amount of cash advanced.
226
Other Long-Term Debt—
Miscellaneous
Unamortized Discount on Long-Term
Debt—Debit
A. This account shall include the excess of
the face value of long-term debt securities
over the cash value of consideration received
therefor, related to the issue or assumption
of all types and classes of debt.
B. Amounts recorded in this account shall
be amortized over the life of the respective
issues under a plan which will distribute the
amount equitably over the life of the securities. The amortization shall be on a monthly
basis, wit the amounts thereof charged to
Account 428, Amortization of Debt Discount
and Expense. (See § 1767.15 (q).)
This account shall include the amount of
other long-term debt not provided for elsewhere.
224.15
Other Long-Term Debt—Grant Funds
This account shall include the total
amount of Rural Development grant funds
awarded for rural economic development
purposes, which are subject to repayment at
the conclusion of the project. (See Sec.
1767.41, Interpretation 626, Rural Economic
Development Loan and Grant Program.)
224.12 Other Long-Term Debt—
Supplemental Financing
224.14
RUS Notes Executed—Economic
Development—Debit
This account shall include the total
amount of the unadvanced RUS loans for
rural economic development purposes, which
are covered by executed notes. When advances are received from the RUS for rural
economic development projects, this account
shall be credited and Account 131.12, Cash—
General—Economic
Development
Funds,
debited with the amount of cash advanced.
This account shall include the contractual
obligation to purchase CFC Capital Term
Certificates and any other similar obligation
relating to supplemental financing.
224.13
Long-Term Debt—RUS Economic
Development Notes Executed
Notes Executed—Other—Debit
This account shall include the total
amount of the unadvanced loans for construction purposes, which are covered by executed notes to others not included in the
foregoing accounts. When advances are received from such supplemental lender, this
account shall be credited and Account 131.2,
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§ 1767.19
7 CFR Ch. XVII (1–1–12 Edition)
Other Noncurrent Liabilities
227
228.3
Obligations Under Capital Leases—
Noncurrent
A. This account shall include provisions
made by the utility and amounts contributed
by employees for pensions, accident and
death benefits, savings, relief, hospital, and
other provident purposes, where the funds
are included in the assets of the utility either in general or in segregated fund accounts.
B. Amounts paid by the utility for the purpose for which this liability is established
shall be charged hereto.
C. A separate account shall be kept for
each kind of provision included herein.
This account shall include the portion not
due within one year, of the obligations recorded for the amounts applicable to leased
property recorded as assets in Account 101.1,
Property Under Capital Leases; Account
120.6, Nuclear Fuel Under Capital Leases; or
Account 121, Nonutility Property.
SPECIAL INSTRUCTIONS
No amounts shall be credited to Accounts
228.1 through 228.4 unless authorized by a
regulatory authority or authorities to be
collected in the utility’s rates.
228.1
NOTE: If employee pension or benefit plan
funds are not included among the assets of
the utility but are held by outside trustees,
payments into such funds, or accruals therefor, shall not be included in this account.
Accumulated Provision for Property
Insurance
228.4
A. This account shall include amounts reserved by the utility for losses through accident, fire, flood, or other hazards to its own
property or property leased from others, not
covered by insurance. The amounts charged
to Account 924, Property Insurance, or other
appropriate accounts to cover such risks
shall be credited to this account. A schedule
of risks covered 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, not to exceed the account
balance. Details of these charges shall be
maintained according to the year the casualty occurred which gave rise to the loss.
228.2
Accumulated Provision for Pensions
and Benefits
Accumulated Miscellaneous Operating
Provisions
A. This account shall include all operating
provisions which are not provided for elsewhere.
B. This account shall be maintained in
such a manner as to show the amount of
each separate provision and the nature and
amounts of the debits and credits thereto.
NOTE: This account includes only provisions as may be created for operating purposes and does not include any reservations
of income, the credits for which should be recorded in Account 215, Appropriated Margins.
229
Accumulated Provision for Injuries
and Damages
Accumulated Provision for Rate
Refunds
A. This account shall be credited with
amounts charged to Account 449.1, Provision
for Rate Refunds, to provide for estimated
refunds where the utility is collecting
amounts in rates subject to refund.
B. When a refund of any amount recorded
in this account is ordered by a regulatory
authority, such amount shall be charged
hereto and credited to Account 242, Miscellaneous Current and Accrued Liabilities.
C. Records supporting the entries to this
account shall be kept so as to identify each
amount recorded by the respective rate filing docket number.
A. This account shall be credited with
amounts charged to Account 925, Injuries
and Damages, or other appropriate accounts,
to meet the probable liability, not covered
by insurance, for deaths or injuries to employees and others and for damages to property neither owned nor held under lease by
the utility.
B. When liability for any injury or damage
is admitted by the utility either voluntarily
or because of the decision of a court or other
lawful authority, such as a workmen’s compensation board, the admitted liability shall
be charged to this account and credited to
the appropriate current liability account.
Details of these charges shall be maintained
according to the year the casualty occurred
which gave rise to the loss.
Current and Accrued Liabilities
Current and accrued liabilities are those
obligations which have either matured or
which become due within 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 year from date; compensation
NOTE: Recoveries or reimbursements for
losses charged to this account shall be credited hereto; the cost of repairs to property of
others, if provided for herein, shall be
charged to this account.
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Rural Utilities Service, USDA
§ 1767.19
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 1 year from the date 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.
230
NOTE: Notes which are includible in Account 223, Advances from Associated Companies, shall be excluded from this account.
234
This account shall include amounts owing
to associated companies on open accounts
payable on demand.
NOTE: Accounts which are includible in Account 223, Advances from Associated Companies, shall be excluded from this account.
Asset Retirement Obligations
A. This account shall include the amount
of liabilities for the recognition of asset retirement obligations related to electric utility plant and nonutility plant that gives rise
to the obligations. This account shall be
credited for the amount of the liabilities for
asset retirement obligations with amounts
charged to the appropriate electric utility
plant accounts or nonutility plant account
to record the related asset retirement costs.
B. The utility shall charge the accretion
expense to Account 411.10, Accretion Expense, for electric utility plant, Account 413,
Expenses for Electric Plant Leased to Others, for electric plant leased to others, or Account 421, Miscellaneous Nonoperating Income, for nonutility plant, as appropriate,
and credit Account 230, Asset Retirement
Obligations.
C. This account shall be debited with
amounts paid to settle the asset retirement
obligations recorded herein.
D. The utility shall clear from this account
any gains or losses resulting from the settlement of asset retirement obligations in accordance with the instruction prescribed in
Sec. 1767.15(y).
231
235
236
Accounts Payable
A. This account shall include all amounts
payable by the utility within 1 year, which
are not provided for in other accounts.
B. Account 232 shall be subaccounted as
follows:
Accounts Payable—General
Accounts Payable—RUS Construction
Accounts Payable—Other
233
Notes Payable to Associated Companies
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.
C. Accruals for taxes shall be based upon
the net amounts 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. Account 236 shall be subaccounted as
follows:
236.1 Accrued Property Taxes
236.2 Accrued U.S. Social Security Tax—Unemployment
236.3 Accrued U.S. Social Security Tax—
F.I.C.A.
236.4 Accrued State Social Security Tax—
Unemployment
236.5 Accrued State Sales Tax—Consumers
236.6 Accrued Gross Revenue or Gross Receipts Tax
236.7 Accrued Taxes—Other
Notes Payable
232.1
232.2
232.3
Customer Deposits
This account shall include all amounts deposited with the utility by its customers as
security for the payment of bills.
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 1 year
from the date of issue, to other than associated companies.
232
Accounts Payable to Associated
Companies
237
This account shall include amounts owing
to associated companies on notes, drafts, acceptances, or other similar evidences of indebtedness payable on demand or not more
than 1 year from the date of issue or creation.
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
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§ 1767.19
7 CFR Ch. XVII (1–1–12 Edition)
records shall be maintained so as to show the
amount of interest accrued on each obligation.
242.4
242.5
Accrued Insurance
Other Current and Accrued Liabilities
242.1
238
Patronage Capital and Patronage
Refunds Payable
A. This account shall include the total
amount of patronage capital authorized to be
returned and paid to patrons.
B. Account 238 shall be subaccounted as
follows:
238.1 Patronage Capital Payable
238.2 Patronage Refunds Payable
238.1
242.2
Patronage Refunds Payable
This account shall include the amount of
patronage refunds which have been authorized to be paid to patrons.
239
242.3
This account shall include the amount of
long-term debt (including any obligation for
premiums) matured and unpaid, without specific agreement for extension of the time of
payment and bonds called for redemption but
not presented.
242.4
Matured Interest
Tax Collections Payable
242.5
This account shall include the amount of
taxes collected by the utility through payroll deductions or otherwise, pending transmittal of such taxes to the proper taxing authority.
Other Current and Accrued Liabilities
This account shall include current and accrued liabilities not provided for elsewhere.
243
NOTE: Do not include liabilities for taxes
assessed directly against the utility which
are accounted for as part of the utility’s own
tax expense.
242
Accrued Insurance
A. This account shall most commonly be
used in case of workmen’s compensation and
public liability insurance for recording the
excess amounts of earned premium over the
advance premiums. Earned premiums are
computed each month by applying the insurance rates to the actual payrolls.
B. Until the amount of the advance premiums is exhausted, the earned premium is
credited to Account 165, Prepayments.
Earned premiums in excess of the advance
premiums are credited to this account.
This account shall include the amount of
matured interest on long-term debt or other
obligations of the utility at the date of the
balance sheet unless such interest is added
to the principal of the debt on which incurred.
241
Accrued Employees’ Vacations and
Holidays
This account shall include the liability for
accrued wages for employees’ vacation, holidays, and sick leave.
Matured Long-Term Debt
240
Accrued Payroll
This account shall include the accrued liability for salaries and wages at the end of
an accounting period for which the appropriate expense or other accounts have been
charged. This account is to be used whether
salaries and wages are paid on a weekly,
semimonthly, or monthly basis.
Patronage Capital Payable
This account shall include the amount of
patronage capital which has been authorized
to be returned to the patron.
238.2
Accrued Rentals
This account shall include unpaid joint use
pole rentals and other rentals. The records
supporting the entries to this account shall
be maintained so as to show for each class of
rental, the amount accrued, the basis for the
accrual, the accounts to which charged, and
the amount of rentals paid.
Obligations Under Capital Leases—
Current
This account shall include the portion, due
within 1 year, of the obligations recorded for
the amounts applicable to leased property
recorded as assets in Account 101.1, Property
Under Capital Leases; Account 120.6, Nuclear
Fuel Under Capital Leases; or Account 121,
Nonutility Property.
Miscellaneous Current and Accrued
Liabilities
A. 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.
B. Account 242 shall be subaccounted as
follows:
242.1 Accrued Rentals
242.2 Accrued Payroll
242.3 Accrued Employees’ Vacations and
Holidays
244
DERIVATIVE INSTRUMENT LIABILITIES
This account shall include the change in
the fair value of all derivative instrument liabilities not designated as cash flow or fair
value hedges. Account 426, Other Deductions,
shall be debited or credited as appropriate
with the corresponding amount of the
change in the fair value of the derivative instrument.
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245
§ 1767.19
DERIVATIVE INSTRUMENT LIABILITIES—
HEDGES
accumulated other comprehensive income,
determinations in the current period under
the general requirements of the Uniform
System of Accounts but for it being probable
that: (1) Such items will be included in a different period(s) for purposes of developing
the rates that the utility is authorized to
charge for its utility services; or (2) refunds
to customers, not provided for in other accounts, will be required. When specific identification of the particular source of the regulatory liability cannot be made or when the
liability arises from revenues collected pursuant to tariffs on file at a regulatory agency, Account 407.3, Regulatory Debits, shall
be debited. The amounts recorded in this account generally are to be credited to the
same account that would have been credited
if included in income when earned except: (1)
All regulatory liabilities established through
the use of Account 407.3 shall be credited to
Account 407.4, Regulatory Credits; and (2) in
the case of refunds, a cash account or other
appropriate account should be credited when
the obligation is satisfied.
C. If it is later determined that the
amounts recorded in this account will not be
returned to customers through rates or refunds, such amounts shall be credited to Account 421, Miscellaneous Nonoperating Income, or Account 434, Extraordinary Income,
as appropriate, in the year such determination is made.
D. The records supporting the entries to
this account shall be kept in such a manner
that the utility can furnish full information
as to the nature and amount of each regulatory liability included in this account, including justification for inclusion of such
amounts in this account.
A. This account shall include the change in
the fair value of derivative instrument liabilities designated by the utility as cash
flow or fair value hedges.
B. A utility shall record the change in the
fair value of a derivative instrument liability related to a cash flow hedge in this account, with a concurrent charge to Account
209, Accumulated Other Comprehensive Income, with the effective portion of the derivative’s gain or loss. The ineffective portion of the cash flow hedge shall be charged
to the same income or expense account that
will be used when the hedged item enters
into the determination of net income.
C. A utility shall record the change in the
fair value of a derivative instrument liability related to a fair value hedge in this account, with a concurrent charge to a subaccount of the asset or liability that carries
the item being hedged. The ineffective portion or the fair value hedge shall be charged
to the same income or expense account that
will be used when the hedged item enters
into the determination of net income.
Deferred Credits
251 [Reserved]
252
Customer Advances for Construction
This account shall include consumer advances 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 the respective
plant accounts.
253
255
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.
253.1
A. This account shall be credited with all
investment tax credits deferred by companies which have elected to follow deferral accounting, partial or full, rather than recognizing, in the income statement, the total
benefits of the tax credit as realized. After
such election, a company may not transfer
amounts from this account, except as authorized herein and in Account 411.4, Investment Tax Credit Adjustments, Utility Operations; Account 411.5, Investment Tax Credit
Adjustments, Nonutility Operations; and Account 420, Investment Tax Credits, or with
approval of RUS.
B. Where the company’s accounting provides that investment tax credits are to be
passed on to customers, this account shall be
debited and Account 411.4 credited with a
proportionate amount determined in relation to the average useful life of electric
utility property to which the tax credits relate or such lesser period of time as allowed
Other Deferred Credits—Consumers’
Energy Prepayments
This account shall include the amount of
advance payments made by consumers in
connection with electric service.
254
Accumulated Deferred Investment Tax
Credits
Other Regulatory Liabilities
A. This account shall include the amounts
of regulatory liabilities, not includible in
other accounts, imposed on the utility by
the ratemaking actions of regulatory agencies.
B. The amounts included in this account
are to be established by those credits which
would have been included in net income, or
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§ 1767.19
7 CFR Ch. XVII (1–1–12 Edition)
by a regulatory agency having rate jurisdiction. If, however, the deferral procedure provides that investment tax credits are not to
be passed on to customers, the proportionate
restorations to income shall be credited to
Account 420.
C. Subdivisions of this account, by department, shall be maintained for deferred investment tax credits that are related to nonelectric utility or other operations. Contra
entries affecting such account subdivisions
shall be appropriately recorded in Account
413, Expenses of Electric Plant Leased to
Others; or Account 414, Other Utility Operating Income. Use of deferral or nondeferral
accounting procedures adopted for nonelectric utility or other operations are to be followed on a consistent basis.
D. Separate records for electric and nonelectric utility or other operations 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
identification of items relating to each utility deductions.
281
A. This account shall include tax deferrals
resulting from adoption of the principles of
comprehensive interperiod tax allocation described in § 1767.15 (s) that relate to property
for which the utility has availed itself of the
use of accelerated (5-year) amortization of
(1) certified defense facilities as permitted by
Section 168 of the Internal Revenue Code,
and (2) certified pollution control facilities
as permitted by Section 169 of the Internal
Revenue Code.
B. This account shall be credited and Account 410.1, Provision for Deferred Income
Taxes, Utility Operating Income, or Account
410.2, Provision for Deferred Income Taxes,
Other Income and Deductions, as appropriate, shall be debited with tax effects related to property described in Paragraph A
above where taxable income is lower than
pretax accounting income due to differences
between the periods in which revenue and expense transactions affect taxable income and
the periods in which they enter into the determination of pretax accounting income.
C. This account shall be debited and Account 411.1, Provision for Deferred Income
Taxes—Credit, Utility Operating Income, or
Account 411.2, Provision for Deferred Income
Taxes-Credit, Other Income and Deductions,
as appropriate, shall be credited with taxes
related to property described in Paragraph A
above where taxable income is higher than
pretax accounting income due to differences
between the periods in which revenue and expense transactions affect taxable income and
the periods in which they enter into the determination of pretax accounting income.
D. 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 RUS. Upon the disposition
by sale, exchange, transfer, abandonment, or
premature retirement of plant on which
there is a related balance therein, this account shall be charged with an amount equal
to the related income tax expense, if any,
arising from such disposition and Account
411.1, Provision for Deferred Income Taxes—
Credit, Utility Operating Income, or Account
411.2, Provision for Deferred Income Taxes—
Credit, Other Income and Deductions, as appropriate, shall be credited. When the remaining balance, after consideration of any
related income tax expense, is less than
$25,000, this account shall be charged and Account 411.1 or Account 411.2, as appropriate,
credited with such balance. If after consideration of any related income tax expense,
there is a remaining amount of $25,000 or
Deferred Gains from Disposition of
Utility Plant
This account shall include gains from the
sale or other disposition of property previously recorded in Account 105, Electric
Plant Held for Future Use, under the provisions of Paragraphs B, C, and D thereof,
where such gains are significant and are to
be amortized over a period of 5 years, unless
otherwise authorized by RUS. The amortization of the amounts in this account shall be
made by credits to Account 411.6, Gains from
Disposition of Utility Plant. (See Account
105, Electric Plant Held for Future Use.)
257
Accumulated Deferred Income Taxes—
Accelerated Amortization Property
Unamortized Gain on Reacquired Debt
This account shall include the amounts of
discount realized upon reacquisition or redemption of long-term debt. The amounts in
this account shall be amortized in accordance with § 1767.15 (q).
SPECIAL INSTRUCTIONS
Accumulated Deferred Income Taxes
Before using the deferred tax accounts provided below, refer to § 1767.15 (r), Comprehensive Interperiod Income Tax Allocation. The
text of these accounts are designed primarily
to cover deferrals of Federal income taxes.
However, they are also to be used when making deferrals of state and local income taxes.
Utilities and licensees which, in addition to
an electric utility department, have another
utility department, gas or water and nonutility property, and which have deferred
taxes on income with respect thereto shall
separately classify such deferrals in the accounts provided below so as to allow ready
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§ 1767.19
more, RUS shall authorize or direct how
such amount shall be accounted for at the
time approval for the disposition of accounting is granted. When plant is disposed of by
transfer to a wholly owned subsidiary, the
related balance in this account shall also be
transferred. When the disposition relates to
retirement of an item or items under a group
method of depreciation where there is no tax
effect in the year of retirement, no entries
are required in this account if it can be determined that the related balances would be
necessary to be retained to offset future
group item tax deficiencies.
282
be credited. When the remaining balance
after consideration of any related tax expenses, is less than $25,000, this account shall
be charged and Account 411.1 or Account
411.2, as appropriate, credited with such balance. If after consideration any related income tax expense, there a remaining amount
of $25,00 or more, RUS shall authorize or direct how such amount shall be accounted for
at the time approval for the disposition of
accounting is granted. When plant is disposed of by transfer to a wholly owned subsidiary, the related balance in this account
shall also be transferred. When the disposition relates to retirement of an item or
items under a group method of depreciation
where there is no tax effect in the year of retirement, no entries are required in this account if it can be determined that the related balance would be necessary to be retained to offset future group item tax deficiencies.
Accumulated Deferred Income Taxes—
Other Property
A. This account shall include the tax deferrals resulting from adoption of the principle
of comprehensive interperiod income tax allocation described in § 1767.15 (r) which are
related to all property other than accelerated amortization property.
B. This account shall be credited and Account 410.1, Provision for Deferred Income
Taxes, Utility Operating Income, or Account
410.2, Provision for Deferred Income Taxes,
Other Income and Deductions, as appropriate, shall be debited with tax effects related to property described in Paragraph A
above where taxable income is lower than
pretax accounting income due to differences
between the periods in which revenue and expense transactions affect taxable income and
the periods in which they enter into the determination of pretax accounting income.
C. This account shall be debited and Account 411.1, Provision for Deferred Income
Taxes—Credit, Utility Operating Income, or
Account 411.2, Provision for Deferred Income
Taxes—Credit, Other Income and Deductions, as appropriate, shall be credited with
tax effects related to property described in
Paragraph A above where taxable income is
higher than pretax accounting income due to
differences between the periods in which revenue and expense transactions affect taxable
income and the periods in which they enter
into the determination of pretax accounting
income.
D. 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 RUS. Upon the disposition
by sale, exchange, transfer, abandonment, or
premature retirement of plant on which
there is a related balance herein, this account shall be charged with an amount equal
to the related income tax expense, if any,
arising from such disposition and Account
411.1, Provision for Deferred Income Taxes—
Credit, Utility Operating Income, or Account
411.2, Provision for Deferred Income Taxes—
Credit, Other Income and Deductions, shall
283
Accumulated Deferred Income Taxes—
Other
A. This account shall include all credit tax
deferrals resulting from the adoption of the
principles of comprehensive interperiod income tax allocation described in § 1767.15 (r)
other than those deferrals which are includible in Account 281, Accumulated Deferred
Income Taxes—Accelerated Amortization
Property, and Account 282, Accumulated Deferred Income Taxes—Other Property.
B. This account shall be credited and Account 410.1, Provision for Deferred Income
Taxes, Utility Operating Income, or Account
410.2, Provision for Deferred Income Taxes,
Other Income and Deductions, as appropriate, shall be debited with tax effects related to items described in Paragraph A
above where taxable income is lower than
pretax accounting income due to differences
between the periods in which revenue and expense transactions affect taxable income and
the periods in which they enter into the determination of pretax accounting income.
C. This account shall be debited and Account 411.1, Provision for Deferred Income
Taxes—Credit, Utility Operating Income or
Account 411.2, Provision for Deferred Income
Taxes—Credit, Other Income and Deductions, as appropriate, shall be credited with
tax effects related to items described in
Paragraph A above where taxable income is
higher than pretax accounting income due to
differences between the periods in which revenue and expense transactions affect taxable
income and the periods in which they enter
into the determination of pretax accounting
income.
D. 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.
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§ 1767.20
7 CFR Ch. XVII (1–1–12 Edition)
317
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 to any other account or make any use
thereof except as provided in the text of this
account, without prior approval of RUS.
Upon the disposition by sale, exchange,
transfer, abandonment, or premature retirement of items on which there is a related
balance herein, this account shall be charged
with an amount equal to the related income
tax effect, if any, arising from such disposition and Account 411.1, Provision For Deferred Income Taxes—Credit, Utility Operating Income, or Account 411.2, Provision
For Deferred Income Taxes-Credit, Other Income and Deductions, as appropriate, shall
be credited. When the remaining balance,
after consideration of any related tax expenses, is less than $25,000, this account shall
be charged and Account 411.1 or Account
411.2, as appropriate, credited with such balance. If after consideration of any related income tax expense, there is a remaining
amount of $25,000 or more, RUS shall authorize or direct how such amount shall be accounted for at the time approval for the disposition of accounting is granted.
When plant is disposed of by transfer to a
wholly owned subsidiary, the related balance
in this account shall also be transferred.
When the disposition relates to retirement of
an item or items under a group method of depreciation where there is no tax effect in the
year of retirement, no entries are required in
this account if it can be determined that the
related balance would be necessary to be retained to offset future group item tax deficiencies.
Nuclear Production
320 Land and Land Rights
321 Structures and Improvements
322 Reactor Plant Equipment
323 Turbogenerator Units
324 Accessory Electric Equipment
325 Miscellaneous Power Plant Equipment
326 Asset Retirement Costs for Nuclear Production Plant
Hydraulic Production
330 Land and Land Rights
331 Structures and Improvements
332 Reservoirs, Dams and Waterways
333 Water Wheels, Turbines and Generators
334 Accessory Electric Equipment
335 Miscellaneous Power Plant Equipment
336 Roads, Railroads and Bridges
337 Asset Retirement Costs for Hydraulic
Production Plant
Other Production
340 Land and Land Rights
341 Structures and Improvements
342 Fuel Holders, Producers and Accessories
343 Prime Movers
344 Generators
345 Accessory Electric Equipment
346 Miscellaneous Power Plant Equipment
347 Asset Retirement Costs for Other Production Plant
TRANSMISSION PLANT
350 Land and Land Rights
351 [Reserved]
352 Structures and Improvements
353 Station Equipment
354 Tower and Fixtures
355 Poles and Fixtures
356 Overhead Conductors and Devices
357 Underground Conduit
358 Underground Conductors and Devices
359 Roads and Trails
359.1 Asset Retirement Costs for Transmission Plant
[58 FR 59825, Nov. 10, 1993, as amended at 59
FR 27436, May 27, 1994; 60 FR 55430, Nov. 1,
1995; 73 FR 30283, May 27, 2008]
§ 1767.20
Asset Retirement Costs for Steam Production Plant
Plant accounts.
The plant accounts identified in this
section shall be used by all Rural Development borrowers.
DISTRIBUTION PLANT
INTANGIBLE PLANT
301
302
303
360
361
362
363
364
365
366
367
368
369
370
371
372
Land and Land Rights
Structures and Improvements
Station Equipment
Storage Battery Equipment
Poles, Towers and Fixtures
Overhead Conductors and Devices
Underground Conduit
Underground Conductors and Devices
Line Transformers
Services
Meters
Installations on Customers’ Premises
Leased Property on Customers’ Premises
373 Street Lighting and Signal Systems
Organization
Franchises and Consents
Miscellaneous Intangible Plant
PRODUCTION PLANT
Steam Production
310 Land and Land Rights
311 Structures and Improvements
312 Boiler Plant Equipment
313 Engines and Engine Driven Generators
314 Turbogenerator Units
315 Accessory Electric Equipment
316 Miscellaneous Power Plant Equipment
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374
§ 1767.20
Asset Retirement Costs for Distribution
Plant
in mergers, consolidations, or reorganizations, amounts previously included herein or
in similar accounts in the books of the companies concerned shall be excluded from this
account.
REGIONAL TRANSMISSION MARKET OPERATION
PLANT
380
381
382
383
384
385
Land and Land Rights
Structures and Improvements
Computer Hardware
Computer Software
Communication Equipment
Miscellaneous Regional Transmission
and Market Operation Plant
386 Asset Retirement Costs for Regional
Transmission and Market Operation
Plant
302
A. This account shall include amounts paid
to the Federal Government, to a state or to
a political subdivision thereof in consideration for franchises, consents, water power
licenses, 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, water power licenses, 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, water power license, 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
426.5, Other Deductions.
C. When any franchise has expired, the
book cost thereof shall be credited hereto
and charged to Account 426.5, Other Deductions, or to Account 111, Accumulated Provision for Amortization of Electric Utility
Plant, as appropriate.
D. Records supporting this account shall
be kept so as to show separately the book
cost of each franchise or consent.
GENERAL PLANT
389 Land and Land Rights
390 Structures and Improvements
391 Office Furniture and Equipment
392 Transportation Equipment
393 Stores Equipment
394 Tools, Shop and Garage Equipment
395 Laboratory Equipment
396 Power Operated Equipment
397 Communication Equipment
398 Miscellaneous Equipment
399 Other Tangible Property
399.1 Asset Retirement Costs for General
Plant
INTANGIBLE PLANT
301
Franchises and Consents
Organization
This account shall include all fees paid to
Federal or state governments for the privilege of incorporation and expenditures incident to organizing the corporation, partnership, or other enterprise and putting it into
readiness to do business.
Items
1. Cost of obtaining certificates authorizing an enterprise to engage in the publicutility business.
2. Fees and expenses for incorporation.
3. Fees and expenses for mergers or consolidations.
4. Office expenses incident to organizing
the utility.
5. Stock and minute books and corporate
seal.
NOTE: Annual or other periodic payments
under franchises shall not be included herein
but in the appropriate operating expense account.
303
Miscellaneous Intangible Plant
A. 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 426.5, Other Deductions, or Account
111, Accumulated Provision for Amortization
of Electric 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.
NOTE A: 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.
NOTE B: Exclude from this account and include in the appropriate expense account the
cost of preparing and filing papers in connection with the extension of the term of incorporation unless the first organization costs
have been written off. When charges are
made to this account for expenses incurred
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§ 1767.20
7 CFR Ch. XVII (1–1–12 Edition)
PRODUCTION PLANT
8. Gas-burning equipment, including holders, burner equipment and piping, and control equipment.
9. Instruments and devices, including all
measuring, indicating, and recording equipment for boiler plant service together with
mountings and supports.
10. Lighting systems.
11. Oil-burning equipment, including tanks,
heaters, pumps with drive, burner equipment
and piping, and control equipment.
12. Pulverized fuel equipment, including
pulverizers, accessory motors, primary air
fans, cyclones and ducts, dryers, pulverized
fuel bins, pulverized fuel conveyors and
equipment, burners, burner piping, priming
equipment, air compressors, and motors.
13. Stacks, including foundations and supports, stack steel and ladders, stack brickwork, stack concrete, stack lining, stack
painting (first), when set on separate foundations, independent of substructures or superstructures of building.
14. Station piping, including pipe, valves,
fittings, separators, traps, desuperheaters,
hangers, excavation, and covering for station
piping system, including all steam, condensate, boiler feed and water supply piping, but
not condensing water, plumbing, building
heating, oil, gas, air piping or piping specifically provided for in Account 313.
15. Stoker or equivalent feeding equipment, including stokers and accessory motors, clinker grinders, fans and motors.
16. Ventilating equipment.
17. Water purification equipment, including softeners and accessories, evaporators
and accessories, heat exchanges, filters,
tanks for filtered or softened water, pumps,
and motors.
18. Water-supply systems, including pumps,
motors, strainers, raw-water storage tanks,
boiler wash pumps, intake and discharge
pipes, and tunnels not a part of a building.
19. Wood fuel equipment, including hoppers, fuel hogs and accessories, elevators and
conveyors, bins and gates, spouts, measuring
equipment and associated drives.
Steam Production
310
Land and Land Rights
This account shall include the cost of land
and land rights used in connection with
steam-power generation. (See § 1767.16 (g).)
311
Structures and Improvements
This account shall include the cost, in
place, of structures and improvements used
in connection with steam-power generation.
(See § 1767.16 (h).)
NOTE: Include steam production roads and
railroads in this account.
312
Boiler Plant Equipment
This account shall include the cost installed of furnaces, boilers, coal and ash handling and coal preparing equipment, steam
and feed water piping, boiler apparatus, and
accessories used in the production of steam,
mercury, or other vapor, to be used primarily for generating electricity.
Items
1. Ash handling equipment, including hoppers, gates, cars, conveyors, hoists, sluicing
equipment, including pumps and motors,
sluicing water pipe and fittings, sluicing
trenches and accessories, except sluices
which are a part of a building.
2. Boiler feed system, including feed water
heaters, evaporator condensers, heater drain
pumps, heater drainers, deaerators, and vent
condensers, boiler feed pumps, surge tanks,
feed water regulators, feed water measuring
equipment, and all associated drives.
3. Boiler plant cranes and hoists and associated drives.
4. Boilers and equipment, including boilers
and baffles, economizers, superheaters, soot
blowers, foundations and settings, water
walls, arches, grates, insulation, blowdown
system, drying out of new boilers, also associated motors or other power equipment.
5. Breeching and accessories, including
breeching, dampers, soot spouts, hoppers and
gates, cinder eliminators, breeching insulation, soot blowers and associated motors.
6. Coal handling and storage equipment, including coal towers, coal lorries, coal cars,
locomotives and tracks when devoted principally to the transportation of coal, hoppers, downtakes, unloading and hoisting
equipment, skip hoists and conveyors, weighing equipment, magnetic separators, cable
ways, and housings and supports for coal
handling equipment.
7.
Draft
equipment,
including
air
preheaters and accessories, induced and
forced draft fans, air ducts, combustion control mechanisms, and associated motors or
other power equipment.
NOTE: When the system for supplying boiler or condenser water is elaborate, and when
it includes a dam, reservoir, canal, pipe line,
cooling ponds, or where gas or oil is used as
a fuel for producing steam and is supplied
through a pipe line system owned by the
utility, the cost of such special facilities
shall be charged to a subdivision of Account
311, Structures and Improvements.
313
Engines and Engine Driven Generators
This account shall include the cost installed of steam engines, reciprocating or rotary, and their associated auxiliaries; and
engine-driven
main
generators,
except
turbogenerator units.
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§ 1767.20
Items
valves and vacuum breakers, expansion devices, and screens.
4. Generator hydrogen, gas piping, and detrainment equipment.
5. Cooling system, including towers,
pumps, tanks, and piping.
6. Cranes and hoists, including items wholly identified with items listed herein.
7. Excitation system, when identified with
main generating units.
8. Fire-extinguishing systems.
9. Foundations and settings, especially
constructed for and not expected to outlast
the apparatus for which provided.
10. Governors.
11. Lighting systems.
12. Lubricating systems, including gauges,
filters, water separators, tanks, pumps, piping, and motors.
13. Mechanical meters, including gauges,
recording instruments, sampling and testing
equipment.
14. Piping-main exhaust, including connections between turbogenerator and condenser
and between condenser and hotwell.
15. Piping-main steam, including connections from main throttle valve to turbine
inlet.
16. Platforms, railings, steps, and gratings
appurtenant to apparatus listed herein.
17. Pressure oil systems, including accumulators, pumps, and piping motors.
18. Steelwork, specially constructed for apparatus listed herein.
19. Throttle and inlet valve.
20. Tunnels, intake and discharge, for condenser system, when not a part of structure,
and water screens.
21. Turbogenerators-main, including turbine and generator, field rheostats and electric connections for self-excited units.
22. Water screens and motors.
23. Moisture separator for turbine steam.
24. Turbine lubricating oil (initial charge).
1. Air cleaning and cooling apparatus, including blowers, drive equipment, air ducts,
not a part of building, louvers, pumps, and
hoods.
2. Belting, shafting, pulleys, and reduction
gearing.
3. Circulating pumps, including connections between condensers and intake and discharge tunnels.
4. Cooling system, including towers,
pumps, tank, and piping.
5. Condensers, including condensate pumps,
air and vacuum pumps, ejector unloading
valves and vacuum breakers, expansion devices, and screens.
6. Cranes and hoists, including items wholly identified with items listed herein.
7. Engines, reciprocating or rotary.
8. Fire-extinguishing systems.
9. Foundations and settings, especially
constructed for and not expected to outlast
the apparatus for which provided.
10. Generators-Main, a.c. or d.c., including
field rheostats and connections for self-excited units, and excitation systems when
identified with the generating unit.
11. Governors.
12. Lighting systems.
13. Lubricating systems, including gauges,
filters, tanks, pumps, piping, and motors.
14. Mechanical meters, including gauges,
recording instruments, sampling and testing
equipment.
15. Piping-main exhaust, including connections between generator and condenser and
between condenser and hotwell.
16. Piping-main stream, including connections from main throttle valve to turbine
inlet.
17. Platforms, railings, steps, and gratings
appurtenant to apparatus listed herein.
18. Pressure oil system, including accumulators, pumps, piping, and motors.
19. Throttle and inlet valve.
20. Tunnels, intake and discharge, for condenser system, when not a part of a structure.
21. Water screens and motors.
314
315
Accessory Electric Equipment
This account shall include the cost installed of auxiliary generating apparatus,
conversion equipment, and equipment used
primarily in connection with the control and
switching of electric energy produced by
steam power, and the protection of electric
circuits and equipment, except electric motors used to drive equipment included in
other accounts. Such motors shall be included in the account in which the equipment with which they are associated is included.
Turbogenerator Units
This account shall include the cost installed of main turbine-driven units and accessory equipment used in generating electricity by steam.
Items
1. Air leaning and cooling apparatus, including blowers, drive equipment, air ducts
not a part of building, louvers, pumps, and
hoods.
2. Circulating pumps, including connections between condensers and intake and discharge tunnels.
3. Condensers, including condensate pumps,
air and vacuum pumps, ejectors, unloading
Items
1. Auxiliary generators, including boards,
compartments, switching equipment, control
equipment, and connections to auxiliary
power bus.
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2. Excitation system, including motor, turbine and dual-drive exciter sets and rheostats, storage batteries and charging equipment, circuit breakers, panels and accessories, knife switches and accessories, surge
arresters, instrument shunts, conductors and
conduit, special supports for conduit, generator field and exciter switch panels, exciter
bus tie panels, generator and exciter rheostats and special housing and protective
screens.
3. Generator main connections, including
oil circuit breakers and accessories, disconnecting switches and accessories, operating mechanisms and interlocks, current
transformers, potential transformers, protective relays, isolated panels and equipment,
conductors and conduit, special supports for
generator main leads, grounding switch, and
special housings and protective screens.
4. Station buses including main, auxiliary,
transfer, synchronizing and fault ground
buses, including oil circuit breakers and accessories, disconnecting switches and accessories, operating mechanisms and interlocks,
reactors and accessories, voltage regulators
and accessories, compensators, resistors,
starting transformers, current transformers,
potential transformers, protective relays,
storage batteries and charging equipment,
isolated panels and equipment, conductors
and conduit, special supports, special
housings, concrete pads, general station
grounding system, special fire-extinguishing
system, and test equipment.
5. Station control system, including station switchboards with panel wiring, panels
with instruments and control equipment
only, panels with switching equipment
mounted or mechanically connected, trucktype boards complete, cubicles, station supervisory control boards, generator and exciter signal stands, temperature recording
devices, frequency-control equipment, master
clocks,
watt-hour
meters
and
synchronoscope in the turbine room, station
totalizing wattmeter, boiler-room load indicator equipment, storage batteries, panels
and charging sets, instrument transformers
for supervisory metering, conductors and
conduit, special supports for conduit, switchboards, batteries, special housing for batteries, protective screens, and doors.
about the steam generating plant devoted to
general station use, and which is not properly includible in any of the foregoing
steam-power production accounts.
Items
1. Compressed air and vacuum cleaning
systems, including tanks, compressors,
exhausters, air filters, and piping.
2. Cranes and hoisting equipment, including cranes, cars, crane rails, monorails, and
hoists with electric and mechanical connections.
3. Fire-extinguishing equipment for general station use.
4. Foundations and settings specially constructed for and not expected to outlast the
apparatus for which provided.
5. Locomotive cranes not includible elsewhere.
6. Locomotives not includible elsewhere.
7. Marine equipment, including boats and
barges.
8. Miscellaneous belts, pulleys, and
countershafts.
9. Miscellaneous equipment, including atmospheric and weather indicating devices,
intrasite communication equipment, laboratory equipment, signal systems, callophones,
emergency whistles and sirens, fire alarms,
insect-control equipment, and other similar
equipment.
10. Railway cars not includible elsewhere.
11. Refrigerating systems, including compressors, pumps, and cooling coils.
12. Station maintenance equipment, including lathes, shapers, planers, drill presses,
hydraulic presses, and grinders with motors,
shafting, hangers, and pulleys.
13. Ventilating equipment, including items
wholly identified with apparatus listed herein.
NOTE: When any item of equipment listed
herein is wholly used in connection with
equipment included in another account, its
cost shall be included in such other account.
317
This account shall include asset retirement costs on plant included in the steam
production function.
NOTE A: Do not include in this account
transformers and other equipment used for
changing the voltage or frequency of electricity for the purposes of transmission or
distribution.
NOTE B: When any item of equipment listed herein is used wholly to furnish power to
equipment included in another account, its
cost shall be included in such other account.
316
Asset Retirement Costs for Steam
Production Plant
Nuclear Production
320
Land and Land Rights
This account shall include the cost of land
and land rights used in connection with nuclear power generation. (See § 1767.16(g).)
321
Structures and Improvements
This account shall include the cost, in
place, of structures and improvements used
and useful in connection with nuclear power
generation. (See § 1767.16 (h).)
Miscellaneous Power Plant Equipment
This account shall include the cost installed of miscellaneous equipment in and
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§ 1767.20
NOTE: Include vapor containers and nuclear production roads and railroads in this
account.
322
15. Reactor coolant or moderator circulation charging, purification, and discharging
equipment, including tanks, pumps, heat exchangers, demineralizers, and storage.
16. Station piping, including pipes, valves,
fittings, separators, traps, desuperheaters,
hangers, excavation, and covering for station
piping system, including all-reactor coolant,
steam, condensate, boiler feed and water supply piping, but not condensing water, plumbing, building heating, oil, gas, or air piping.
17. Ventilating equipment.
18. Water purification equipment, including softeners, demineralizers and accessories, evaporators and accessories, heat exchangers, filters, tanks for filtered or softened water, pumps, and motors.
19. Water supply systems, including pumps,
motors, strainers, raw-water storage tanks,
boiler wash pumps, intake and discharge
pipes and tunnels not a part of a building.
20. Reactor plant cranes and hoists, and associated drives.
Reactor Plant Equipment
This account shall include the installed
cost of reactors, reactor fuel handling and
storage equipment, pressurizing equipment,
coolant charging equipment, purification
and discharging equipment, radioactive
waste treatment and disposal equipment,
boilers, steam and feed water piping, reactor
and boiler apparatus and accessories and
other reactor plant equipment used in the
production of steam to be used primarily for
generating electricity, including auxiliary
superheat boilers and associated equipment
in systems which change temperatures or
pressure of steam from the reactor system.
Items
1. Auxiliary superheat boilers and associated fuel storage handling preparation and
burning equipment. (See Account 312, Boiler
Plant Equipment, for items, but exclude
water supply, water flow lines, and steam
lines, as well as other equipment not strictly
within the superheat function.)
2. Boiler feed system, including feed water
heaters, evaporator condensers, heater drain
pumps, heater drainers, deaerators, and vent
condensers, boiler feed pumps, surge tanks,
feed water regulators, feed water measuring
equipment, and all associated drivers.
3. Boilers and heat exchangers.
4. Instruments and devices, including all
measuring, indicating, and recording equipment for reactor and boiler plant service together with mountings and supports.
5. Lighting systems.
6. Moderators, such as heavy water, and
graphite, initial charge.
7. Reactor coolant; primary and secondary
systems, initial charge.
8. Radioactive waste treatment and disposal equipment, including tanks, ion exchangers, incinerators, condensers, chimneys, and diluting fans and pumps.
9. Foundations and settings, especially
constructed for and not expected to outlast
the apparatus for which provided.
10. Reactor including shielding, control
rods and mechanisms.
11. Reactor fuel handling equipment, including manipulating and extraction tools,
underwater viewing equipment, seal cutting
and welding equipment, fuel transfer equipment, and fuel disassembly machinery.
12. Reactor fuel element failure detection
system.
13. Reactor emergency poison container
and injection system.
14. Reactor pressuring and pressure relief
equipment, including pressurizing tanks and
immersion heaters.
NOTE: When the system for supplying boiler or condenser water is elaborate, as when
it includes a dam, reservoir, canal, pipe
lines, or cooling ponds, the cost of such special facilities shall be charged to a subdivision of Account 321, Structures and Improvements.
323
Turbogenerator Units
This account shall include the cost installed of main turbine-driven units and accessory equipment used in generating electricity by steam.
Items
1. Air cleaning and cooling apparatus, including blowers, drive equipment, air ducts,
not a part of building, louvers, pumps, and
hoods.
2. Circulating pumps, including connections between condensers, and intake and
discharge tunnels.
3. Condensers, including condensate pumps,
air and vacuum pumps, ejectors, unloading
valves and vacuum breakers, expansion devices, and screens.
4. Generator hydrogen gas piping system
and hydrogen detrainment equipment, and
bulk hydrogen gas storage equipment.
5. Cooling system, including towers,
pumps, tanks, and piping.
6. Cranes and hoists, including items wholly identified with items listed herein.
7. Excitation system, when identified with
main generating units.
8. Fire extinguishing systems.
9. Foundations and settings, especially
constructed for and not expected to outlast
the apparatus for which provided.
10. Governors.
11. Lighting systems.
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12. Lubricating systems, including gauges,
filters, water separators, tanks, pumps, piping, and motors.
13. Mechanical meters, including gauges,
recording instruments, sampling and testing
equipment.
14. Piping-main steam, including connections between turbogenerator and condenser
and between condenser and hotwell.
15. Piping-main steam, including connections from main throttle valve to turbine
inlet.
16. Platforms, railings, steps, and gratings
appurtenant to apparatus listed herein.
17. Pressure oil systems, including accumulators, pumps, piping, and motors.
18. Steelwork, specially constructed for apparatus listed herein.
19. Throttle and inlet valve.
20. Tunnels, intake and discharge, for condenser system, when not a part of structure,
and water screens.
21. Turbogenerators-main, including turbine and generator, field rheostats and electric connections for self-excited units.
22. Water screens and motors.
23. Moisture separators for turbine steam.
24. Turbine lubricating oil, initial charge.
324
connecting switches and accessories, operating mechanisms and interlocks, current
transformers, potential transformers, protective relays, isolated panels and equipment,
conductors and conduit, special supports for
generator main leads, grounding switch, special housings and protective screens.
4. Station buses, including main, auxiliary,
transfer, synchronizing and fault ground
buses, including oil circuit breakers and accessories, operating mechanisms and interlocks, reactors and accessories, voltage regulators and accessories, compensators, resistors, starting transformers, current transformers, potential transformers, protective
relays, storage batteries and charging equipment, isolated panels and equipment, conductors and conduit, special supports, special
housings, concrete pads, general station
grounding system, fire-extinguishing system,
and test equipment.
5. Station control system, including station switchboards with panel wiring, panels
with instruments and control equipment
only, panels with switching equipment
mounted or mechanically connected, trucktype boards complete, cubicles, station supervisory control boards, generator and exciter signal stands, temperature recording
devices, frequency-control equipment, master
clocks,
watt-hour
meters
and
synchronoscope in the turbine room, station
totalizing wattmeter, boiler-room load indicator equipment, storage batteries, panels
and charging sets, instrument transformers
for supervisory metering, conductors and
conduit, special supports for conduit, switchboards, batteries, special housing for batteries, protective screens, and doors.
Accessory Electric Equipment
This account shall include the cost installed of auxiliary generating apparatus,
conversion equipment, and equipment used
primarily in connection with the control and
switching of electric energy produced by nuclear power, and the protection of electric
circuits and equipment, except electric motors used to drive equipment included in
other accounts. Such motors shall be included in the account in which the equipment with which they are associated is included.
NOTE: When any item of equipment listed
herein is used wholly to furnish power to
equipment included in another account, its
cost shall be included in such other account.
NOTE: Do not include in this account transformers and other equipment used for changing the voltage or frequency of electric energy for the purpose of transmission or distribution.
325
Miscellaneous Power Plant Equipment
This account shall include the cost installed of miscellaneous equipment in and
about the nuclear generating plant devoted
to general station use, which is not properly
includible in any of the foregoing nuclearpower production accounts.
Items
1. Auxiliary generators, including boards,
compartments, switching equipment, control
equipment, and connections to auxiliary
power bus.
2. Excitation system, including motor, turbine and dual-drive exciter sets and rheostats, storage batteries, and charging equipment, circuit breakers, panels and accessories, knife switches and accessories, surge
arresters, instrument shunts, conductors and
conduit, special supports for conduit, generator field and exciter switch panels, exciter
bus tie panels, generator and exciter rheostats and special housing and protective
screens.
3. Generator main connections, including
oil circuit breakers and accessories, dis-
Items
1. Compressed air and vacuum cleaning
systems, including tanks, compressors,
exhausters, air filters, and piping.
2. Cranes and hoisting equipment, including cranes, cars, crane rails, monorails, and
hoists with electric and mechanical connections.
3. Fire-extinguishing equipment for general station and site use.
4. Foundations and settings specially constructed for and not expected to outlast the
apparatus for which provided.
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§ 1767.20
5. Locomotive cranes not includible elsewhere.
6. Locomotives not included elsewhere.
7. Marine equipment, including boats and
barges.
8. Miscellaneous belts, pulleys, and
countershafts.
9. Miscellaneous equipment, including atmospheric and weather recording devices,
intrasite communication equipment, laboratory equipment, signal systems, callophones,
emergency whistles and sirens, fire alarms,
insect-control equipment, and other similar
equipment.
10. Railway cars or special shipping containers not includible elsewhere.
11. Refrigerating systems, including compressors, pumps, and cooling coils.
12. Station maintenance equipment, including lathes, shapers, planers, drill presses,
hydraulic presses, and grinders with motors,
shafting, hangers, and pulleys.
13. Ventilating equipment, including items
wholly identified with apparatus listed herein.
14. Station and area radiation monitoring
equipment.
tricity. It shall also include the cost in place
of facilities used in connection with (1) the
conservation of fish and wildlife, and (2)
recreation. Separate subaccounts shall be
maintained for each of the above. (See
§ 1767.16 (h)(3).)
Items
1. Bridges and culverts, when not a part of
roads or railroads.
2. Clearing and preparing land.
3. Dams, including wasteways, spillways,
flash boards, spillway gates with operating
and control mechanisms, tunnels, gate
houses, and fish ladders.
4. Dikes and embankments.
5. Electric system, including conductors,
control system, transformers, and lighting
fixtures.
6. Excavation, including shoring, bracing,
bridging, refill, and disposal of excess excavated material.
7. Foundations and settings specially constructed for and not expected to outlast the
apparatus for which provided.
8. Intakes, including trash racks, rack
cleaners, control gates and valves with operating mechanisms, and intake house when
not a part of station structure.
9. Platforms, railings, steps, and gratings
appurtenant to structures listed herein.
10. Power line wholly identified with items
included herein.
11. Retaining walls.
12. Water conductors and accessories, including canals, tunnels, flumes, penstocks,
pipe conductors, forebays, tailraces, navigation locks and operating mechanisms, waterhammer and surge tanks, and supporting
trestles and structures.
13. Water storage reservoirs, including
dams, flashboards, spillway gates and operating mechanisms, inlet and outlet tunnels,
regulating valves and valve towers, silt and
mud sluicing tunnels with valve or gate towers, and all other structures wholly identified with any of the foregoing items.
NOTE: When any item of equipment listed
herein is wholly used in connection with
equipment included in another account, its
cost shall be included in such other account.
326
Asset Retirement Costs for Nuclear
Production Plant
This account shall include asset retirement costs on plant included in the nuclear
production function.
Hydraulic Production
330
Land and Land Rights
This account shall include the cost of land
and land rights used in connection with hydraulic power generation. (See § 1767.16 (g).)
It shall also include the cost of land and land
rights used in connection with (1) the conservation of fish and wildlife, and (2) recreation. Separate subaccounts shall be maintained for each of the above.
331
333
Structures and Improvements
This account shall include the cost, in
place, of structures and improvements used
in connection with hydraulic power generation. (See § 1767.16 (h).) It shall also include
the cost, in place, of structures and improvements used in connection with (1) the conservation of fish and wildlife, and (2) recreation. Separate subaccounts shall be maintained for each of the above.
332
Water Wheels, Turbines and Generators
This account shall include the cost installed of water wheels and hydraulic turbines (from connection with penstock or
flume to tailrace) and generators driven
thereby devoted to the production of electricity by water power or for the production
of power for industrial or other purposes, if
the equipment used for such purposes is a
part of the hydraulic power plant works.
Items
1. Exciter water wheels and turbines, including runners, gates, governors, pressure
regulators, oil pumps, operating mechanisms, scroll cases, draft tubes, and drafttube supports.
2. Fire-extinguishing equipment.
Reservoirs, Dams, and Waterways
This account shall include the cost in place
of facilities used for impounding, collecting,
storage, diversion, regulation, and delivery
of water used primarily for generating elec-
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§ 1767.20
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3. Foundations and settings, specially constructed for and not expected to outlast the
apparatus for which provided.
4. Generator cooling system, including air
cooling and washing apparatus, air fans and
accessories, and air ducts.
5. Generators-main, a.c. or d.c., including
field rheostats and connections for self-excited units and excitation system when identified with the generating unit.
6. Lighting systems.
7. Lubricating systems, including gauges,
filters, tanks, pumps, and piping.
8. Main penstock valves and appurtenances, including main valves, control
equipment, bypass valves and fittings, and
other accessories.
9. Main turbines and water wheels, including runners, gates, governors, pressure regulators, oil pumps, operating mechanisms,
scroll cases, draft tubes, and draft-tube supports.
10. Mechanical meters and recording instruments.
11. Miscellaneous water-wheel equipment,
including gauges, thermometers, meters, and
other instruments.
12. Platforms, railings, steps, and gratings
appurtenant to apparatus listed herein.
13. Scroll case filling and drain system, including gates, pipe, valves, and fittings.
14. Water-actuated pressure-regulator system, including tanks and housings, pipes,
valves, fittings and insulators, piers and anchorage, and excavation and backfill.
334
3. Generator main connections, including
oil circuit breakers and accessories, disconnecting switches and accessories, operating mechanisms and interlocks, current
transformers, potential transformers, protective relays, isolated panels and equipment,
conductors and conduit, special supports for
generator main leads, grounding switch, and
special housings and protective screens.
4. Station buses, including main, auxiliary,
transfer, synchronizing, and fault ground
buses, including oil circuit breakers and accessories, disconnecting switches and accessories, operating mechanisms and interlocks,
reactors and accessories, voltage regulators
and accessories, compensators, resistors
starting transformers, current transformers,
potential transformers, protective relays,
storage batteries, and charging equipment,
isolated panels and equipment, conductors
and conduit, special supports, special fire-extinguishing system, and test equipment.
5. Station control system, including station switchboards with panel wiring, panels
with instruments and control equipment
only, panels with switching equipment
mounted for mechanically connected, trucktype boards complete, cubicles, station supervisory control devices, frequency control
equipment, master clocks, watt-hour meter,
station totalizing watt-meter, storage batteries, panels and charging sets, instrument
transformers for supervisory metering, conductors and conduit, special supports for
conduit, switchboards, batteries, special
housings for batteries, protective screens,
and doors.
Accessory Electric Equipment
NOTE A: Do not include in this account
transformers and other equipment used for
changing the voltage or frequency of electricity for the purpose of transmission or
distribution.
NOTE B: When any item of equipment listed herein is used wholly to furnish power to
equipment, it shall be included in such
equipment account.
This account shall include the cost installed of auxiliary generating apparatus,
conversion equipment, and equipment used
primarily in connection with the control and
switching of electric energy produced by hydraulic power and the protection of electric
circuits and equipment, except electric motors used to drive equipment included in
other accounts, such motors being included
in the account in which the equipment with
which they are associated is included.
335
Miscellaneous Power Plant Equipment
This account shall include the cost installed of miscellaneous equipment in and
about the hydroelectric generating plant
which is devoted to general station use and
is not properly includible in other hydraulic
production accounts. It shall also include the
cost of equipment used in connection with (1)
the conservation of fish and wildlife, and (2)
recreation. Separate subaccounts shall be
maintained for each of the above.
Items
1. Auxiliary generators, including boards,
compartments, switching equipment, control
equipment, and connections to auxiliary
power bus.
2. Excitation system, including motor, turbine, and dual-drive exciter sets and rheostats, storage batteries and charging equipment, circuit breakers, panels and accessories, knife switches and accessories, surge
arresters, instrument shunts, conductors and
conduit, special supports for conduit, generator field and exciter switch panels, exciter
bus tie panels, generator and exciter rheostats and special housings and protective
screens.
Items
1. Compressed air and vacuum cleaning
systems, including tanks, compressors,
exhausters, air filters, and piping.
2. Cranes and hoisting equipment, including cranes, cars, crane rails, monorails, and
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hoists with electric and mechanical connections.
3. Fire-extinguishing equipment for general station use.
4. Foundations and settings, specially constructed for and not expected to outlast the
apparatus for which provided.
5. Locomotive cranes not includible elsewhere.
6. Locomotives not includible elsewhere.
7. Marine equipment, including boats and
barges.
8. Miscellaneous belts, pulleys, and
countershafts.
9. Miscellaneous equipment, including atmospheric and weather indicating devices.
Intrasite communication equipment, laboratory equipment, insect control equipment,
signal systems, callophones, emergency
whistles and sirens, fire alarms, and other
similar equipment.
10. Railway cars, not includible elsewhere.
11. Refrigerating system, including compressors, pumps, and cooling coils.
12. Station maintenance equipment, including lathes, shapers, planers, drill presses,
hydraulic presses, and grinders with motors,
shafting, hangers, and pulleys.
13. Ventilating equipment, including items
wholly identified with apparatus listed herein.
tivities, shall not be included herein but in
Account 331, Structures and Improvements.
NOTE B: The cost of temporary roads and
bridges necessary during the period of construction but abandoned or dedicated to public use upon completion of the plant, shall
not be included herein but shall be charged
to the accounts appropriate for the construction.
NOTE: When any item of equipment, listed
herein, is used wholly in connection with
equipment included in another account, its
cost shall be included in such other account.
This account shall include the cost installed of fuel handling and storage equipment used between the point of fuel delivery
to the station and the intake pipe through
which fuel is directly drawn to the engine,
also the cost of gas producers and accessories
devoted to the production of gas for use in
prime movers driving main electric generators.
336
337
Asset Retirement Costs for Hydraulic
Production Plant
This account shall include asset retirement costs on plant included in the hydraulic production function.
Other Production
340
Land and Land Rights
This account shall include the cost of land
and land rights used in connection with
other power generation. (See § 1767.16 (g).)
341
Structures and Improvements
This account shall include the cost in place
of structures and improvements used in connection with other power generation. (See
§ 1767.16 (h).)
342
Roads, Railroads, and Bridges
This account shall include the cost of
roads, railroads, trails, bridges, and trestles
used primarily as production facilities. It
also includes those roads necessary to connect the plant with highway transportation
systems, except when such roads are dedicated to public use and maintained by public
authorities.
Fuel Holders, Producers, and
Accessories
Items
1. Blower and fans.
2. Boilers and pumps.
3. Economizers.
4. Exhauster outfits.
5. Flues and piping.
6. Pipe system.
7. Producers.
8. Regenerators.
9. Scrubbers.
10. Steam injectors.
11. Tanks for storage of oil and gasoline.
12. Vaporizers.
Items
1. Bridges, including foundations, piers,
girders, trusses, and flooring.
2. Clearing land.
3. Railroads, including grading, ballast,
ties, rails, culverts, and hoists.
4. Roads, including grading, surfacing, and
culverts.
5. Structures, constructed and maintained
in connection with items listed herein.
6. Trails, including grading, surfacing, and
culverts.
7. Trestles, including foundations, piers,
girders, trusses, and flooring.
343
Prime Movers
This account shall include the cost installed of Diesel or other prime movers devoted to the generation of electric energy,
together with their auxiliaries.
Items
NOTE A: Roads intended primarily for connecting employees’ houses with the power
plant, and roads used primarily in connection with fish and wildlife, and recreation ac-
1. Air-filtering system.
2. Belting, shafting, pulleys, and reduction
gearing.
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3. Cooling system, including towers,
pumps, tanks, and piping.
4. Cranes and hoists, including items wholly identified with apparatus listed herein.
5. Engines, Diesel, gasoline, gas, or other
internal combustion.
6. Foundations and settings specially constructed for and not expected to outlast the
apparatus for which provided.
7. Governors.
8. Ignition system.
9. Inlet valve.
10. Lighting systems.
11. Lubricating systems, including filters,
tanks, pumps, and piping.
12. Mechanical meters, including gauges,
recording instruments, sampling, and testing
equipment.
13. Mufflers.
14. Piping.
15. Starting systems, compressed air, or
other, including compressors and drives,
tanks, piping, motors, boards and connections, and storage tanks.
16. Steelwork, specially constructed for apparatus listed herein.
17. Waste heat boilers and antifluctuators.
344
protection of electric circuits and equipment, except electric motors used to drive
equipment included in other accounts. Such
motors shall be included in the account in
which the equipment with which it is associated is included.
Items
1. Auxiliary generators, including boards,
compartments, switching equipment, control
equipment, and connections to auxiliary
power bus.
2. Excitation system, including motor, turbine and dual-drive exciter sets and rheostats, storage batteries and charging equipment, circuit breakers, panels and accessories, knife switches and accessories, surge
arresters, instrument shunts, conductors and
conduit, special supports for conduit, generator field and exciter switch panels, exciter
bus tie panels, generator and exciter rheostats and special housings and protective
screens.
3. Generator main connections, including
oil circuit breakers and accessories, disconnecting switches and accessories, operating mechanisms and interlocks, current
transformers, potential transformers, protective relays, isolated panels and equipment,
conductors and conduit, special supports for
generator main leads, grounding switch, and
special housing and protective screens.
4. Station control system, including station switchboards with panel wiring, panels
with instruments and control equipment
only, panels with switching equipment
mounted or mechanically connected, trunktype boards complete, cubicles, station supervisory control boards, generator and exciter signal stands, temperature-recording
devices, frequency control equipment, master clocks, watt-hour meter, station totalizing wattmeter, storage batteries, panels
and charging sets, instrument transformers
for supervisory metering, conductors and
conduit, special supports for conduit, switchboards, batteries, special housing for batteries, protective screens, and doors.
5. Station buses, including main, auxiliary,
transfer, synchronizing and fault ground
buses, including oil circuit breakers and accessories, disconnecting switches and accessories, operating mechanisms and interlocks,
reactors and accessories, voltage regulators
and accessories, compensators, resistors,
starting transformers, current transformers,
potential transformers, protective relays,
storage batteries and charging equipment,
isolated panels and equipment, conductors
and conduit, special supports, special
housings, concrete pads, general station
ground system, special fire-extinguishing
system, and test equipment.
Generators
This account shall include the cost installed of Diesel or other power driven main
generators.
Items
1. Cranes and hoists, including items wholly identified with such apparatus.
2. Fire-extinguishing equipment.
3. Foundations and settings, specially constructed for and not expected to outlast the
apparatus for which provided.
4. Generator cooling system, including air
cooling and washing apparatus, air fans and
accessories, and air ducts.
5. Generators-main, a.c. or d.c., including
field rheostats and connections for self-excited units and excitation system when identified with the generating unit.
6. Lighting systems.
7. Lubricating system, including tanks, filters, strainers, pumps, piping, and coolers.
8. Mechanical meters and recording instruments.
9. Platforms, railings, steps, and gratings
appurtenant to apparatus listed herein.
NOTE: If prime movers and generators are
so integrated that it is not practical to classify them separately, the entire unit may be
included in Account 344, Generators.
345
Accessory Electric Equipment
This account shall include the cost installed of auxiliary generating apparatus,
conversion equipment, and equipment used
primarily in connection with the control and
switching of electric energy produced in
other power generating stations, and the
NOTE A: Do not include in this account
transformers and other equipment used for
changing the voltage or frequency of electric
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§ 1767.20
351 [Reserved]
energy for the purpose of transmission or
distribution.
NOTE B: When any item of equipment listed herein is used wholly to furnish power to
equipment included in another account, its
cost shall be included in such other account.
346
352
Structures and Improvements
This account shall include the cost, in
place, of structures and improvements used
in connection with transmission operations.
(See § 1767.16 (h).)
Miscellaneous Power Plant Equipment
353
This account shall include the cost installed of miscellaneous equipment in and
about the other power generating plant, devoted to general station use, and not properly includible in any of the foregoing other
power production accounts.
Station Equipment
This account shall include the cost installed of transforming, conversion, and
switching equipment used for the purpose of
changing the characteristics of electricity in
connection with its transmission or for controlling transmission circuits.
Items
Items
1. Compressed air and vacuum cleaning
systems, including tanks, compressors,
exhausters, air filters, and piping.
2. Cranes and hoisting equipment, including cranes, cars, crane rails, monorails, and
hoists with electric and mechanical connections.
3. Fire-extinguishing equipment for general station use.
4. Foundations and settings, specially constructed for and not expected to outlast the
apparatus for which provided.
5. Miscellaneous equipment, including atmospheric and weather indicating devices,
intrasite communication equipment, laboratory equipment, signal systems, callophones,
emergency whistles and sirens, fire alarms,
and other similar equipment.
6. Miscellaneous belts, pulleys, and
countershafts.
7. Refrigerating systems including compressors, pumps, and cooling coils.
8. Station maintenance equipment, including lathes, shapers, planters, drill presses,
hydraulic presses, and grinders with motors,
shafting, hangers, or pulleys.
9. Ventilating equipment, including items
wholly identified with apparatus listed herein.
1. Bus compartments, concrete, brick, and
sectional steel, including items permanently
attached thereto.
2. Conduit, including concrete and iron
duct runs not a part of a building.
3. Control equipment, including batteries,
battery charging equipment, transformers,
remote relay boards, and connections.
4. Conversion equipment, including transformers, indoor and outdoor, frequency
changers, motor generator sets, rectifiers,
synchronous converters, motors, cooling
equipment, and associated connections.
5. Fences.
6. Fixed and synchronous condensers, including transformers, switching equipment,
blowers, motors and connections.
7. Foundations and settings, specially constructed for and not expected to outlast the
apparatus for which provided.
8. General station equipment, including air
compressors, motors, hoists, cranes, test
equipment, and ventilating equipment.
9. Platforms, railings, steps, and gratings
appurtenant to apparatus listed herein.
10. Primary and secondary voltage connections, including bus runs and supports,
insulators, potheads, lightning arresters,
cable and wire runs from and to outdoor connections or to manholes and the associated
regulators, reactors, resistors, surge arresters, and accessory equipment.
11. Switchboards, including meters, relays,
and control wiring.
12. Switching equipment, indoor and outdoor, including oil circuit breakers and operating mechanisms, truck switches, and disconnect switches.
13. Tools and appliances.
NOTE: When any item of equipment, listed
herein is used wholly in connection with
equipment included in another account, its
cost shall be included in such other account.
347
Asset Retirement Costs for Other
Production Plant
This account shall include asset retirement costs on plant included in the other
production function.
354
TRANSMISSION PLANT
350
Towers and Fixtures
This account shall include the cost installed of towers and appurtenant fixtures
used for supporting overhead transmission
conductors.
Land and Land Rights
Items
This account shall include the cost of land
and land rights used in connection with
transmission operations. (See § 1767.16 (g).)
1. Anchors, guys, and braces.
2. Brackets.
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3. Crossarms, including braces.
4. Excavation, backfill, and disposal of excess excavated material.
5. Foundations.
6. Guards.
7. Insulator pins and suspension bolts.
8. Ladder and steps.
9. Railings.
10. Towers.
355
3. Foundations and settings specially constructed for and not expected to outlast the
apparatus for which provided.
4. Lighting systems.
5. Manholes, concrete or brick, including
iron or steel, frames and covers, hatchways,
gratings, ladders, cable racks and hangers,
permanently attached to manholes.
6. Municipal inspection.
7. Pavement disturbed, including cutting
and replacing pavement, pavement base and
sidewalks.
8. Permits.
9. Protection of street openings.
10. Removal and relocation of subsurface
obstructions.
11. Sewer connections, including drains,
traps, tide valves, and check valves.
12. Sumps, including pumps.
13. Ventilating equipment.
Poles and Fixtures
This account shall include the cost installed of transmission line poles, wood,
steel, concrete, or other material, together
with appurtenant fixtures used for supporting overhead transmission conductors.
Items
1. Anchors, head arm and other guys, including guy guards, guy clamps, strain
insulators, and pole plates.
2. Brackets.
3. Crossarms and braces.
4. Excavation and backfill, including disposal of excess excavated material.
5. Extension arms.
6. Gaining, roofing, stenciling, and tagging.
7. Insulator pins and suspension belts.
8. Paving.
9. Pole steps.
10. Poles, wood, steel, concrete, or other
material.
11. Racks complete with insulators.
12. Reinforcing and stubbing.
13. Settings.
14. Shaving and painting.
356
358
Items
1. Armored conductors, buried, including
insulators, insulating materials, splices, potheads, and trenching.
2. Armored conductors, submarine, including insulators, insulating materials, splices
in terminal chambers, and potheads.
3. Cables in standpipe, including pothead
and connection from terminal chamber of
manhole to insulators on pole.
4. Circuit breakers.
5. Fireproofing, in connection with any
items listed herein.
6. Hollow-core oil-filled cable, including
straight or stop joints, pressure tanks, auxiliary air tanks, feeding tanks, terminals, potheads and connections, and ventilating
equipment.
7. Lead and fabric covered conductors, including insulators, compound filled, oil
filled, or vacuum splices, and potheads.
8. Lightning arresters.
9. Municipal inspection.
10. Permits.
11. Protection of street openings.
12. Racking of cables.
13. Switches.
14. Other line devices.
Overhead Conductors and Devices
This account shall include the cost installed of overhead conductors and devices
used for transmission purposes.
Items
1. Circuit breakers.
2. Conductors, including insulated and bare
wires and cables.
3. Ground wires and ground clamps.
4. Insulators, including pin, suspension,
and other types.
5. Lightning arresters.
6. Switches.
7. Other line devices.
357
Underground Conductors and Devices
This account shall include the cost installed of underground conductors and devices used for transmission purposes.
Underground Conduit
This account shall include the cost installed of underground conduit and tunnels
used for housing transmission cables or
wires. (See § 1767.16 (n).)
359
Roads and Trails
This account shall include the cost of
roads, trails, and bridges used primarily as
transmission facilities.
Items
Items
1. Conduit, concrete, brick or tile, including iron pipe, fiber pipe, Murray duct, and
standpipe on pole or tower.
2. Excavation, including shoring, bracing,
bridging, backfill, and disposal of excess excavated material.
1. Bridges, including foundation piers, girders, trusses, and flooring.
2. Clearing land.
3. Roads, including grading, surfacing, and
culverts.
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§ 1767.20
4. Structures, constructed and maintained
in connection with items included herein.
5. Trails, including grading, surfacing, and
culverts.
8. General station equipment, including air
compressors, motors, hoists, cranes, test
equipment, and ventilating equipment.
9. Platforms, railings, steps, and gratings
appurtenant to apparatus listed herein.
10. Primary and secondary voltage connections, including bus runs and supports,
insulators, potheads, lightning arresters,
cable and wire runs from and to outdoor connections or to manholes and the associated
regulators, reactors, resistors, surge arresters, and accessory equipment.
11. Switchboards, including meters, relays,
and control wiring.
12. Switching equipment, indoor and outdoor, including oil circuit breakers and operating mechanisms, truck switches, disconnect switches.
NOTE: The cost of temporary roads, and
bridges necessary during the period of construction but abandoned or dedicated to public use upon completion of the plant, shall be
charged to the accounts appropriate for the
construction.
359.1
Asset Retirement Costs for
Transmission Plant
This account shall include asset retirement costs on plant included in the transmission plant function.
DISTRIBUTION PLANT
360
Land and Land Rights
NOTE: The cost of rectifiers, series transformers, and other special station equipment
devoted exclusively to street lighting service
shall not be included in this account, but in
Account 373, Street Lighting and Signal Systems.
This account shall include the cost of land
and land rights used in connection with distribution operations. (See § 1767.16 (g).)
NOTE: Do not include the cost of permits to
erect poles, or towers or to trim trees in this
account. (See Account 364, Poles, Towers and
Fixtures, and Account 365, Overhead Conductors and Devices.)
361
363 Storage Battery Equipmentis account
shall include the cost installed of storage
battery equipment used for the purpose of
supplying electricity to meet emergency or
peak demands.
Structures and Improvements
This account shall include the cost, in
place, of structures and improvements used
in connection with distribution operations.
(See § 1767.16 (h).)
362
Items
1. Batteries, including elements, tanks,
and tank insulators.
2. Battery room connections, including
cable or bus runs and connections.
3. Battery room flooring, when specially
laid for supporting batteries.
4. Charging equipment, including motor
generator sets and other charging equipment
and connections, and cable runs from generator or station bus to battery room connections.
5. Miscellaneous equipment, including instruments, and water stills.
6. Switching equipment, including endcell
switches and connections, boards and panels,
used exclusively for battery control, not part
of general station switchboard.
7. Ventilating equipment, including fans
and motors, louvers, and ducts not part of
building.
Station Equipment
This account shall include the cost installed of station equipment, including
transformer banks, which are used for the
purpose of changing the characteristics of
electricity in connection with its distribution.
Items
1. Bus compartments, concrete, brick and
sectional steel, including items permanently
attached thereto.
2. Conduit, including concrete and iron
duct runs not part of building.
3. Control equipment, including batteries,
battery charging equipment, transformers,
remote relay boards, and connections.
4. Conversion equipment, indoor and outdoor, frequency changers, motor generator
sets, rectifiers, synchronous converters, motors, cooling equipment, and associated connections.
5. Fences.
6. Fixed and synchronous condensers, including transformers, switching equipment,
blowers, motors, and connections.
7. Foundations and settings, specially constructed for and not expected to outlast the
apparatus for which provided.
NOTE: Storage batteries used for control
and general station purposes shall not be included in this account but in the account appropriate for their use.
364
Poles, Towers and Fixtures
This account shall include the cost installed of poles, towers, and appurtenant fixtures used for supporting overhead distribution conductors and service wires.
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Items
2. Excavation, including shoring, bracing,
bridging, backfill, and disposal of excess excavated material.
3. Foundations and settings specially constructed for and not expected to outlast the
apparatus for which constructed.
4. Lighting systems.
5. Manholes, concrete or brick, including
iron or steel frames and covers, hatchways,
gratings, ladders, cable racks, and hangers
permanently attached to manholes.
6. Municipal inspection.
7. Pavement disturbed, including cutting
and replacing pavement, pavement base, and
sidewalks.
8. Permits.
9. Protection of street openings.
10. Removal and relocation of subsurface
obstructions.
11. Sewer connections, including drains,
traps, tide valves, and check valves.
12. Sumps, including pumps.
13. Ventilating equipment.
1. Anchors, head arm, and other guys, including guy guards, guy clamps, strain
insulators, and pole plates.
2. Brackets.
3. Crossarms and braces.
4. Excavation and backfill, including disposal of excess excavated material.
5. Extension arms.
6. Foundations.
7. Guards.
8. Insulator pins and suspension bolts.
9. Paving.
10. Permits for construction.
11. Pole steps and ladders.
12. Poles, wood, steel, concrete, or other
material.
13. Racks complete with insulators.
14. Railings.
15. Reinforcing and stubbing.
16. Settings.
17. Shaving, painting, gaining, roofing,
stenciling, and tagging.
18. Towers.
19. Transformer racks and platforms.
365
NOTE: The cost of underground conduit
used solely for street lighting or signal systems shall be included in Account 373, Street
Lighting and Signal Systems.
Overhead Conductors and Devices
This account shall include the cost installed of overhead conductors and devices
used for distribution purposes.
367
Items
1. Circuit breakers.
2. Conductors, including insulated and bare
wires and cables.
3. Ground wires and clamps.
4. Insulators, including pin, suspension,
and other types, and tie wire or clamps.
5. Lightning arresters.
6. Railroad and highway crossing guards.
7. Splices.
8. Switches.
9. Tree trimming, initial cost including the
cost of permits therefor.
10. Other line devices.
11. Oil circuit reclosers (OCR).
12. Sectionalizers.
13. Labor costs for installation of OCRs and
Sectionalizers, first only.
Items
1. Armored conductors, buried, including
insulators, insulating materials, splices, potheads, and trenching.
2. Armored conductors, submarine, including insulators, insulating materials, splices
in terminal chamber, and potheads.
3. Cables in standpipe, including pothead
and connection from terminal chamber or
manhole to insulators on pole.
4. Circuit breakers.
5. Fireproofing, in connection with any
items listed herein.
6. Hollow-core oil-filled cable, including
straight or stop joints, pressure tanks, auxiliary air tanks, feeding tanks, terminals, potheads and connections.
7. Lead and fabric covered conductors, including insulators, compound-filled, oilfilled or vacuum splices, and potheads.
8. Lightning arresters.
9. Municipal inspection.
10. Permits.
11. Protection of street openings.
12. Racking of cables.
13. Switches.
14. Other line devices.
NOTE: The cost of conductors used solely
for street lighting or signal systems shall
not be included in this account but in Account 373, Street Lighting and Signal Systems.
366
Underground Conductors and Devices
This account shall include the cost installed of underground conductors and devices used for distribution purposes.
Underground Conduit
This account shall include the cost installed of underground conduit and tunnels
used for housing distribution cables or wires.
Items
NOTE: The cost of underground conductors
and devices used solely for street lighting or
signal systems shall be included in Account
373, Street Lighting and Signal Systems.
1. Conduit, concrete, brick and tile, including iron pipe, fiber pipe, Murray duct, and
standpipe on pole or tower.
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§ 1767.20
Line Transformers
370
A. This account shall include the cost installed of overhead and underground distribution line transformers and pole-type
and underground voltage regulators owned
by the utility, for use in transforming electricity to the voltage at which it is to be
used by the customer, whether actually in
service or held in reserve.
B. When a transformer is permanently retired from service, the original installed cost
thereof shall be credited to this account.
C. The records covering line transformers
shall be so kept that the utility can furnish
the number of transformers of various capacities in service and those in reserve, and the
location and the use of each transfer.
Items
1. Alternate current, watt-hour meters.
2. Current limiting devices.
3. Demand indicators.
4. Demand meters.
5. Direct current watt-hour meters.
6. Graphic demand meters.
7. Installation, labor of (first installation
only).
8. Instrument transformers.
9. Maximum demand meters.
10. Meter badges and their attachments.
11. Meter boards and boxes.
12. Meter fittings, connections, and shelves
(first set).
13. Meter switches and cut-outs.
14. Prepayment meters.
15. Protective devices.
16. Testing new meters.
Items
1. Installation, labor of (first installation
only).
2. Transformer cut-out boxes.
3. Transformer lightning arresters.
4. Transformers, line and network.
5. Capacitors.
6. Network protectors.
7. Voltage regulators.
NOTE: The cost of removing and resetting
line transformers shall not be charged to
this account but to Account 583, Overhead
Line Expenses, or Account 584, Underground
Line Expenses, as appropriate. The cost of
line transformers used solely for street lighting or signal systems shall be included in Account 373, Street Lighting and Signal Systems.
369
Meters
A. This account shall include the cost installed of meters or devices and appurtenances thereto, for use in measuring the
electricity delivered to its users, whether actually in service or held in reserve.
B. When a meter is permanently retired
from service, the installed cost included
herein shall be credited to this account.
C. The records covering meters shall be so
kept that the utility can furnish information
as to the number of meters of various capacities in service and in reserve as well as the
location of each meter owned.
NOTE A: This account shall not include meters for recording output of a generating station, or substation meters. It includes only
those meters used to record energy delivered
to customers.
NOTE B: The cost of removing and resetting
meters shall be charged to Account 586,
Meter Expenses.
Services
This account shall include the cost installed of overhead and underground conductors leading from a point where wires leave
the last pole of the overhead system or the
distribution box or manhole, or the top of
the pole of the distribution line, to the point
of connection with the customer’s outlet or
wiring. Conduit used for underground service
conductors shall be included herein.
371
Installations on Customers’ Premises
This account shall include the cost installed of equipment on the customer’s side
of a meter when the utility incurs such cost
and when the utility retains title to and assumes full responsibility for maintenance
and replacement of such property. This account shall not include leased equipment.
(See Account 372, Leased Property on Customers’ Premises.)
Items
1. Brackets.
2. Cables and wires.
3. Conduit.
4. Insulators.
5. Municipal inspection.
6. Overhead to underground, including conduit or standpipe and conductor from last
splice on pole to connection with customer’s
wiring.
7. Pavement disturbed, including cutting
and replacing pavement, pavement base, and
sidewalks.
8. Permits.
9. Protection of street openings.
10. Service switch.
11. Suspension wire.
Items
1. Cable vaults.
2. Commercial lamp equipment.
3. Foundations and settings specially provided for equipment included herein.
4. Frequency changer sets.
5. Motor generator sets.
6. Motors.
7. Switchboard panels, high or low tension.
8. Wire and cable connections to incoming
cables.
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§ 1767.20
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NOTE: Do not include in this account any
costs incurred in connection with merchandising, jobbing, or contract work activities.
372
381
Leased Property on Customers’
Premises
382
This account shall include the cost of electric motors, transformers, and other equipment on customers’ premises (including municipal corporations), leased or loaned to
customers, but not including property held
for sale.
Items
1. Personal computers
2. Servers
3. Workstations
4. Energy Management System (EMS)
hardware
5. Supervisory Control and Data Acquisition (SCADA) system hardware
6. Peripheral equipment
7. Networking components
Street Lighting and Signal Systems
This account shall include the cost installed of equipment used wholly for public
street and highway lighting or traffic, fire
alarm, police, and other signal systems.
Items
1. Armored conductors, buried or submarine, including insulators, insulating materials, splices, and trenching.
2. Automatic control equipment.
3. Conductors, overhead or underground,
including lead or fabric covered, parkway cables, including splices, and insulators.
4. Lamps, arc, incandescent, or other
types, including glassware, suspension fixtures, and brackets.
5. Municipal inspection.
6. Ornamental lamp posts.
7. Pavement disturbed, including cutting
and replacing pavement, pavement base, and
sidewalks.
8. Permits.
9. Posts and standards.
10. Protection of street openings.
11. Relays or time clocks.
12. Series contactors.
13. Switches.
14. Transformers, pole or underground.
374
383
Computer Software
This account shall include the cost of offthe-shelf and in-house developed software
purchased and used to provide scheduling,
system control and dispatching, system
planning, standards development, market
monitoring, and market administration activities. Records shall be maintained identifying to the maximum extent practicable the
cost of software used for:
(1) Scheduling, system control and dispatching,
(2) System planning and standards development, and
(3) Market monitoring and market administration activities.
Items
1. Software licenses
2. User interface software
3. Modeling software
4. Database software
5. Tracking and monitoring software
6. Energy Management System (EMS) software
7. Supervisory Control and Data Acquisition (SCADA) system software
8. Evaluation and assessment system software
9. Operating, planning and transaction
scheduling software
10. Reliability applications
11. Market application software
Asset Retirement Costs for Distribution
Plant
This account shall include asset retirement costs on plant included in the distribution plant function.
REGIONAL TRANSMISSION AND MARKET
OPERATION PLANT
380
Computer Hardware
This account shall include the cost of computer hardware and miscellaneous information technology equipment to provide scheduling, system control and dispatching, system planning, standards development, market monitoring, and market administration
activities. Records shall be maintained identifying to the maximum extent practicable
computer hardware owned and used for:
(1) Scheduling, system control and dispatching, (2) System planning and standards
development, and (3) Market monitoring and
market administration activities.
NOTE A: The cost of setting and connecting
such appliances or equipment on the premises of customers and the cost of resetting or
removal shall not be charged to this account
but to operating expenses, Account 587, Customer Installations Expenses.
NOTE B: Do not include in this account any
costs incurred in connection with merchandising, jobbing, or contract work activities.
373
Structures and Improvements
This account shall include the cost in place
of structures and improvement used for regional transmission and market operations.
Land and Land Rights
This account shall include the cost of land
and land rights used in connection with regional transmission and market operations.
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§ 1767.20
Communication Equipment
392
This account shall include the cost of communication equipment owned and used to acquire or share data and information used to
control and dispatch the system.
Items
Items
1.
2.
3.
4.
5.
6.
7.
8.
9.
1. Fiber optic cable
2. Remote terminal units
3. Microwave towers
4. Global Positioning System (GPS) equipment
5. Servers
6. Workstations
7. Telephones
385
Transportation Equipment
This account shall include the cost of
transportation vehicles used for utility purposes.
Miscellaneous Regional Transmission
and Market Operation Plant
Airplanes.
Automobiles.
Bicycles.
Electrical vehicles.
Motor trucks.
Motorcycles.
Repair cars or trucks.
Tractors and trailers.
Other transportation vehicles.
393
Stores Equipment
This account shall include the cost of
equipment used for the receiving, shipping,
handling, and storage of materials and supplies.
This account shall include the cost of regional transmission and market operation
plant and equipment not provided for elsewhere.
Items
386 Asset Retirement Costs for Regional
Transmission and Market Operation Plant
1. Chain falls.
2. Counters.
3. Cranes (portable).
4. Elevating and stacking equipment (portable).
5. Hoists.
6. Lockers.
7. Scales.
8. Shelving.
9. Storage bins.
10. Trucks, hand and power driven.
11. Wheelbarrows.
This account shall include asset retirement costs on regional transmission and
market operations plant and equipment.
GENERAL PLANT
389
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
§ 1767.16 (g).)
390
394
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 § 1767.16 (h).)
391
Tools, Shop and Garage Equipment
This account shall include the cost of
tools, implements, and equipment used in
construction, repair work, general shops and
garages and not specifically provided for or
includible in other accounts.
Structures and Improvements
Items
1. Air compressors.
2. Anvils.
3. Automobile repair shop equipment.
4. Battery charging equipment.
5. Belts, shafts and countershafts.
6. Boilers.
7. Cable pulling equipment.
8. Concrete mixers.
9. Drill presses.
10. Derricks.
11. Electric equipment.
12. Engines.
13. Forges.
14. Furnaces.
15. Foundations and settings specially constructed for and not expected to outlast the
equipment for which provided.
16. Gas producers.
17. Gasoline pumps, oil pumps, and storage
tanks.
18. Greasing tools and equipment.
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, and typewriters.
8. Safes.
9. Tables.
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§ 1767.20
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
7 CFR Ch. XVII (1–1–12 Edition)
Hoists.
Ladders.
Lathes.
Machine tools.
Motor-driven tools.
Motors.
Pipe threading and cutting tools.
Pneumatic tools.
Pumps.
Riveters.
Smithing equipment.
Tool racks.
Vises.
Welding apparatus.
Work benches.
395
3. Boring machines.
4. Bulldozers.
5. Cranes and hoists.
6. Diggers.
7. Engines.
8. Pile drivers.
9. Pipe cleaning machines.
10. Pipe coating or wrapping machines.
11. Tractors-Crawler type.
12. Trenchers.
13. Other power operated equipment.
NOTE: It is intended that this account include only such large units as are generally
self-propelled or mounted on movable equipment.
Laboratory Equipment
397
This account shall include the cost installed of laboratory equipment used for general laboratory purposes and not specifically
provided for or includible in other departmental or functional plant accounts.
Communication Equipment
This account shall include the cost installed of telephone, telegraph, and wireless
equipment for general use in connection with
utility operations.
Items
Items
1. Ammeters.
2. Current batteries.
3. Frequency changers.
4. Galvanometers.
5. Inductometers.
6. Laboratory standard millivolt meters.
7. Laboratory standard volt meters.
8. Meter-testing equipment.
9. Millivolt meters.
10. Motor generator sets.
11. Panels.
12. Phantom loads.
13. Portable graphic ammeters, voltmeters,
and wattmeters.
14. Portable loading devices.
15. Potential batteries.
16. Potentiometers.
17. Rotating standards.
18. Standard cell, reactance, resistor, and
shunt.
19. Switchboards.
20. Synchronous timers.
21. Testing panels.
22. Testing resistors.
23. Transformers.
24. Voltmeters.
25. Other testing, laboratory, or research
equipment not provided for elsewhere.
1. Antennae.
2. Booths.
3. Cables.
4. Distributing boards.
5. Extension cords.
6. Gongs.
7. Hand sets, manual and dial.
8. Insulators.
9. Intercommunicating sets.
10. Loading coils.
11. Operators’ desks.
12. Poles and fixtures used wholly for telephone or telegraph wire.
13. Radio transmitting and receiving sets.
14. Remote control equipment and lines.
15. Sending keys.
16. Storage batteries.
17. Switchboards.
18. Telautograph circuit connections.
19. Telegraph receiving sets.
20. Telephone and telegraph circuits.
21. Testing instruments.
22. Towers.
23. Underground conduit used wholly for
telephone or telegraph wires and cable wires.
396
398
Miscellaneous Equipment
This account shall include the cost of
equipment, and apparatus used in the utility
operations, which is not includible in other
accounts.
Power Operated Equipment
This account shall include the cost of
power operated equipment used in construction or repair work exclusive of equipment
includible in other accounts. Include, also,
the tools and accessories acquired for use
with such equipment and the vehicle on
which such equipment is mounted.
Items
1.
2.
3.
4.
5.
6.
7.
8.
Items
1. Air compressors, including driving unit
and vehicle.
2. Back filling machines.
Hospital and infirmary equipment.
Kitchen equipment.
Employees’ recreation equipment.
Radios.
Restaurant equipment.
Soda fountains.
Operators’ cottage furnishings.
Other miscellaneous equipment.
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Rural Utilities Service, USDA
§ 1767.21
NOTE: Miscellaneous equipment of the nature indicated above wherever practicable,
shall be included in the utility plant accounts on a functional basis.
399
409 [Reserved]
409.1 Income Taxes, Utility Operating Income
409.2 Income Taxes, Other Income and Deductions
409.3 Income Taxes, Extraordinary Items
410 [Reserved]
410.1 Provision for Deferred Income Taxes,
Utility Operating Income
410.2 Provision for Deferred Income Taxes,
Other Income and Deductions
411 [Reserved]
411.1 Provision for Deferred Income Taxes—
Credit, Utility Operating Income
411.2 Provision for Deferred Income Taxes—
Credit, Other Income and Deductions
411.3 [Reserved]
411.4 Investment Tax Credit Adjustments,
Utility Operations
411.5 Investment Tax Credit Adjustments,
Nonutility Operations
411.6 Gains from Disposition of Utility
Plant
411.7 Losses from Disposition of Utility
Plant
411.8 Gains from Disposition of Allowances
411.9 Losses from Disposition of Allowances
411.10 Accretion Expense
412 Revenues from Electric Plant Leased to
Others
413 Expenses of Electric Plant Leased to
Others
414 Other Utility Operating Income
Other Tangible Property
This account shall include the cost of tangible utility plant not provided for elsewhere.
399.1 Asset Retirement Costs for General Plant
This account shall include asset retirement costs on plant included in the general
plant function.
[58 FR 59825, Nov. 10, 1993, as amended at 73
FR 30284, May 27, 2008]
§ 1767.21 Operating income.
The operating income accounts identified in this section shall be used by
all RUS borrowers.
UTILITY OPERATING INCOME
400 Operating Revenues
401 Operation Expense
402 Maintenance Expense
403 Depreciation Expense
403.1 Depreciation Expense—Steam Production Plant
403.2 Depreciation Expense—Nuclear Production Plant
403.3 Depreciation Expense—Hydraulic Production Plant
403.4 Depreciation Expense—Other Production Plant
403.5 Depreciation Expense—Transmission
Plant
403.6 Depreciation
Expense—Distribution
Plant
403.7 Depreciation Expense—General Plant
403.8 Depreciation Expense-Asset Retirement Costs
403.9 Depreciation Expense-Regional Transmission and Market Operation Plant
404 Amortization of Limited-Term Electric
Plant
405 Amortization of Other Electric Plant
406 Amortization of Electric Plant Acquisition Adjustments
407 Amortization of Property Losses, Unrecovered Plant and Regulatory Study
Costs
407.3 Regulatory Debits
407.4 Regulatory Credits
408 Taxes Other than Income Taxes
408.1 Taxes—Property
408.2 Taxes—U.S. Social Security—Unemployment
408.3 Taxes—U.S. Social Security—F.I.C.A.
408.4 Taxes—State Social Security—Unemployment
408.5 Taxes—State Sales—Consumers
408.6 Taxes—Gross Revenue or Gross Receipts Tax
408.7 Taxes—Other
UTILITY OPERATING INCOME
400
Operating Revenues
There shall be shown under this caption
the total amount included in the electric operating revenue accounts provided herein.
401
Operation Expense
There shall be shown under this caption
the total amount included in the electric operation expense accounts provided herein.
(See note to § 1767.17 (c).)
402
Maintenance Expense
There shall be shown under this caption
the total amount included in the electric
maintenance expense accounts provided
herein.
403
Depreciation Expense
A. This account shall include the amount
of depreciation expense for all classes of depreciable electric plant in service except
such depreciation expense as is chargeable to
clearing accounts or to Account 416, Costs
and Expenses of Merchandising, Jobbing and
Contract Work.
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 aid in estimating probable
service life by mortality, turnover, or other
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§ 1767.21
7 CFR Ch. XVII (1–1–12 Edition)
appropriate methods; and also such records
as will reflect the percentage of salvage and
costs of removal for property retired from
each account, or subdivision thereof, for depreciable electric plant.
and which is not subject to charges for depreciation expense.
B. This account shall be supported in such
detail as to show the amortization applicable
to each investment being amortized, together with the book cost of the investment
and the period over which it is being written
off.
NOTE A: Depreciation expense applicable to
property included in Account 104, Electric
Plant Leased to Others, shall be charged to
Account 413, Expenses of Electric Plant
Leased to Others.
NOTE B: Depreciation expenses applicable
to transportation equipment, shop equipment, tools, work equipment, power operated
equipment, and other general equipment
may be charged to clearing accounts as necessary in order to obtain a proper distribution of expenses between construction and
operation.
NOTE C: Depreciation expense applicable to
transportation equipment used for transportation of fuel from the point of acquisition
to the unloading point shall be charged to
Account 151, Fuel Stock.
This account shall be debited or credited,
as appropriate, with amounts includible in
operating expenses, pursuant to approval or
order of RUS, for the purpose of providing
for the extinguishment of the amount in Account 114, Electric Plant Acquisition Adjustments.
C. Account 403 shall be subaccounted as
follows:
403.1 Depreciation Expense—Steam Production Plant
403.2 Depreciation Expense—Nuclear Production Plant
403.3 Depreciation Expense—Hydraulic Production Plant
403.4 Depreciation Expense—Other Production Plant
403.5 Depreciation Expense—Transmission
Plant
403.6 Depreciation
Expense—Distribution
Plant
403.7 Depreciation Expense—General Plant
403.8 Depreciation Expense-Asset Retirement Costs
403.9 Depreciation Expense-Regional Transmission and Market Operation Plant
This account shall be debited, when appropriate, with the amounts credited to Account 254, Other Regulatory Liabilities, to
record regulatory liabilities imposed on the
utility by the ratemaking actions of regulatory agencies. This account shall also be
debited, when appropriate, with the amounts
credited to Account 182.3, Other Regulatory
Assets, concurrent with the recovery of such
amounts in rates.
404
406
407 Amortization of Property Losses, Unrecovered Plant and Recovery Study Costs
This account shall be charged with
amounts credited to Account 182.1, Extraordinary Property Losses, when RUS has authorized the amount in the latter account to
be amortized by charges to electric operations.
407.3
407.4
Regulatory Debits
Regulatory Credits
This account shall be credited, when appropriate, with the amounts debited to Account
182.3, Other Regulatory Assets, to establish
regulatory assets. This account shall also be
credited,
when
appropriate,
with
the
amounts debited to Account 254, Other Regulatory Liabilities, concurrent with the return of such amounts to customers through
rates.
Amortization of Limited-Term Electric
Plant
This account shall include amortization
charges applicable to amounts included in
the electric plant accounts for limited-term
franchises, licenses, patent rights, limitedterm 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. (See Account 111, Accumulated Provision for Amortization of Electric Utility Plant.)
405
Amortization of Electric Plant
Acquisition Adjustments
408
Taxes Other Than Income Taxes
A. This account shall include the amounts
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. These accounts shall be charged in each
accounting period with the amounts of taxes
which are applicable thereto, with concurrent credits to Account 236, Taxes Accrued,
or Account 165, Prepayments, as appropriate.
When it is not possible to determine the
Amortization of Other Electric Plant
A. When authorized by RUS, this account
shall include charges for amortization of intangible or other electric utility plant which
does not have a definite or terminable life
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Rural Utilities Service, USDA
§ 1767.21
exact amounts of taxes, the amounts shall be
estimated and adjustments made in current
accruals as the actual tax levies become
known.
C. The charges to these accounts 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 more than one utility service, taxes of
the kind includible in these accounts 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 after appropriate study to determine such basis.
409 [Reserved]
SPECIAL INSTRUCTIONS
Accounts 409.1, 409.2, and 409.3
A. These accounts shall include the
amount of local, 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 amounts of taxes become
known, the current tax accruals shall be adjusted by charges or credits to these accounts.
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
tax effects relating to interest charges shall
be allocated between utility and nonutility
operations. The basis for this allocation
shall be the ratio of net investment in utility plant to net investment in nonutility
plant.
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 and retirement activities shall
be included in the cost of construction or the
retirement.
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
payroll taxes shall be charged to nonutility
operations, the specific functional operations, maintenance, and administrative expense accounts, and to construction and retirement activities on a basis related to payroll either directly or by transfers from this
account.
NOTE E: Property taxes applicable to the
various utility functions shall be charged to
the specific functional operations and administrative expense accounts either directly or by transfers from this account.
NOTE F: Interest on tax refunds or deficiencies shall not be included in these accounts but in Account 419, Interest and Dividend Income, or Account 431, Other Interest
Expense, as appropriate.
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 these accounts but in Account 419, Interest and Dividend Income, or Account 431, Other Interest
Expense, as appropriate.
409.1
Income Taxes, Utility Operating
Income
This account shall include the amount of
those local, state, and Federal 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), Utility Plant Leased to Others, and Other Utility
Operating Income.
D. Account 408 shall be subaccounted as
follows:
409.2
408.1 Taxes—Property
408.2 Taxes—U.S. Social Security—Unemployment
408.3 Taxes—U.S. Social Security—F.I.C.A.
408.4 Taxes—State Social Security—Unemployment
408.5 Taxes—State Sales—Consumers
408.6 Taxes—Gross Revenue or Gross Receipts Tax
408.7 Taxes—Other
Income Taxes, Other Income and
Deductions
This account shall include the amount of
those local, state, and Federal income taxes
(both positive and negative), which relate to
Other Income and Deductions.
409.3
Income Taxes, Extraordinary Items
This account shall include the amount of
those local, state, and Federal income taxes
(both positive and negative), which relate to
Extraordinary Items.
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§ 1767.21
7 CFR Ch. XVII (1–1–12 Edition)
410 [Reserved]
Account 255, Accumulated Deferred Investment Tax Credits, 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. Account 411.4 shall be credited with the
amounts debited to Account 255 for proportionate amounts of tax credit deferrals allocated over the average useful life of electric
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. Account 411.5 shall be debited and credited as directed in paragraphs A and B, for
investment tax credits related to nonutility
property.
SPECIAL INSTRUCTIONS
Accounts 410.1, 410.2, 411.1, and 411.2
A. Accounts 410.1 and 410.2 shall be debited,
and Accumulated Deferred Income Taxes,
shall be credited, with amounts equal to any
current deferrals of taxes on income or any
allocations of deferred taxes originating in
prior periods, as provided by the texts of Accounts 190, 281, 282, and 283. There shall not
be netted against entries required to be made
to these accounts any credit amounts appropriately includible in Account 411.1 or Account 411.2.
B. Accounts 411.1 or 411.2 shall be credited,
and Accumulated Deferred Income Taxes,
shall be debited, with amounts equal to any
allocations of deferred taxes originating in
prior periods or any current deferrals of
taxes on income, as provided by the texts of
Accounts 190, 281, 282, and 283. There shall
not be netted against entries required to be
made to these accounts any debit amounts
appropriately includible in Account 410.1 or
Account 410.2.
410.1
411.4
This account shall include the amount of
those investment tax credit adjustments related to property used in Utility Operations
(by department).
411.5
Provision for Deferred Income Taxes,
Utility Operating Income
411.6
Provision for Deferred Income Taxes,
Other Income and Deductions
Gains from Disposition of Utility
Plant
A. This account shall include, as approved
by RUS, amounts relating to gains from the
disposition of future use utility plant including amounts which were previously recorded
in and transferred from Account 105, Electric
Plant Held for Future Use, under the Provisions of Paragraphs B, C, and D thereof. Income taxes relating to gains recorded in this
account shall be recorded in Account 409.1,
Income Taxes, Utility Operating Income.
B. The utility shall record in this account
gains resulting from the settlement of asset
retirement obligations related to utility
plant in accordance with the accounting prescribed in Sec. 1767.15(y).
This account shall include the amounts of
those deferrals of taxes and allocations of deferred taxes which relate to Other Income
and Deductions.
411 [Reserved]
411.1
Investment Tax Credit Adjustments,
Nonutility Operations
This account shall include the amount of
those investment tax credit adjustments related to property used in Nonutility Operations.
This account shall include the amounts of
those deferrals of taxes and allocations of deferred taxes which relate to Utility Operating Income (by department).
410.2
Investment Tax Credit Adjustments,
Utility Operations
Provision for Deferred Income Taxes—
Credit, Utility Operating Income
This account shall include the amounts of
those allocations of deferred taxes and deferrals of taxes, credit, which relate to Utility
Operating Income (by department).
411.2 Provision for Deferred Income Taxes—
Credit, Other Income and Deductions
411.7
This account shall include the amounts of
those allocations of deferred taxes and deferrals of taxes, credit, which relate to Other
Income and Deductions.
Losses from Disposition of Utility
Plant
A. This account shall include, as approved
by RUS, amounts relating to losses from the
disposition of future use utility plant including amounts which were previously recorded
in and transferred from Account 105, Electric
Plant Held for Future Use, under the provisions of Paragraphs B, C, and D thereof. Income taxes relating to losses recorded in this
account shall be recorded in Account 409.1,
Income Taxes, Utility Operating Income.
B. The utility shall record in this account
losses resulting from the settlement of asset
411.3 [Reserved]
SPECIAL INSTRUCTIONS
Accounts 411.4 and 411.5
A. Account 411.4 shall be debited with the
amounts of investment tax credits related to
electric utility property that are credited to
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Rural Utilities Service, USDA
§ 1767.22
414
retirement obligations related to utility
plant in accordance with the accounting prescribed in Sec. 1767.15(y).
411.8
Gains from Disposition of Allowances
This account shall be credited with the
gain on the sale, exchange, or other disposition of allowances in accordance with
§ 1767.15 (u)(8). Income taxes relating to gains
recorded in this account shall be recorded in
Account 409.1, Income Taxes, Utility Operating Income.
411.9
NOTE: Related taxes shall be recorded in
Account 408, Taxes Other Than Income
Taxes, or Account 409.1, Income Taxes, Utility Operating Income, as appropriate.
Losses from Disposition of Allowances
[58 FR 59825, Nov. 10, 1993, as amended at 62
FR 42290, Aug. 6, 1997; 73 FR 30285, May 27,
2008]
This account shall be debited with the loss
on the sale, exchange, or other disposition of
allowances in accordance with § 1767.15 (u)(8).
Income taxes relating to losses recorded in
this account shall be recorded in Account
409.1, Income Taxes, Utility Operating Income.
411.10
§ 1767.22 Other income and deductions.
The other income and deductions accounts identified in this section shall
be used by all RUS borrowers.
Accretion Expense
This account shall be charged for accretion
expense on the liabilities associated with
asset retirement obligations included in Account 230, Asset Retirement Obligations, relating to electric utility plant.
412
OTHER INCOME AND DEDUCTIONS
415
Revenues from Merchandising, Jobbing,
and Contract Work
416 Costs and Expenses of Merchandising,
Jobbing, and Contract Work
417 Revenues from Nonutility Operations
417.1 Expenses of Nonutility Operations
418 Nonoperating Rental Income
418.1 Equity in Earnings of Subsidiary Companies
419 Interest and Dividend Income
419.1 Allowance for Funds Used During Construction
420 Investment Tax Credits
421 Miscellaneous Nonoperating Income
421.1 Gain on Disposition of Property
421.2 Loss on Disposition of Property
422 Nonoperating Taxes
423 Generation and Transmission Cooperative Capital Credits
424 Other Capital Credits and Patronage
Capital Allocations
425 Miscellaneous Amortization
426 [Reserved]
426.1 Donations
426.2 Life Insurance
426.3 Penalties
426.4 Expenditures for Certain Civic, Political, and Related Activities
426.5 Other Deductions
Revenues from Electric Plant Leased to
Others
This account shall include revenues from
electric property constituting a distinct operating unit or system leased by the utility
to others, and which property is properly includible in Account 104, Electric Plant
Leased to Others.
NOTE: Related taxes shall be recorded in
Account 408, Taxes Other Than Income
Taxes, or Account 409.1, Income Taxes, Utility Operating Income, as appropriate.
413
Expenses of Electric Plant Leased to
Others
A. This account shall include expenses
from electric property constituting a distinct operating unit or system leased by the
utility to others, and which property is properly includible in Account 104, Electric Plant
Leased to Others.
B. The detail of expenses shall be kept or
supported so as to show separately the following:
1.
2.
3.
4.
Other Utility Operating Income
A. This account shall include the revenues
received and expenses incurred in connection
with the operations of utility plant, the book
cost of which is included in Account 118,
Other Utility Plant.
B. The expenses shall include every element of cost incurred in such operations, including depreciation, rents, and insurance.
OTHER INCOME AND DEDUCTIONS
Operation.
Maintenance.
Depreciation.
Amortization.
415
Revenues from Merchandising, Jobbing
and Contract Work
A. This account shall include 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
NOTE: Related taxes shall be recorded in
Account 408, Taxes Other Than Income
Taxes, or Account 409.1, Income Taxes, Utility Operating Income, as appropriate.
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§ 1767.22
7 CFR Ch. XVII (1–1–12 Edition)
another for a stipulated profit or commission. Interest related income from installment sales shall be recorded in Account 419,
Interest and Dividend Income.
B. Records in support of this account shall
be so kept as to permit ready summarization
of revenues by such major items as are feasible.
12. Supervising merchandise and jobbing
operations.
13. Advertising in newspapers, periodicals,
radio, and television.
14. Cost of merchandise sold and of materials used in jobbing work.
15. Stores expenses on merchandise and
jobbing stocks.
16. Fees and expenses of advertising and
commercial artists’ agencies.
17. Printing booklets, dodgers, and other
advertising data.
18. Premiums given as inducement to buy
appliances.
19. Light, heat, and power.
20. Depreciation on equipment used primarily for merchandise and jobbing operations.
21. Rent of sales rooms or of equipment.
22. Transportation expense in delivery and
pick-up of appliances by utility’s facilities or
by others.
23. Stationery and office supplies and expenses.
24. Losses from uncollectible merchandise
and jobbing accounts.
NOTE: The classification of revenues of
merchandising, jobbing, and contract work
as nonoperating, and thus included in this
account, is for accounting purposes. It does
not preclude consideration of justification to
the contrary for ratemaking or other purposes.
Items
1. Revenues from sale of merchandise and
from jobbing and contract work.
2. Discounts and allowances made in settlement of bills for merchandise and jobbing
work.
416
Costs and Expenses of Merchandising,
Jobbing and Contract Work
A. This account shall include all expenses
derived from the sale of merchandise and
jobbing or contract work.
B. Records in support of this account shall
be so kept as to permit ready summarization
of costs and expenses by such major items as
are feasible.
417
Revenues from Nonutility Operations
This account shall include revenues applicable to operations which are nonutility in
character but nevertheless constitute a distinct operating activity of the enterprise as
a whole, such as the operation of an ice department where applicable statutes do not
define such operation as a utility, or the operation of a servicing organization for furnishing supervision, management, engineering, and similar services to others.
NOTE: The classification of costs and expenses of merchandising, jobbing, and contract work as nonoperating, and thus included in this account, is for accounting purposes. It does not preclude consideration of
justification to the contrary for ratemaking
or other purposes.
NOTE: Related taxes shall be recorded in
Account 408, Taxes Other Than Income
Taxes, or Account 409.2, Income Taxes, Other
Income and Deductions, as appropriate.
Items
Labor:
1. Canvassing and demonstrating appliances in homes and other places for the purpose of selling appliances.
2. Demonstrating and selling activities in
sales rooms.
3. Installing appliances on customer premises where such work is done only for purchasers of appliances from the utility.
4. Installing wire, piping, or other property
work, on a jobbing or contract basis.
5. Preparing advertising materials for appliance sales purposes.
6. Receiving and handling customer orders
for merchandise or for jobbing services.
7. Cleaning and tidying sales rooms.
8. Maintaining display counters and other
equipment used in merchandising.
9. Arranging merchandise in sales rooms
and decorating display windows.
10. Reconditioning repossessed appliances.
11. Bookkeeping and other clerical work in
connection with merchandise and jobbing activities.
417.1
Expenses of Nonutility Operations
A. This account shall include expenses applicable to operations which are nonutility
in character but nevertheless constitute a
distinct operating activity of the enterprise
as a whole, such as the operation of an ice
department where applicable statutes do not
define such operation as a utility, or the operation of a servicing organization for furnishing supervision, management, engineering, and similar services to others.
B. The expenses shall include all elements
of costs incurred in such operations, and the
accounts shall be maintained so as to permit
ready summarization as follows:
1. Operation.
2. Maintenance.
3. Rents.
4. Depreciation.
5. Amortization.
NOTE: Related taxes shall be recorded in
Account 408, Taxes Other Than Income
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Rural Utilities Service, USDA
§ 1767.22
420
Taxes, or Account 409.2, Income Taxes, Other
Income and Deductions, as appropriate.
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 or Account
417.1.
B. The expenses shall include all elements
of costs incurred in the ownership and rental
of property and the accounts shall be maintained so as to permit ready summarization
as follows:
1.
2.
3.
4.
5.
Operation.
Maintenance.
Rents.
Depreciation.
Amortization.
421
NOTE: Related taxes shall be recorded in
Account 408, Taxes Other Than Income
Taxes, or Account 409.2, Income Taxes, Other
Income and Deductions, as appropriate.
418.1
Equity in Earnings of Subsidiary
Companies
Items
1. Profit on sale of timber. (See § 1767.16
(g)(3).)
2. Profits from operations of others realized by the utility under contracts.
3. Gains on disposition of investments.
Also, gains on reacquisition and resale or retirement of the utility’s debt securities when
the gain is not amortized or used by a jurisdictional regulatory agency to reduce embedded debt cost in establishing rates. (See
§ 1767.15 (q).)
4. This account shall include the accretion
expense on the liability for an asset retirement obligation included in Account 230,
Asset Retirement Obligations, related to
nonutility plant.
5. This account shall include the depreciation expense for asset retirement costs related to nonutility plant.
6. The utility shall record in this account
gains resulting from the settlement of asset
retirement obligations related to nonutility
plant in accordance with the accounting prescribed in § 1767.15(y).
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.
NOTE A: Related taxes shall be recorded in
Account 408, Taxes Other Than Income
Taxes, or Account 409.2, Income Taxes, Other
Income and Deductions, as appropriate.
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 credited to this account.
419.1
Miscellaneous Nonoperating Income
This account shall include all revenue and
expense items, except taxes properly includible in the income account, not provided for
elsewhere. Related taxes shall be recorded in
Account 408, Taxes Other Than Income
Taxes, or Account 409.2, Income Taxes, Other
Income and Deductions, as appropriate.
This account shall include the utility’s equity in the earnings or losses of subsidiary
companies for the year.
419
Investment Tax Credits
This account shall be credited as follows
with investment tax credit amounts not
passed on to customers:
1. By amounts equal to debits to Account
411.4, Investment Tax Credit Adjustments,
Utility Operations, and Account 411.5, Investment Tax Credit Adjustments, Nonutility Operations, for investment tax credits used in calculating income taxes for the
year when the company’s accounting provides for non-deferral of all or a portion of
such credits.
2. By amounts equal to debits to Account
255, Accumulated Deferred Investment Tax
Credits, for proportionate amounts of tax
credit deferrals allocated over the average
useful life of the property to which the tax
credits relate, or such lesser period of time
as may be adopted and consistently used by
the company.
421.1
Allowance for Funds Used During
Construction
Gain on Disposition of Property
This account shall be credited with the
gain on the sale, conveyance, exchange, or
transfer of utility or other property to another. Amounts relating to gains on land and
land rights held for future use recorded in
Account 105, Electric Plant Held for Future
Use, will be accounted for as prescribed in
Paragraphs B, C, and D thereof. (See § 1767.16
This account shall include concurrent
credits for allowance for funds other than
borrowed funds used for construction purposes during the period of construction,
based upon a reasonable rate. (See § 1767.16
(c)(17).)
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§ 1767.22
7 CFR Ch. XVII (1–1–12 Edition)
2.
Other
miscellaneous
amortization
charges allowed to be included in this account by RUS.
(e)(6), (g)(5), and (j)(5).) Income taxes on
gains recorded in this account shall be recorded in Account 409.2, Income Taxes, Other
Income and Deductions.
421.2
426 [Reserved]
Loss on Disposition of Property
SPECIAL INSTRUCTIONS
This account shall be charged with the loss
on the sale, conveyance, exchange, or transfer of utility or other property to another.
Amounts relating to losses on land and land
rights held for future use recorded in Account 105, Electric Plant Held for Future
Use, will be accounted for as prescribed in
Paragraphs B, C, and D thereof. (See § 1767.16
(e)(6), (g)(5), and (j)(5).) The reduction in income taxes relating to losses recorded in this
account shall be recorded in Account 409.2,
Income Taxes, Other Income and Deductions.
422
Accounts 426.1, 426.2, 426.3, 426.4, and 426.5
These accounts shall include miscellaneous
expense items which are nonoperating in nature but which are properly deductible before
determining total income before interest
charges.
NOTE: The classification of expenses as
nonoperating and their inclusion in these accounts is for accounting purposes. It does
not preclude RUS consideration of proof to
the contrary for ratemaking or other purposes.
Nonoperating Taxes
This account shall be charged with taxes
relating to nonoperating income.
423
426.1
Generation and Transmission
Cooperative Capital Credits
This account shall be credited with the annual capital furnished the power supply cooperative through payment of power bills.
The amount of capital furnished the power
supply cooperative should be recorded in the
applicable year even though, in most cases,
the power supplier’s notice of the allocation
will not have been received until after the
close of the year to which it relates.
424
426.2
Life Insurance
This account shall include
life insurance of officers
where the company is the
premiums less the increase
render value of policies.)
426.3
all payments for
and employees
beneficiary (net
in the cash sur-
Penalties
This account shall include payments by
the company for penalties or fines for violation of any regulatory statutes by the company or its officials.
Other Capital Credits and Patronage
Capital Allocations
This account shall be credited with the
capital furnished in connection with patronage of cooperative or mutual-type service organization such as CFC and other financing
cooperatives, and insurance, oil product,
telephone, and data processing cooperatives.
This account should be credited in the year
in which the notice of the capital credit or
patronage capital allocation is received.
425
Donations
This account shall include all payments or
donations for charitable, social, or community welfare purposes.
426.4 Expenditures for Certain Civic,
Political, and Related Activities
This account shall include expenditures for
the purpose of influencing public opinion
with respect to the election or appointment
of public officials, referenda, legislation, or
ordinances (either with respect to the possible adoption of new referenda, legislation
or ordinances or repeal or modification of existing referenda, legislation or ordinances)
or approval, modification, or revocation of
franchises; or for the purpose of influencing
the decisions of public officials, but shall not
include such expenditures which are directly
related to appearances before regulatory or
other governmental bodies in connection
with the reporting utility’s existing or proposed operations.
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
426.5
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 RUS.
Other Deductions
This account shall include other miscellaneous expenses which are nonoperating in
nature, but which are properly deductible before determining total income before interest charges.
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Rural Utilities Service, USDA
§ 1767.23
Items
NOTE: This account shall not include interest on nominally issued or nominally outstanding long-term debt, including securities
assumed.
1. Loss relating to investments in securities written-off or written-down.
2. Loss on sale of investments.
3. Loss on reacquisition, resale, or retirement of the utility’s debt securities, when
the loss is not amortized and used by a jurisdictional regulatory agency to increase embedded debt cost in establishing rates. (See
§ 1767.15 (q).)
4. Preliminary survey and investigation expenses related to abandoned projects, when
not written-off to the appropriate operating
expense account.
5. Costs of preliminary abandonment costs
recorded in Account 182.1, Extraordinary
Property Losses, and Account 182.2, Unrecovered Plant and Regulatory Study Costs,
not allowed to be amortized to Account 407,
Amortization of Property Losses, Unrecovered Plant and Regulatory Study Costs.
6. The utility shall record in this account
losses resulting from the settlement of asset
retirement obligations related to nonutility
plant in accordance with the accounting prescribed in § 1767.15(y).
427.3
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.
428
428.1
Amortization of Loss on Reacquired
Debt
Interest charges.
A. This account shall include the amortization of the losses on reacquisition of debt.
Amounts charged to this account shall be
credited concurrently to Account 189,
Unamortized Loss on Reacquired Debt.
B. This account shall be maintained so as
to allow ready identification of the loss amortized applicable to each class and series of
long-term debt reacquired. (See § 1767.15 (q).)
The interest charges accounts identified in this section shall be used by all
RUS borrowers.
INTEREST CHARGES
427 Interest on Long-Term Debt
427.3 Interest Charged to Construction—
Credit
428 Amortization of Debt Discount and Expense
428.1 Amortization of Loss on Reacquired
Debt
429 Amortization of Premium on Debt—
Credit
429.1 Amortization of Gain on Reacquired
Debt—Credit
430 Interest on Debt to Associated Companies
431 Other Interest Expense
432 Allowance for Borrowed Funds Used
During Construction—Credit
429
Amortization of Premium on Debt—
Credit
A. This account shall include the amortization of unamortized net premium on outstanding long-term debt. Amounts credited
to this account shall be charged concurrently to Account 225, Unamortized Premium on Long-Term Debt.
B. This account shall be so kept or supported as to show the premium on each class
and series of long-term debt.
429.1
INTEREST CHARGES
427
Amortization of Debt Discount and
Expense
A. This account shall include the amortization of unamortized debt discount and expense on outstanding long-term debt.
Amounts charged to this account shall be
credited concurrently to Account 181,
Unamortized Debt Expense, and Account 226,
Unamortized Discount on Long-Term Debt—
Debit.
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.
[58 FR 59825, Nov. 10, 1993, as amended at 73
FR 30285, May 27, 2008]
§ 1767.23
Interest Charged to Construction—
Credit
Amortization of Gain on Reacquired
Debt—Credit
A. This account shall include the amortization of the gains realized from reacquisition
of debt. Amounts credited to this account
shall be charged concurrently to Account
257, Unamortized Gain on Reacquired Debt.
B. This account shall be maintained so as
to allow ready identification of the amortized gains applicable to each class and series of long-term debt reacquired. (See
§ 1767.15 (q).)
Interest on Long-Term Debt
A. This account shall include the amount
of interest on outstanding long-term debt
issued or assumed by the utility, the liability for which 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 long-term debt.
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§ 1767.24
430
7 CFR Ch. XVII (1–1–12 Edition)
Interest on Debt to Associated
Companies
to the amounts recorded in this account
shall be recorded in Account 409.3, Income
Taxes, Extraordinary Items. (See § 1767.15
(g).)
A. This account shall include 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
435
Other Interest Expense
435.1
This account shall include all interest
charges not provided for elsewhere.
Cumulative Effect on Prior Years of a
Change in Accounting Principle
This account shall include the cumulative
effect on margins of prior periods as a result
of a change in accounting principle from one
that is no longer generally accepted to one
that is generally accepted.
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 the utility and assumed by it.
432
§ 1767.25 Retained earnings.
The retained earnings accounts identified in this section shall be used by
all RUS borrowers.
RETAINED EARNINGS
Allowance for Borrowed Funds Used
During Construction—Credit
433–439 [Reserved]
RETAINED EARNINGS
This account shall include concurrent
credits for allowance for borrowed funds used
during construction, not to exceed amounts
computed in accordance with the formula
prescribed in § 1767.16(c)(17).
433–439 [Reserved]
§ 1767.26 Operating revenue.
The operating revenue accounts identified in this section shall be used by
all RUS borrowers.
NOTE: This account shall not be recorded in
Account 427.3, Interest Charged to Construction—Credit.
OPERATING REVENUE
[58 FR 59825, Nov. 10, 1993, as amended at 73
FR 30285, May 27, 2008]
Sales of Electricity
440 Residential Sales
440.1 Residential Sales—Excluding Seasonal
440.2 Residential Sales—Seasonal
441 Irrigation Sales
442 Commercial and Industrial Sales
442.1 Commercial and Industrial Sales—1000
kVA or Less
442.2 Commercial and Industrial Sales—
Over 1000 kVA
444 Public Street and Highway Lighting
445 Other Sales to Public Authorities
446 Sales to Railroads and Railways
447 Sales for Resale
447.1 Sales for Resale—RUS Borrowers
447.2 Sales for Resale—Other
448 Interdepartmental Sales
449.1 Provision for Rate Refunds
§ 1767.24 Extraordinary items.
The extraordinary items accounts
identified in this section shall be used
by all RUS borrowers.
EXTRAORDINARY ITEMS
434 Extraordinary Income
435 Extraordinary Deductions
435.1 Cumulative Effect on Prior Years of a
Change in Accounting Principle
EXTRAORDINARY ITEMS
434
Extraordinary Deductions
This account shall be debited with nontypical, noncustomary, infrequently recurring
losses which would significantly distort the
current year’s income computed before extraordinary items, if reported other than as
extraordinary items. Income tax relating to
the amounts recorded in this account shall
be recorded in Account 409.3, Income Taxes,
Extraordinary Items. (See § 1767.15 (f).)
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. Income tax relating
Other Operating Revenues
450
451
Forfeited Discounts
Miscellaneous Service Revenues
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Rural Utilities Service, USDA
§ 1767.26
453 Sales of Water and Water Power
454 Rent from Electric Property
455 Interdepartmental Rents
456 Other Electric Revenues
456.1 Revenues from Transmission of Electricity of Others
457.1 Regional Transmission Service Revenues
457.2 Miscellaneous Revenue
442
NOTE A: If the utility classifies large commercial and industrial customers and related
revenues on a lesser basis than 1000 kilowatts of demand, or segregates industrial
customers and related revenues according to
a recognized definition of an industrial customer, such classifications are acceptable in
lieu of those otherwise required by the text
of this account on the basis of 1000 kilowatts
of demand.
NOTE B: When electricity supplied through
a single meter is used for both commercial
and residential purposes, the total revenue
shall be included in this account, or Account
440, Residential Sales, according to the rate
schedule that is applied. If the same rate
schedules apply to residential and commercial and industrial service, classification
shall be made according to principal use.
OPERATING REVENUE
Sales of Electricity
440
Residential Sales
A. This account shall include the net billing for electricity supplied for residential or
domestic purposes.
NOTE: When electricity supplied through a
single meter is used for both residential and
commercial purposes, the total revenue shall
be included in this account, or Account 442,
Commercial and Industrial Sales, according
to the rate schedule that is applied. If the
same rate schedules apply to residential and
commercial and industrial service, classification shall be made according to principal
use.
B. Account 442 shall be subaccounted as
follows:
442.1 Commercial and Industrial Sales—1000
kVA or Less
442.2 Commercial and Industrial Sales—
Over 1000 kVA
B. Account 440 shall be subaccounted as
follows:
440.1
440.2
Residential Sales—Excluding Seasonal
Residential Sales—Seasonal
440.1
Residential Sales—Excluding Seasonal
442.1
NOTE: When electricity supplied through a
single meter is used for both commercial and
residential purposes, the total revenue shall
be included in this account or in Account
440, Residential Sales, based upon primary
use.
NOTE: Net billings for multiphase service
to schools, churches, lodges, and other public
buildings shall be included in the appropriate subaccount of Account 442, Commercial and Industrial Sales.
442.2
Commercial and Industrial Sales—
Over 1000 kVA
A. This account shall include the net billing for electricity supplied to consumers for
commercial and industrial purposes requiring transformer capacity in excess of 1000
kVA.
B. Records shall be maintained so that the
quantity of electricity sold and the revenue
received under each rate schedule shall be
readily available.
Residential Sales—Seasonal
This account shall include the net billings
for electricity supplied for residential and
domestic purposes to seasonal consumers.
441
Commercial and Industrial Sales—1000
kVA or Less
A. This account shall include the net billing for electricity supplied to consumers for
commercial and industrial purposes requiring transformer capacity of 1000 kVA or less.
B. Records shall be maintained so that the
quantity of electricity sold and the revenue
received under each rate schedule shall be
readily available.
A. This account shall include the net billing for electricity supplied for residential
and domestic purposes.
B. This account shall also include net billings for single phase service to schools,
churches, lodges, and other public buildings.
C. Records shall be maintained so that the
quantity of electricity sold and the revenue
received under each rate schedule shall be
readily available.
440.2
Commercial and Industrial Sales
A. This account shall include the net billing for electricity supplied to customers for
commercial and industrial purposes.
Irrigation Sales
444
This account shall include the net billings
for electricity supplied for irrigation pumping. It need not be used unless such service
is provided under a special irrigation rate.
Public Street and Highway Lighting
A. This account shall include the net billing for electricity supplied and services rendered for the purposes of lighting streets,
highways, parks, and other public places or
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§ 1767.26
7 CFR Ch. XVII (1–1–12 Edition)
for traffic or signal system service, for municipalities or other divisions or agencies of
state of Federal Governments.
B. Records shall be maintained so that the
quantity of electricity sold and the revenue
received from each customer shall be readily
available. In addition, the records shall be
maintained so as to show the revenues from
(1) contracts which include both electricity
and services, and (2) contracts which include
sales of electricity only.
445
B. Records shall be maintained so as to
show the quantity of electricity sold and the
revenue received from each customer.
NOTE: Revenues from electricity supplied
to other utilities for use by them and not for
distribution, shall be included in Account
442, Commercial and Industrial Sales, unless
supplied under the same contract as and not
readily separable from revenues includible in
this account.
447.2
Other Sales to Public Authorities
A. This account shall include the net billing for electricity supplied for resale to utilities not financed by RUS.
B. Records shall be maintained so as to
show the quantity of electricity sold and the
revenue received from each customer.
A. This account shall include the net billing for electricity supplied to municipalities
or divisions or agencies of Federal or state
governments, under special contracts or
agreements or service classifications applicable only to public authorities, except such
revenues as are includible in Account 444 and
Account 447.
B. Records shall be maintained so as to
show the quantity of electricity sold and the
revenues received from each customer.
446
NOTE: Revenues from electricity supplied
to other utilities for use by them and not for
distribution, shall be included in Account
442, Commercial and Industrial Sales, unless
supplied under the same contract as and not
readily separable from revenues includible in
this account.
Sales to Railroads and Railways
A. This account shall include the net billing for electricity supplied to railroads and
interurban and street railways, for general
railroad use, including the propulsion of cars
or locomotives, where such electricity is
supplied under separate and distinct rate
schedules.
B. Records shall be maintained so that the
quantity of electricity sold and the revenue
received from each customer shall be readily
available.
448
449.1
Provision for Rate Refunds
A. This account shall be charged with provisions for the estimated pretax effects on
net income of the portions of amounts being
collected subject to refund which are estimated to be required to be refunded. Such
provisions shall be credited to Account 229,
Accumulated Provision for Rate Refunds.
B. This account shall also be charged with
amounts refunded when such amounts had
not been previously accrued.
C. Income tax effects relating to the
amounts recorded in this account shall be recorded in Account 410.1, Provision for Deferred Income Taxes, Utility Operating Income, or Account 411.1, Provision for Deferred Income Taxes—Credit, Utility Operating Income, as appropriate.
Sales for Resale
A. This account shall include the net billing for electricity supplied to other electric
utilities or to public authorities for resale
purposes.
NOTE: Revenues from electricity supplied
to other utilities for use by them and not for
distribution, shall be included in Account
442, Commercial and Industrial Sales, unless
supplied under the same contracts as and not
readily separable from revenues includible in
this account.
B. Account 447 shall be subaccounted as
follows:
447.1 Sales for Resale—RUS Borrowers
447.2 Sales for Resale—Other
447.1
Interdepartmental Sales
A. This account shall include amounts
charged by the electric department at tariff
or other specified rates for electricity supplied by it to other utility departments.
B. Records shall be maintained so that the
quantity of electricity supplied each other
department and the charges therefor shall be
readily available.
NOTE: Revenues from incidental use of
electricity furnished under a contract for
propulsion of cars or locomotives shall be included herein.
447
Sales for Resale—Other
Other Operating Revenues
450
Forfeited Discounts
This account shall include the amount of
discounts forfeited or additional charges imposed because of the failure of customers to
pay their electric bills on or before a specified date.
Sales for Resale—RUS Borrowers
A. This account shall include the net billing for electricity supplied to RUS borrowers
for resale.
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Rural Utilities Service, USDA
451
§ 1767.26
Miscellaneous Service Revenues
terest or return and depreciation and taxes
shall be credited to this account.
This account shall include revenues for all
miscellaneous services and charges billed to
customers which are not specifically provided for in other accounts.
456
Items
1. Fees for changing, connecting, or disconnecting service.
2. Profit on maintenance of appliances,
wiring, piping, or other installations on customers’ premises.
3. Net credit or debit (cost less net salvage
and less payment from customers) on closing
of work orders for plant installed for temporary service of less than one year. (See Account 185, Temporary Facilities.)
4. Recovery of expenses in connection with
current diversion cases (billing for the electricity consumed shall be included in the appropriate electric revenue account).
453
Items
1. Commission on sale or distribution of
electricity of others when sold under rates
filed by such others.
2. Compensation for minor or incidental
services provided for others such as customer
billing, and engineering.
3. Profit or loss on the sale of material and
supplies not ordinarily purchased for resale
and not handled through merchandising and
jobbing accounts.
4. Sale of steam, but not including sales
made by a steamheating department or
transfers of steam under joint facility operations.
5. Include in a separate subaccount, revenues in payment for rights and/or benefits
received from others which are realized
through research, development, and demonstration ventures. In the event the
amounts received are so large as to distort
revenues for the year in which received (5
percent of net income before application of
the benefit), the amounts shall be credited to
Account 253, Other Deferred Credits, and amortized by credits to this account over a period not to exceed 5 years.
Sales of Water and Water Power
A. This account shall include revenues derived from the sale of water for irrigation,
domestic, industrial, or other uses or for the
development by others of water power or for
headwater benefits; also, revenues derived
from furnishing water power for mechanical
purposes when the investment in the property used in supplying such water or water
power is carried as electric plant in service.
B. The records for this account shall be
kept in such manner as to permit an analysis
of the rates charged and the purposes for
which the water was used.
454
Rent from Electric Property
A. This account shall include rents received for the use by others of land, buildings, and other property devoted to electric
operations by the utility.
B. When property owned by the utility is
operated jointly with others under a definite
arrangement for apportioning the actual expenses among the parties to the arrangement, any amount received by the utility for
interest or return or in reimbursement of
taxes or depreciation on the property shall
be credited to this account.
456.1
Revenues From Transmission of
Electricity of Others
This account shall include revenues from
transmission of electricity of others over
transmission facilities of the utility.
457.1
Regional Transmission Service
Revenues
This account shall include revenues derived from providing scheduling, system control and dispatching services. Include also in
this account reimbursements for system
planning, standards development, and market monitoring and market compliance activities. Records shall be maintained so as to
show: (1) The services supplied and revenues
received from each customer and (2) the
amounts billed by tariff or specified rates.
NOTE: Do not include in this account rents
from property constituting an operating unit
or system. (See Account 412, Revenues from
Electric Plant Leased to Others.)
455
Other Electric Revenues
This account shall include revenues derived from electric operations not includible
in any of the foregoing accounts. It shall
also include, in a separate subaccount, revenues received from operation of fish and
wildlife and recreation facilities whether operated by the company or by contract concessionaires, such as revenues from leases or
rentals of land for cottages, homes, or campsites.
Interdepartmental Rents
This account shall include rents credited
to the electric department on account of
rental charges made against other departments (gas, water, etc.) of the utility. In the
case of property operated under a definite arrangement to allocate the costs among the
departments using the property, any reimbursement to the electric department for in-
457.2
Miscellaneous Revenues
This account shall include revenues and reimbursements for costs incurred by regional
transmission service providers not provided
97
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§ 1767.27
7 CFR Ch. XVII (1–1–12 Edition)
for elsewhere. Records shall be maintained
so as to show: (1) The services supplied and
revenues received from each customer, and
(2) the amounts billed by tariff or specified
rates.
Hydraulic Power Generation
(Operation)
535 Operation Supervision and Engineering
536 Water for Power
537 Hydraulic Expenses
538 Electric Expenses
539 Miscellaneous Hydraulic Power Generation Expenses
540 Rents
[58 FR 59825, Nov. 10, 1993, as amended at 73
FR 30285, May 27, 2008]
§ 1767.27 Operation and maintenance
expenses.
(Maintenance)
The operation and maintenance expense accounts identified in this section shall be used by all RUS borrowers.
541
542
543
OPERATION AND MAINTENANCE EXPENSE
ACCOUNTS
544
545
POWER PRODUCTION EXPENSES
Maintenance
ing
Maintenance
Maintenance
Waterways
Maintenance
Maintenance
lic Plant
Steam Power Generation
546 Operation Supervision and Engineering
547 Fuel
548 Generation Expenses
549 Miscellaneous Other Power Generation
Expenses
550 Rents
(Maintenance)
551
Maintenance Supervision and Engineering
552 Maintenance of Structures
553 Maintenance of Generating and Electric
Equipment
554 Maintenance of Miscellaneous Other
Power Generation Plant
(Maintenance)
511
512
513
514
Supervision and Engineerof Structures
of Boiler Plant
of Electric Plant
of Miscellaneous Steam
OTHER POWER SUPPLY EXPENSES
555 Purchased Power
556 System Control and Load Dispatching
557 Other Expenses
Nuclear Power Generation
(Operation)
517
518
519
520
521
522
523
524
525
TRANSMISSION EXPENSES
Operation Supervision and Engineering
Nuclear Fuel Expense
Coolants and Water
Steam Expenses
Steam from Other Sources
Steam Transferred—Credit
Electric Expenses
Miscellaneous Nuclear Power Expenses
Rents
(Operation)
560 Operation Supervision and Engineering
561.1 Load Dispatch-Reliability
561.2 Load Dispatch-Monitor and Operate
Transmission System
561.3 Load Dispatch-Transmission Service
and Scheduling
561.4 Scheduling, System Control and Dispatching Services
561.5 Reliability, Planning and Standards
Development
561.6 Transmission Service Studies
561.7 Generation Interconnection Studies
561.8 Reliability Planning and Standards
Development Services
561 Load Dispatching
562 Station Expenses
563 Overhead Line Expenses
564 Underground Line Expenses
(Maintenance)
528
529
530
531
532
Maintenance
ing
Maintenance
Maintenance
ment
Maintenance
Maintenance
Plant
of Electric Plant
of Miscellaneous Hydrau-
(Operation)
500 Operation Supervision and Engineering
501 Fuel
502 Steam Expenses
503 Steam from Other Sources
504 Steam Transferred—Credit
505 Electric Expenses
506 Miscellaneous Steam Power Expenses
507 Rents
509 Allowances
Maintenance
ing
Maintenance
Maintenance
Maintenance
Maintenance
Plant
of Structures
of Reservoirs, Dams, and
Other Power Generation
(Operation)
510
Supervision and Engineer-
Supervision and Engineerof Structures
of Reactor Plant Equipof Electric Plant
of Miscellaneous Nuclear
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Rural Utilities Service, USDA
§ 1767.27
565 Transmission of Electricity by Others
566 Miscellaneous Transmission Expenses
567 Rents
593 Maintenance
594 Maintenance
595 Maintenance
596 Maintenance
nal Systems
597 Maintenance
598 Maintenance
tion Plant
(Maintenance)
568
Maintenance Supervision and Engineering
569 Maintenance of Structures
569.1 Maintenance of Computer Hardware
569.2 Maintenance of Computer Software
569.3 Maintenance
of
Communication
Equipment
569.4 Maintenance of Miscellaneous Regional Transmission Plant
570 Maintenance of Station Equipment
571 Maintenance of Overhead Lines
572 Maintenance of Underground Lines
573 Maintenance of Miscellaneous Transmission Plant
of Meters
of Miscellaneous Distribu-
POWER PRODUCTION EXPENSES
Steam Power Generation
(Operation)
500
Operation Supervision and Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the operation of steam power generating stations.
Direct supervision of specific activities, such
as fuel handling, boiler-room operations, and
generator operations shall be charged to the
appropriate account. (See § 1767.17(a).)
(Operation)
575.1 Operation Supervision
575.2 Day-Ahead and Real-Time Market Administration
575.3 Transmission Rights Market Administration
575.4 Capacity Market Administration
575.5 Ancillary Services Market Administration
575.6 Market Monitoring and Compliance
575.7 Market Administration, Monitoring
and Compliance Services
575.8 Rents
501
Fuel
A. This account shall include the cost of
fuel used in the production of steam for the
generation of electricity, including expenses
in unloading fuel from the shipping media
and handling thereof up to the point where
the fuel enters the first boiler plant bunker,
hopper, bucket, tank, or holder of the boilerhouse structure. Records shall be maintained
to show the quantity, B.t.u. content and cost
of each type of fuel used.
B. The cost of fuel shall be charged initially to Account 151, Fuel Stock, and
cleared to this account on the basis of the
fuel used. Fuel handling expenses may be
charged to this account as incurred or
charged initially to Account 152, Fuel Stock
Expenses Undistributed. In the latter event,
they shall be cleared to this account on the
basis of the fuel used. Respective amounts of
fuel stock and fuel stock expenses shall be
readily available.
(Maintenance)
576.1 Maintenance of Structures and Improvements
576.2 Maintenance of Computer Hardware
576.3 Maintenance of Computer Software
576.4 Maintenance
of
Communication
Equipment
576.5 Maintenance of Miscellaneous Market
Operation Plant
DISTRIBUTION EXPENSES
(Operation)
586
587
588
589
Overhead Lines
Underground Lines
Line Transformers
Street Lighting and Sig-
OPERATION AND MAINTENANCE EXPENSE
ACCOUNTS
REGIONAL MARKET EXPENSES
580
581
582
583
584
585
of
of
of
of
Operation Supervision and Engineering
Load Dispatching
Station Expenses
Overhead Line Expenses
Underground Line Expenses
Street Lighting and Signal System Expenses
Meter Expenses
Customer Installations Expenses
Miscellaneous Distribution Expenses
Rents
Items
Labor:
1. Supervising, purchasing, and handling of
fuel.
2. All routine fuel analyses.
3. Unloading from shipping facility and
placing in storage.
4. Moving of fuel in storage and transferring fuel from one station to another.
5. Handling from storage or shipping facility to first bunker, hopper, bucket, tank, or
holder of boiler-house structure.
(Maintenance)
590
Maintenance Supervision and Engineering
591 Maintenance of Structures
592 Maintenance of Station Equipment
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§ 1767.27
7 CFR Ch. XVII (1–1–12 Edition)
6. Operation of mechanical equipment,
such as locomotives, trucks, cars, boats,
barges, and cranes.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupa-
tional injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Operating, maintenance, and depreciation expenses and ad valorem taxes on utility-owned transportation equipment used to
transport fuel from the point of acquisition
to the unloading point.
2. Lease or rental costs of transportation
equipment used to transport fuel from the
point of acquisition to the unloading point.
3. Cost of fuel including freight, switching,
demurrage,
and
other
transportation
charges.
4. Excise taxes, insurance, purchasing commissions, and similar items.
5. Stores expenses to extent applicable to
fuel.
6. Transportation and other expenses in
moving fuel in storage.
7. Tools, lubricants, and other supplies.
8. Operating supplies for mechanical equipment.
9. Residual disposal expenses less any proceeds from sale of residuals.
NOTE: Abnormal fuel handling expenses occasioned by emergency conditions shall be
charged to expense as incurred.
502
Steam Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in production of steam for electric generation.
This includes all expenses of handling and
preparing fuel beginning at the point where
the fuel enters the first boiler plant bunker,
hopper, tank, or holder of the boiler-house
structure.
Items
Labor:
1. Supervising steam production.
2. Operating fuel conveying, storage,
weighing, and processing equipment within
boiler plant.
3. Operating boiler and boiler auxiliary
equipment.
4. Operating boiler feed water purification
and treatment equipment.
5. Operating ash-collecting and disposal
equipment located inside the plant.
6. Operating boiler plant electrical equipment.
7. Keeping boiler plant log and records and
preparing reports on boiler plant operations.
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Rural Utilities Service, USDA
§ 1767.27
8. Testing boiler water.
9. Testing, checking, and adjusting meters,
gauges, and other instruments and equipment in boiler plant.
10. Cleaning boiler plant equipment when
not incidental to maintenance work.
11. Repacking glands and replacing gauge
glasses where the work involved is of a
minor nature and is performed by regular operating crews. Where the work is of a major
character, such as that performed on highpressure boilers, the item should be considered as maintenance.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Chemicals and boiler inspection fees.
2. Lubricants.
3. Boiler feed water purchased and pumping
supplies.
503
Steam from Other Sources
This account shall include the cost of
steam purchased or transferred from another
department of the utility or from others
under a joint facility operating arrangement
for use in prime movers devoted to the production of electricity.
NOTE: The records shall be so kept as to
show separately for each company from
which stem is purchased, the point of delivery, the quantity, the price, and the total
charge. When steam is transferred from another department or from others under a
joint operating arrangement, the utility
shall be prepared to show full details of the
cost of producing such steam, the basis of
the charge to electric generation, and the extent and manner of use by each department
or party involved.
504
Steam Transferred—Credit
A. This account shall include credits for
expenses of producing steam which are
charged to others or to other utility departments under a joint operating arrangement.
Include also credits for steam expenses
chargeable to other electric accounts outside
of the steam generation group. Full details
of the basis of determination of the cost of
steam transferred shall be maintained.
B. If the charges to others or to other departments of the utility include an amount
for depreciation, taxes, and return on the
joint steam facilities, such portion of the
charge shall be credited, in the case of others, to Account 454, Rent from Electric Property, and in the case of other departments of
the utility, to Account 455, Interdepartmental Rents.
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§ 1767.27
7 CFR Ch. XVII (1–1–12 Edition)
505
Electric Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
and materials used, and expenses incurred in
operating prime movers, generators, and
their auxiliary apparatus, switch gear, and
other electric equipment to the points where
electricity leaves for conversion for transmission or distribution.
Items
Labor:
1. Supervising electric production.
2. Operating turbines, engines, generators,
and exciters.
3. Operating condensers, circulating water
systems, and other auxiliary apparatus.
4. Operating generator cooling system.
5. Operating lubrication and oil control
system, including oil purification.
6. Operating switchboards, switch gear and
electric control, and protective equipment.
7. Keeping electric plant log and records
and preparing reports on electric plant operations.
8. Testing, checking, and adjusting meters,
gauges, and other instruments, relays, controls, and other equipment in the electric
plant.
9. Cleaning electric plant equipment when
not incidental to maintenance work.
10. Repacking glands and replacing gauge
glasses.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Taxes.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Lubricants and control system oils.
2. Generator cooling gases.
3. Circulating water purification supplies.
4. Cooling water purchased.
5. Motor and generator brushes.
506
Miscellaneous Steam Power Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and materials used and expenses
incurred which are not specifically provided
for or not readily assignable to other steam
generation operation expense accounts.
Items
Labor:
1. General clerical and stenographic work.
2. Guarding and patrolling plant and yard.
3. Building service.
4. Care of grounds including snow removal,
and grass cutting.
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Rural Utilities Service, USDA
§ 1767.27
5. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. General operating supplies, such as
tools, gaskets, packing waste, gauge glasses,
hose, indicating lamps, record and report
forms.
2. First-aid supplies and safety equipment.
3. Employees’ service facilities expenses.
4. Building service supplies.
5. Communication service.
6. Miscellaneous office supplies and expenses, printing, and stationery.
7. Transportation expenses.
8. Meals, traveling, and incidental expenses.
9. Research, development, and demonstration expenses.
507
Rents
This account shall include all rents of
property of others used, occupied or operated
in connection with steam power generation.
(See § 1767.17 (c).)
509
Allowances
This account shall include the cost of allowances expensed concurrent with the
monthly emission of sulfur dioxide. (See
§ 1767.15 (u).)
(Maintenance)
510
Maintenance Supervision and
Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of maintenance of steam generation facilities. Direct
field supervision of specific jobs shall be
charged to the appropriate maintenance account. (See § 1767.17(a).)
511
Maintenance of Structures
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and materials used and expenses
incurred in the maintenance of steam structures, the book cost of which is includible in
Account 311, Structures and Improvements.
(See § 1767.17(b).)
512
Maintenance of Boiler Plant
A. This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and materials used and expenses
incurred in the maintenance of steam plant,
the book cost of which is includible in Account 312, Boiler Plant Equipment. (See
§ 1767.17(b).)
B. For the purpose of making charges hereto and to Account 513, Maintenance of Electric Plant, the point at which steam plant is
distinguished from electric plant is defined
as follows:
1. Inlet flange of throttle valve on prime
mover.
2. Flange of all steam extraction lines on
prime mover.
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§ 1767.27
7 CFR Ch. XVII (1–1–12 Edition)
3. Hotwell pump outlet on condensate
lines.
4. Inlet flange of all turbine-room auxiliaries.
5. Connection to line side of motor starter
for all boiler-plant equipment.
513
Maintenance of Electric Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and materials used and expenses
incurred in the maintenance of electric
plant, the book cost of which is includible in
Account 313, Engines and Engine-Driven
Generators; Account 314, Turbogenerator
Units; and Account 315, Accessory Electric
Equipment. (See § 1767.17(b) and Paragraph B
of Account 512.)
C. This account shall also include the cost
of other fuels, used for ancillary steam facilities, including superheat.
D. This account shall be debited or credited as appropriate for significant changes in
the amounts estimated as the net salvage
value of uranium, plutonium, and other byproducts contained in Account 157, Nuclear
Materials Held for Sale, and the amount realized upon the final disposition of the materials. Significant declines in the estimated
realizable value of items carried in Account
157 may be recognized at the time of market
price declines by charging this account and
crediting Account 157. When the declining
change occurs while the fuel is recorded in
Account 120.3, Nuclear Fuel Assemblies in
Reactor, the effect shall be amortized over
the remaining life of the fuel.
519
514
Maintenance of Miscellaneous Steam
Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and materials used and expenses
incurred in maintenance of miscellaneous
steam generation plant, the book cost of
which is includible in Account 316, Miscellaneous
Power
Plant
Equipment.
(See
§ 1767.17(b).)
Nuclear Power Generation
(Operation)
517
Operation Supervision and Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the operation of nuclear power generating stations.
Direct supervision of specific activities, such
as fuel handling, reactor operations, and generator operations shall be charged to the appropriate account. (See § 1767.17(a).)
518
Nuclear Fuel Expense
A. This account shall be debited and Account 120.5, Accumulated Provision for Amortization of Nuclear Fuel Assemblies, credited for the amortization of the net cost of
nuclear fuel assemblies used in the production of energy. The net cost of nuclear fuel
assemblies subject to amortization shall be
the cost of nuclear fuel assemblies plus or
less the expected net salvage of uranium,
plutonium, and other byproducts and unburned fuel. The utility shall adopt the necessary procedures to assure that charges to
this account are distributed according to the
thermal energy produced in such periods.
B. This account shall also include the costs
involved when fuel is leased.
Coolants and Water
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
and materials used and expenses incurred for
heat transfer materials and water used for
steam and cooling purposes.
Items
Labor:
1. Operation of water supply facilities.
2. Handling of coolants and heat transfer
materials.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Taxes.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
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§ 1767.27
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Chemicals.
2. Additions to or refining of fluids used in
reactor systems.
3. Lubricants.
4. Pumping supplies and expenses.
5. Miscellaneous supplies and expenses.
6. Purchased water.
NOTE: Do not include in this account water
for general station use or the initial charge
for coolants, heat transfer, or moderator
fluids, chemicals, or other supplies capitalized.
520
Steam Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
and materials used and expenses incurred in
production of steam through nuclear processes, and similar expenses for operation of
any auxiliary superheat facilities.
Items
Labor:
1. Supervising steam production.
2. Fuel handling including removal, insertion, disassembly, and preparation for cooling operations and shipment.
3. Testing instruments and gauges.
4. Health, safety, monitoring, and decontamination activities.
5. Waste disposal.
6. Operating steam boilers and auxiliary
steam, superheat facilities.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
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deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Chemical supplies.
2. Charts and logs.
3. Health, safety, monitoring, and decontamination supplies.
4. Boiler inspection fees.
5. Lubricants.
521
Steam from Other Sources
This account shall include the cost of
steam purchased or transferred from another
department of the utility or from others
under a joint facility operating arrangement
for use in prime movers devoted to the production of electricity.
NOTE: The records shall be so kept as to
show separately for each company from
which steam is purchased, the point of delivery, the quantity, the price, and the total
charge. When steam is transferred from another operating department, the utility shall
be prepared to show full details of the cost of
producing such steam, the basis of the
charges to electric generation, and the extent and manner of use by each department
involved.
522
Steam Transferred—Credit
A. This account shall include credits for
expenses of producing steam which are
charged to others or to other utility departments under a joint operating arrangement.
Include also credits for steam expenses
chargeable to other electric accounts outside
of the steam generation group. Full details
of the basis of determination of the cost of
steam transferred shall be maintained.
B. If the charges to others or to other departments of the utility include an amount
for depreciation, taxes, and return on the
joint steam facilities, such portion of the
charge shall be credited in the case of others,
to Account 454, Rent from Electric Property,
and in the case of other departments of the
utility, to Account 455, Interdepartmental
Rents.
523
Electric Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in operating turbogenerators, steam turbines and
their auxiliary apparatus, switch gear, and
other electric equipment to the points where
electricity leaves for conversion for transmission or distribution.
Items
Labor:
1. Supervising electric production.
2. Operating turbines, engines, generators,
and exciters.
3. Operating condensers, circulating water
systems, and other auxiliary apparatus.
4. Operating generator cooling system.
5. Operating lubrication and oil control
system, including oil purification.
6. Operating switchboards, switch gear, and
electric control and protective equipment.
7. Keeping plant log and records and preparing reports on electric plant operations.
8. Testing, checking and adjusting meters,
gauges, and other instruments, relays, controls, and other equipment in the electric
plant.
9. Cleaning electric plant equipment when
not incidental to maintenance.
10. Repacking glands and replacing gauge
glasses.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
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6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Lubricants and control system oils.
2. Generator cooling gases.
3. Log sheets and charts.
4. Motor and generator brushes.
524
Miscellaneous Nuclear Power Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred which are not specifically provided
for or are not readily assignable to other nuclear generation operation accounts.
Items
Labor:
1. General clerical and stenographic work.
2. Plant security.
3. Building service.
4. Care of grounds, including snow removal,
and grass cutting
5. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. General operating supplies, such as
tools, gaskets, hose, indicating lamps,
records and reports forms.
2. First-aid supplies and safety equipment.
3. Employees’ service facilities expenses.
4. Building service supplies.
5. Communication service.
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§ 1767.27
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6. Miscellaneous office supplies and expenses, printing and stationery.
7. Transportation expenses.
8. Meals, traveling, and incidental expenses.
9. Research, development, and demonstration expenses.
525
(Operation)
(Maintenance)
Maintenance Supervision and
Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of maintenance of nuclear generation facilities. Direct
field supervision of specific jobs shall be
charged to the appropriate maintenance account. (See § 1767.17(a).)
529
Maintenance of Structures
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the maintenance of structures, the
book cost of which is includible in Account
321, Structures and Improvements. (See
§ 1767.17(b).)
530
Maintenance of Electric Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the maintenance of electric plant,
the book cost of which is includible in Account 323, Turbogenerator Units, and Account 324, Accessory Electric Equipment.
(See § 1767.17(b).)
532
535
Operation Supervision and Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the operation of hydraulic power generating stations.
Direct supervision of specific activities, such
as hydraulic operation, and generator operation shall be charged to the appropriate account. (See § 1767.17(a).)
536
Maintenance of Miscellaneous Nuclear
Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses in-
Water for Power
This account shall include the cost of
water used for hydraulic power generation.
Items
1. Cost of water purchased from others, including water tolls paid reservoir companies.
2. Periodic payments for licenses or permits from any governmental agency for
water rights, or payments based on the use
of the water.
3. Periodic payments for riparian rights.
4. Periodic payments for headwater benefits or for detriments to others.
5. Cloud seeding.
537
Maintenance of Reactor Plant
Equipment
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the maintenance of reactor plant,
the book cost of which is includible in Account 322, Reactor Plant Equipment. (See
§ 1767.17(b).)
531
Hydraulic Power Generation
Rents
This account shall include all rents of
property of others used, occupied, or operated in connection with nuclear generation.
(See § 1767.17 (c).)
528
curred in maintenance of miscellaneous nuclear generating plant, the book cost of
which is includible in Account 325, Miscellaneous
Power
Plant
Equipment.
(See
§ 1767.17(b).)
Hydraulic Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in operating hydraulic works including reservoirs,
dams, and waterways, and in activities directly relating to the hydroelectric development outside the generating station. It shall
also include the cost of labor, materials
used, and other expenses incurred in connection with the operation of (1) fish and wildlife, and (2) recreation facilities. Separate
subaccounts shall be maintained for each of
the above.
Items
Labor:
1. Supervising hydraulic operation.
2. Removing debris and ice from trash
racks, reservoirs, and waterways.
3. Patrolling reservoirs and waterways.
4. Operating intakes, spillways, sluiceways,
and outlet works.
5. Operating bubbler, heater, or other deicing systems.
6. Ice and log jam work.
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§ 1767.27
7. Operating navigation facilities.
8. Operations relating to conservation of
game, fish, and forests.
9. Insect control activities.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupa-
tional injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Insect control materials.
2. Lubricants, packing, and other supplies
used in the operation of hydraulic equipment.
3. Transportation expense.
538
Electric Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in operating prime movers, generators, and their
auxiliary apparatus, switchgear, and other
electric equipment, to the point where electricity leaves for conversion for transmission
or distribution.
Items
Labor:
1. Supervising electric production.
2. Operating prime movers, generators, and
auxiliary equipment.
3. Operating generator cooling system.
4. Operating lubrication and oil control
systems, including oil purification.
5. Operating switchboards, switchgear, and
electric control and protection equipment.
6. Keeping plant log and records and preparing reports on plant operations.
7. Testing, checking and adjusting meters,
gauges, and other instruments, relays, controls, and other equipment in the plant.
8. Cleaning plant equipment when not incidental to maintenance work.
9. Repacking glands.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
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3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Lubricants and control system oils.
2. Motor and generator brushes.
539
Miscellaneous Hydraulic Power
Generation Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred which are not specifically provided
for or are not readily assignable to other hydraulic generation operation expense accounts.
Items
Labor:
1. General clerical and stenographic work.
2. Guarding and patrolling plant and yard.
3. Building service.
4. Care of grounds including snow removal,
and grass cutting.
5. Snow removal from roads and bridges.
6. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
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Rural Utilities Service, USDA
§ 1767.27
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. General operating supplies, such as
tools, gaskets, packing, waste, hose, indicating lamps, record and report forms.
2. First-aid supplies and safety equipment.
3. Employees’ service facilities expenses.
4. Building service supplies.
5. Communication service.
6. Office supplies, printing and stationery.
7. Transportation expenses.
8. Fuel.
9. Meals, traveling, and incidental expenses.
10. Research, development, and demonstration expenses.
540
Rents
This account shall include all rents of
property of others used, occupied, or operated in connection with hydraulic power generation, including amounts payable to the
United States for the occupancy of public
lands and reservations for reservoirs, dams,
flumes, forebays, penstocks, and power
houses but not including transmission rightof-way. (See § 1767.17 (c).)
(Maintenance)
541
Maintenance Supervision and
Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the maintenance of hydraulic power generating stations. Direct field supervision of specific jobs
shall be charged to the appropriate maintenance account. (See § 1767.17(a).)
542
544
Maintenance of Electric Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of plant includible in
Account 333, Water Wheels, Turbines and
Generators, and Account 334, Accessory Electric Equipment, (See § 1767.17(b).)
545
Maintenance of Miscellaneous
Hydraulic Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of plant, the book
cost of which is includible in Account 335,
Miscellaneous Power Plant Equipment, and
Account 336, Roads Railroads and Bridges.
(See § 1767.17(b).) It shall also include the
cost of labor, materials used, and other expenses incurred in the maintenance of (1)
fish and wildlife, and (2) recreation facilities.
Separate subaccounts shall be maintained
for each of the above.
Other Power Generation
(Operation)
546
Maintenance of Structures
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of hydraulic structures, the book cost of which is includible in
Account 331, Structures and Improvements.
(See § 1767.17 (b).) However, the cost of labor,
materials used, and expenses incurred in the
maintenance of fish and wildlife and recreation facilities, the book cost of which is includible in Account 331, Structures and Improvements, shall be charged to Account 545,
Maintenance of Miscellaneous Hydraulic
Plant.
543
curred in maintenance of plant includible in
Account 332, Reservoirs, Dams, and Waterways. (See § 1767.17(b).) However, the cost of
labor, materials used, and expenses incurred
in the maintenance of fish and wildlife and
recreation facilities, the book cost of which
is includible in Account 332, Reservoirs,
Dams, and Waterways, shall be charged to
Account 545, Maintenance of Miscellaneous
Hydraulic Plant.
Operation Supervision and Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the operation of other power generating stations. Direct supervision of specific activities, such
as fuel handling and engine and generator
operation shall be charged to the appropriate
account. (See § 1767.17(a).)
547
Maintenance of Reservoirs, Dams, and
Waterways
548
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses in-
Fuel
This account shall include the cost delivered at the station (See Account 151, Fuel
Stock) of all fuel, such as gas, oil, kerosene,
and gasoline used in other power generation.
Generation Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
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§ 1767.27
7 CFR Ch. XVII (1–1–12 Edition)
materials used, and expenses incurred in operating prime movers, generators, and electric equipment in other power generating
stations, to the point where electricity
leaves for conversion for transmission or distribution.
Items
Labor:
1. Supervising other power generation operation.
2. Operating prime movers, generators, and
auxiliary apparatus and switching and other
electric equipment.
3. Keeping plant log and records and preparing reports on plant operations.
4. Testing, checking, cleaning, oiling, and
adjusting equipment.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from inju-
ries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Dynamo, motor, and generator brushes.
2. Lubricants and control system oils.
3. Water for cooling engines and generators.
549
Miscellaneous Other Power Generation
Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the operation of other power generating stations which are not specifically provided for or are not readily assignable to
other generation expense accounts.
Items
Labor:
1. General clerical and stenographic work.
2. Guarding and patrolling plant and yard.
3. Building service.
4. Care of grounds, including snow removal,
and grass cutting.
5. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
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Rural Utilities Service, USDA
§ 1767.27
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Building service supplies.
2. First-aid supplies and safety equipment.
3. Communication service.
4. Employees’ service facilities expenses.
5. Office supplies, printing and stationery.
6. Transportation expense.
7. Meals, traveling, and incidental expenses.
8. Fuel for heating.
9. Water for fire protection or general use.
10. Miscellaneous supplies, such as hand
tools, drills, saw blades, and files.
11. Research, development, and demonstration expenses.
550
Rents
This account shall include all rents of
property of others used, occupied, or operated in connection with other power generation. (See § 1767.17 (c).)
(Maintenance)
551
Maintenance Supervision and
Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the maintenance of other power generating stations. Direct field supervision of specific jobs shall be
charged to the appropriate maintenance account. (See § 1767.17(a).)
552
Maintenance of Structures
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of facilities used and
expenses incurred in maintenance of facilities used in other power generation, the book
cost of which is includible in Account 341,
Structures and Improvements, and Account
342, Fuel Holders, Producers and Accessories.
(See § 1767.17(b).)
553
Maintenance of Generating and Electric
Equipment
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of plant, the book
cost of which is includible in Account 343,
Prime Movers; Account 344, Generators; and
Account 345, Accessory Electric Equipment.
(See § 1767.17(b).)
554
Maintenance of Miscellaneous Other
Power Generation Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of other power generation plant, the book cost of which is includible in Account 346, Miscellaneous Power
Plant Equipment. (See § 1767.17(b).)
OTHER POWER SUPPLY EXPENSES
555
Purchased Power
A. This account shall include the cost at
point of receipt by the utility of electricity
purchased for resale. It shall also include,
net settlements for exchange of electricity
or power, such as economy energy, off-peak
energy for on-peak energy, and spinning reserve capacity. In addition, the account shall
include the net settlements for transactions
under pooling or interconnection agreements
wherein there is a balancing of debits and
credits for energy, or capacity. Distinct purchases and sales shall not be recorded as exchanges and net amounts only recorded
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§ 1767.27
7 CFR Ch. XVII (1–1–12 Edition)
merely because debit and credit amounts are
combined in the voucher settlement.
B. The records supporting this account
shall show, by months, the demands and demand charges, kilowatt-hours and prices
thereof under each purchase contract and
the charges and credits under each exchange
or power pooling contract.
NOTE: The records supporting this account
shall provide information pertaining to the
purchase of power from renewable energy
sources.
556
System Control and Load Dispatching
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
and expenses incurred in load dispatching activities for system control. Utilities having
an interconnected electric system or operating under a central authority which controls the production and dispatching of electricity may apportion these costs to this account and transmission expense Account
561.1 through 561.4, and Account 581, Load
Dispatching—Distribution.
Items
Labor:
1. Allocating loads to plants and interconnections with others.
2. Directing switching.
3. Arranging and controlling clearances for
construction, maintenance, test, and emergency purposes.
4. Controlling system voltages.
5. Recording loadings, and water conditions.
6. Preparing operating reports and data for
billing and budget purposes.
7. Obtaining reports on the weather and
special events.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Expenses:
1. Communication service provided for system control purposes.
2. System record and report forms.
3. Meals, traveling, and incidental expenses.
4. Obtaining weather and special events reports.
557
Other Expenses
A. This account shall be charged with any
production expenses including expenses incurred directly in connection with the purchase of electricity, which are not specifically provided for in other production expense accounts. Charges to this account
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Rural Utilities Service, USDA
§ 1767.27
shall be supported so that a description of
each type of charge will be readily available.
B. Recoveries from insurance companies,
under use and occupancy provisions of policies, of amounts in reimbursement of excessive or added productions costs for which the
insurance company is liable under the terms
of the policy shall be credited to this account.
TRANSMISSION EXPENSES
(Operation)
560
Operation Supervision and Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the operation of the transmission system as a whole.
Direct supervision of specific activities, such
as station operation and line operation shall
be charged to the appropriate account. (See
§ 1767.17(a).)
561.1
Load Dispatch—Reliability
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred by a
regional transmission service provider or
other transmission provider to manage the
reliability coordination function as specified
by the North American Electric Reliability
Council (NERC) and individual reliability organizations. These activities shall include
performing current and next day reliability
analysis. This account shall include the
costs incurred to calculate load forecasts,
and performing contingency analysis.
561.2
Load Dispatch—Monitor and Operate
Transmission System
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred by a
regional transmission service provider or
other transmission provider to monitor, assess and operate the power system and individual transmission facilities in real-time to
maintain safe and reliable operation of the
transmission system. This account shall also
include the expense incurred to manage
transmission facilities to maintain system
reliability and to monitor real-time flows
and direct actions according to regional
plans and tariffs if necessary.
Items
1. Receive and analyze outage requests
2. Reschedule outage plans
3. Monitor solution quality field data values,
providing model updates to NERC and
coordinating network model changes
across all systems
4. Conduct operating training related to
NERC Certification
5. Monitor generation resources and communicate expected dispatch actions
6. Ensure ancillary service requirements are
met
7. Directing switching
8. Controlling system voltages
9. Obtaining reports on the weather and special events
10. Preparing operating reports and data for
billing and budget purposes
561.3
Load Dispatch—Transmission Service
and Scheduling
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred by a
regional transmission service provider or
other transmission provider to process hourly, daily, weekly and monthly transmission
service requests using an automated system
such as an Open Access Same-Time Information System (OASIS). It shall include the expenses incurred to operate the automated
transmission service request system and to
monitor the status of all scheduled energy
transactions.
561.4
Scheduling, System Control and
Dispatching Services
This account shall include the costs billed
to the transmission owner, load serving entity or generator for scheduling, system control and dispatching service. Include in this
account service billings for system control
to maintain the reliability of the transmission area in accordance with reliability
standards, maintaining defined voltage profiles, and monitoring operations of the transmission facilities.
561.5
Reliability, Planning and Standards
Development
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred for the
system planning of the interconnected bulk
electric transmission system within a planning authority area.
Items
1. Developing and maintaining transmission system models to evaluate transmission system performance.
2. Maintaining and applying methodologies
and tools for the analysis and simulation of
the transmission systems for the assessment
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§ 1767.27
7 CFR Ch. XVII (1–1–12 Edition)
and development of transmission expansion
plans.
3. Assessing, developing and documenting
transmission expansion plans.
4. Maintaining transmission system models
(steady-state, dynamics, and short circuit).
5. Collecting transmission information and
transmission facility characteristics and ratings.
6. Notifying participants of any planned
transmission changes that may impact their
facilities.
7. Developing and reporting on transmission expansion plans for assessment and
compliance with reliability standards.
8. Developing reliability standards for the
planning and operation of the interconnected
bulk electric transmission systems that
serve the United States, Canada and Mexico.
9. Developing criteria and certification
procedures for reliability authorities, transmission operators and others.
10. Outside services employed.
NOTE: The cost of supervision, customer
records and collection expenses, administrative and general salaries, regulatory commission expenses, general advertising, and
rents shall be charged to the customer accounts, service, administrative and general
expense accounts contained in the Uniform
System of Accounts.
561.6
Transmission Service Studies
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred to
conduct generation interconnection studies
for proposed interconnections with the
transmission system. Detailed records shall
be maintained for each study undertaken
and all reimbursements received for conducting such a study.
561.7
Generation Interconnection Studies
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred to
conduct generation interconnection studies
for proposed interconnections with the
transmission system. Detailed records shall
be maintained for each study undertaken
and all reimbursements received for conducting such a study.
561.8
Reliability Planning and Standards
Development Services
This account shall include the costs billed
to the transmission owner, load serving entity, or generator for system planning of the
interconnected bulk electric transmission
service provider for system reliability and
resource panning to develop long-term strat-
egies to meet customer demand and energy
requirements. This account shall also include fees and expenses for outside services
incurred by the regional transmission service provider and billed to the load serving
entity, transmission owner or generator.
562
Station Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in operating transmission substations and switching stations. If transmission station equipment is located in or adjacent to a generating station, the expenses applicable to
transmission station operations shall nevertheless be charged to this account.
Items
Labor:
1. Supervising station operation.
2. Adjusting station equipment where such
adjustment primarily affects performance,
such as regulating the flow of cooling water,
adjusting current in fields of a machine or
changing voltage of regulators, changing station transformer taps.
3. Inspecting, testing, and calibrating station equipment for the purpose of checking
its performance.
4. Keeping station log and records and preparing records on station operation.
5. Operating switching and other station
equipment.
6. Standing watch, guarding, and patrolling station and station yard.
7. Sweeping, mopping, and tidying station.
8. Care of grounds, including snow removal,
and grass cutting.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
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Rural Utilities Service, USDA
§ 1767.27
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Building service expenses.
2. Operating supplies, such as lubricants,
commutator brushes, water, and rubber
goods.
3. Station meter and instrument supplies,
such as ink and charts.
4. Station record and report forms.
5. Tool expense.
6. Transportation expenses.
7. Meals, traveling, and incidental expenses.
563
564
Overhead Line Expenses
Underground Line Expenses
A. These accounts shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in the
operation of transmission lines.
B. If the expenses are not substantial for
both overhead and underground lines, these
accounts may be combined.
Items
Labor:
1. Supervising line operation.
2. Inspecting and testing lightning arresters, circuit breakers, switches, and grounds.
3. Load tests of circuits.
4. Routine line patrolling.
5. Routine voltage surveys made to determine the condition or efficiency of transmission system.
6. Transferring loads, switching and reconnecting circuits and equipment for operating
purposes. (Switching for construction or
maintenance purposes is not includible in
this account.)
7. Routine inspection and cleaning of manholes, conduit, network, and transformer
vaults.
8. Electrolysis surveys.
9. Inspecting and adjusting line-testing
equipment, such as voltmeters, ammeters,
and wattmeters.
10. Regulation and addition of oil or gas in
high-voltage cable systems.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
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7 CFR Ch. XVII (1–1–12 Edition)
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Transportation expenses.
2. Meals, traveling, and incidental expenses.
3. Tool expenses.
4. Operating supplies, such as instrument
charts, and rubber goods.
565
Transmission of Electricity by Others
This account shall include amounts payable to others for the transmission of the
utility’s electricity over transmission facilities owned by others.
566
Miscellaneous Transmission Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damage, materials used, and expenses incurred in transmission map and record work,
transmission office expenses, and other
transmission expenses not provided for elsewhere.
Items
Labor:
1. General records of physical characteristics of lines and stations, such as capacities.
2. Ground resistance records.
3. Janitor work at transmission office
buildings, including care of grounds, snow removal, and grass cutting.
4. Joint pole maps and records.
5. Line load and voltage records.
6. Preparing maps and prints.
7. General clerical and stenographic work.
8. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
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7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Communication service.
2. Building service supplies.
3. Map and record supplies.
4. Transmission office supplies and expenses, printing and stationery.
5. First-aid supplies.
6. Research, development, and demonstration expenses.
567
(Maintenance)
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of maintenance of the transmission system. Direct
field supervision of specific jobs shall be
charged to the appropriate maintenance account. (See § 1767.17(a).)
Maintenance of Structures
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the maintenance of structures, the
book cost of which is includible in Account
352, Structures and Improvements. (See
§ 1767.17(b).)
569.1
569.4 Maintenance of Miscellaneous
Regional Transmission Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used and expenses incurred in the maintenance of miscellaneous
regional transmission plant serving the
transmission function.
Maintenance of Station Equipment
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of station equipment,
the book cost of which is includible in Account
353,
Station
Equipment.
(See
§ 1767.17(b).)
571
Maintenance of Overhead Lines
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of transmission plant,
the book cost of which is includible in Accounts 354, Towers and Fixtures; 355, Poles
and Fixtures; 356, Overhead Conductors and
Devices; and 359, Roads and Trails. (See
§ 1767.17(b).)
Items
Maintenance of Computer Hardware
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used and expenses incurred in the maintenance of computer hardware serving the transmission function.
569.2
Maintenance of Communication
Equipment
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used and expenses incurred in the maintenance of communication
equipment serving the transmission function.
570
Maintenance Supervision and
Engineering
569
569.3
Rents
This account shall include rents of property of others used, occupied, or operated in
connection with the transmission system, including payments to the United States and
others for use of public or private lands and
reservations for transmission line rights-ofway. (See § 1767.17 (c).)
568
Items
1. Telephone Support
2. Onsite support
3. Software updates and minor revisions
Maintenance of Computer Software
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used and expenses incurred for annual computer software license
renewals, annual software update services
and the cost of ongoing support for software
products serving the transmission function.
1. Work of the following character on
poles, towers, and fixtures:
a. Installing or removing additional
clamps or strain insulators on guys in place.
b. Moving line or guy pole in relocation of
the same pole or section of line.
c. Painting poles, towers, crossarms, or
pole extensions.
d. Readjusting and changing position of
guys or braces.
e. Realigning and straightening poles,
crossarms braces, and other pole fixtures.
f. Reconditioning reclaimed pole fixtures.
g. Relocating crossarms, racks, brackets,
and other fixtures on poles.
h. Repairing or realigning pins, racks, or
brackets.
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i. Repairing pole supported platform.
j. Repairs by others to jointly owned poles.
k. Shaving, cutting rot, or testing poles or
crossarms in use or salvaged for reuse.
l. Stubbing poles already in service.
m. Supporting fixtures and conductors and
transferring them to new poles during pole
replacements.
n. Maintenance of pole signs, stencils, and
tags.
2. Work of the following character on overhead conductors and devices:
a. Overhauling and repairing line cutouts,
line switches, and line breakers.
b. Cleaning insulators and bushings.
c. Refusing cutouts.
d. Repairing line oil circuit breakers and
associated relays and control wiring.
e. Repairing grounds.
f. Resagging, retyping, or rearranging position or spacing of conductors.
g. Standing by phones, going to calls, cutting faulty lines clear, or similar activities
at times of emergencies.
h. Sampling, testing, changing, purifying,
and replenishing insulating oil.
i. Repairing line testing equipment.
j. Transferring loads, switching and reconnecting circuits and equipment for maintenance purposes.
k. Trimming trees and clearing brush.
l. Chemical treatment of right of way areas
when occurring subsequent to construction
of line.
3. Work of the following character on roads
and trails:
a. Repairing roadways and bridges.
b. Trimming trees and brush to maintain
previous roadway clearance.
c. Snow removal from roads and trails.
d. Maintenance work on publicly owned
roads and trails when done by utility at its
expense.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital services and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
572
Maintenance of Underground Lines
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of transmission plant,
the book cost of which is includible in Accounts 357, Underground Conduit, and Account 358, Underground Conductors and Devices. (See § 1767.17(b).)
Items
1. Work of the following character on underground conduit:
a. Cleaning ducts, manholes, and sewer
connections.
b. Minor alterations of handholes, manholes, or vaults.
c. Refastening, repairing, or moving racks,
ladders, hangers in manholes, or vaults.
d. Plugging and shelving or replugging
ducts.
e. Repairs to sewers and drains, walls and
floors, rings and covers.
2. Work of the following character on underground conductors and devices:
a. Repairing oil circuit breakers, switches,
cutouts, and control wiring.
b. Repairing grounds.
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c. Retraining and reconnecting cables in
manholes, including transfer of cables from
one duct to another.
d. Repairing conductors and splices.
e. Repairing or moving junction boxes and
potheads.
f. Refireproofing of cables and repairing
supports.
g. Repairing electrolysis preventive devices for cables.
h. Repairing cable bonding systems.
i. Sampling, testing, changing, purifying,
and replenishing insulating oil.
j. Transferring loads, switching and reconnecting circuits, and equipment for maintenance purposes.
k. Repairing line testing equipment.
l. Repairs to oil or gas equipment in highvoltage cable system and replacement of oil
or gas.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
573
Maintenance of Miscellaneous
Transmission Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of owned or leased
plant which is assignable to transmission operations and is not provided for elsewhere.
(See § 1767.17(b).)
Regional Market Expenses
(Operational)
575.1
Operation Supervision
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the regional
energy markets.
575.2
Day-Ahead and Real-Time Market
Administration
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred to facilitate
the Day-Ahead and Real-Time markets. This
account shall also include the costs incurred
to manage the real-time deployment of resources to meet generation needs and to provide capacity adequacy verification. Include
in this account the costs incurred to maintain related sections of the tariff, market
rules, operating procedures, and standards
and coordinating with neighboring areas.
Items
1. Consultant fees and expenses
2. System record and report forms
3. Meals, traveling and incidental expenses
NOTE: The cost of supervision, customer
records and collection expenses, administrative and general salaries, regulatory commission expenses, general advertising, and
rents shall be charged to the customer accounts, service, administrative and general
expense accounts contained in the Uniform
System of Accounts.
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575.3
7 CFR Ch. XVII (1–1–12 Edition)
Transmission Rights Market
Administration
576.3
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred to manage
the allocation and auction of transmission
rights.
575.4
Capacity Market Administration
Items
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred to manage
the allocation of capacity rights.
575.5
576.4
Market Monitoring and Compliance
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred to review
market data and operational decisions for
compliance with market rules. It shall also
include the costs incurred to interface with
external market monitors.
575.7
1. Telephone support
2. Onsite support
3. Software updates and minor revisions
Ancillary Services Market
Administration
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred to manage
all other ancillary services market functions
575.6
Market Administration, Monitoring
and Compliance Services
576.5
Rents
Maintenance of Structures and
Improvements
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the maintenance of structures used in market administration
and
monitoring.
(See
Sec.
1767.17(b).)
576.2
Maintenance of Miscellaneous Market
Operation Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the maintenance of miscellaneous market operation
plant used in market administration and
monitoring.
DISTRIBUTION EXPENSES
This account shall include all rents of
property of others used, occupied, or operated in connection with market administration and monitoring. (See Sec. 1767.17(c).)
(Maintenance)
576.1
Maintenance of Communication
Equipment
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the maintenance of communication equipment used
in market administration and monitoring.
This account shall include the cost billed
to the transmission owner, load serving entity or generator for market administration,
monitoring and compliance services.
575.8
Maintenance of Computer Software
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred for annual
computer software license renewals, annual
software update services and the cost of ongoing support for software products used in
market administration and monitoring.
Maintenance of Computer Hardware
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the maintenance of computer hardware used in market administration and monitoring.
(Operation)
580
Operation Supervision and Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of the operation of the distribution system. Direct supervision of specific activities, such as station operation, line operation, and meter department operation shall be charged to the
appropriate account. (See § 1767.17(a).)
581
Load Dispatching
This account (the keeping of which is optional with the utility) shall include the cost
of labor, employee pensions and benefits, social security and other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and expenses incurred in load dispatching operations pertaining to the distribution of electricity.
Items
Labor:
1. Direct switching.
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2. Arranging and controlling clearances for
construction, maintenance, test, and emergency purposes.
3. Controlling system voltages.
4. Preparing operating reports.
5. Obtaining reports on the weather and
special events.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Expenses:
1. Communication service provided for system control purposes.
2. System record and report forms.
3. Meals, traveling, and incidental expenses.
582
Station Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in the
operation of distribution substations.
Items
Labor:
1. Supervising station operation.
2. Adjusting station equipment where such
adjustment primarily affects performance,
such as regulating the flow of cooling water,
adjusting current in fields of a machine,
changing voltage of regulators, or changing
station transformer taps.
3. Keeping station log and records and preparing reports on station operation.
4. Inspecting, testing, and calibrating station equipment for the purpose of checking
its performance.
5. Operating switching and other station
equipment.
6. Standing watch, guarding, and patrolling station and station yard.
7. Sweeping, mopping, and tidying station.
8. Care of grounds, including snow removal,
and grass cutting.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
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1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Building service expenses.
2. Operating, supplies, such as lubricants,
commutator brushes, water, and rubber
goods.
3. Station meter and instrument supplies,
such as ink and charts.
4. Station record and report forms.
5. Tool expense.
6. Transportation expense.
7. Meals, traveling, and incidental
penses.
NOTE: If the utility owns storage battery
equipment used for supplying electricity to
customers in periods of emergency, the cost
of operating labor and of supplies, such as
acid, gloves, hydrometers, thermometers,
soda, automatic cell fillers, and acid proof
shoes shall be included in this account. If
significant in amount, a separate subdivision
shall be maintained for such expenses.
583
584
Overhead Line Expenses
Underground Line Expenses
These accounts shall include, respectively,
the cost of labor, employee pensions and benefits, social security and other payroll taxes,
injuries and damages, property insurance,
property taxes, materials used, and expenses
incurred in the operation of overhead and
underground distribution lines.
Items
Labor:
1. Supervising line operation.
2. Changing line transformer taps.
3. Inspecting and testing lightning arresters, line circuit breakers, switches, and
grounds.
4. Inspecting and testing line transformers
for the purpose of determining load, temperature, or operation performance.
5. Patrolling lines.
6. Load tests and voltage surveys of feeders, circuits, and line transformers.
7. Removing line transformers and voltage
regulators with or without replacement.
8. Installing line transformers or voltage
regulators with or without change in capacity provided that the cost of first installation of these items is included in Account
368, Line Transformers.
9. Voltage surveys, either routine or upon
request of customers, including voltage tests
at customer’s main switch.
10. Transferring loads, switching and reconnecting circuits and equipment for operation purpose.
11. Electrolysis surveys.
12. Inspecting and adjusting line testing
equipment.
Taxes:
1. Federal and State unemployment.
2. F.I.C.A,
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
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§ 1767.27
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Tool expense.
2. Transportation expense.
3. Meals, traveling, and incidental expenses.
4. Operating supplies, such as instrument
charts, and rubber goods.
585
Street Lighting and Signal System
Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in: (1)
The operation of street lighting and signal
system plant which is owned or leased by the
utility; and (2) the operation and maintenance of such plant owned by customers
where such work is done regularly as a part
of the street lighting and signal system service.
Items
Labor:
1. Supervising street lighting and signal
systems operation.
2. Replacing lamps and incidental cleaning
of glassware and fixtures in connection
therewith.
3. Routine patrolling for lamp outages, extraneous nuisances, or encroachments.
4. Testing lines and equipment including
voltage and current measurement.
5. Winding and inspection of time switch
and other controls.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
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1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Street lamp renewals.
2. Transportation and tool expense.
3. Meals, traveling, and incidental expenses.
586
Meter Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in the
operation of customer meters and associated
equipment.
Items
Labor:
1. Supervising meter operation.
2. Clerical work on meter history and associated equipment record cards, test cards,
and reports.
3. Disconnecting and reconnecting, removing and reinstalling, sealing and unsealing
meters and other metering equipment in
connection with initiating or terminating
services including the cost of obtaining
meter readings, if incidental to such operation.
4. Consolidating meter installations due to
elimination of separate meters for different
rates of service.
5. Changing or relocating meters, instrument transformers, time switches, and other
metering equipment.
6. Resetting time controls, checking operation of demand meters and other metering
equipment, when done as an independent operation.
7. Inspecting and adjusting meter testing
equipment.
8. Inspecting and testing meters, instrument transformers, time switches, and other
metering equipment on premises or in shops
excluding inspecting and testing incidental
to maintenance.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
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casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses
1. Meter seals and miscellaneous meter
supplies.
2. Transportation expenses.
3. Meals, traveling, and incidental expenses.
4. Tool expenses.
NOTE: The cost of the first setting and testing of a meter is chargeable to utility plant,
Account 370, Meters.
587
Customer Installations Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in
work on customer installations in inspecting
premises and in rendering services to customers of the nature of those indicated by
the list of items hereunder.
Items
Labor:
1. Supervising customer installations
work.
2. Inspecting premises, including the check
of wiring for code compliance.
3. Investigating, locating, and clearing
grounds on customers’ wiring.
4. Investigating service complaints, including load tests of motors and lighting and
power circuits on customers’ premises; field
investigations of complaints on bills or of
voltage.
5. Installing, removing, renewing, and
changing lamps and fuses.
6. Radio, television, and similar interference work including erection of new
aerials on customers’ premises and patrolling of lines, testing of lightning arresters,
inspection of pole hardware, and examination on or off premises of customers’ appli-
ances, wiring, or equipment to locate cause
of interference.
7. Installing, connecting, reinstalling, or
removing leased property on customers’
premises.
8. Testing, adjusting, and repairing customers’ fixtures and appliances in the shop
or on premises.
9. Cost of changing customers’ equipment
due to changes in service characteristics.
10. Investigation of current diversion including setting and removal of check meters
and securing special readings thereon; special calls by employees in connection with
discovery and settlement of current diversion; changes in customer wiring; and any
other labor cost identifiable as caused by
current diversion.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
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such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Lamp and fuse renewals.
2. Materials used in servicing customers’
fixtures, appliances, and equipment.
3. Power, light, heat, telephone, and other
expenses of the appliance repair department.
4. Tool expense.
5. Transportation expense, including pickup and delivery charges.
6. Meals, traveling, and incidental expenses.
7. Rewards paid for discovery of current diversion.
NOTE A: Amounts billed customers for any
work, the cost of which is charged to this account, shall be credited to this account. Any
excess over costs resulting therefrom, shall
be transferred to Account 451, Miscellaneous
Service Revenues.
NOTE B: Do not include in this account expenses incurred in connection with merchandising, jobbing, and contract work.
588 Miscellaneous Distribution Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in distribution system operation not
provided for elsewhere.
Items
Labor:
1. General records of physical characteristics of lines and substations, such as capacities.
2. Ground resistance records.
3. Joint pole maps and records.
4. Distribution system voltage and load
records.
5. Preparing maps and prints.
6. Service interruption and trouble records.
7. General clerical and stenographic work
except that chargeable to Account 586, Meter
Expenses.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Expenses:
1. Operating records covering poles, transformers, manholes, cables, and other distribution facilities. Exclude meter records
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§ 1767.27
chargeable to Account 586, Meter Expenses,
and station records chargeable to Account
582, Station Expenses, and stores records
chargeable to Account 163, Stores Expense
Undistributed.
2. Janitor work at distribution office buildings including snow removal and grass cutting.
3. Communication service.
4. Building service expenses.
5. Miscellaneous office supplies and expenses, printing and stationery, maps and
records, and first-aid supplies.
6. Research, development, and demonstration expenses.
589
Rents
This account shall include rents of property of others used, occupied, or operated in
connection with the distribution system, including payments to the United States and
others for the use and occupancy of public
lands and reservations for distribution line
rights of way. (See § 1767.17 (c).)
(Maintenance)
590 Maintenance Supervision and
Engineering
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general supervision and direction of maintenance of the distribution system. Direct field
supervision of specific jobs shall be charged
to the appropriate maintenance account.
(See § 1767.17(a).)
591
Maintenance of Structures
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of structures, the
book cost of which is includible in Account
361, Structures and Improvements. (See
§ 1767.17(b).)
592 Maintenance of Station Equipment
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of plant, the book
cost of which is includible in Account 362,
Station Equipment, and Account 363, Storage Battery Equipment. (See § 1767.17(b).)
593 Maintenance of Overhead Lines
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the maintenance of overhead distribution line facilities, the book cost of
which is includible in Account 364, Poles,
Towers and Fixtures; Account 365, Overhead
Conductors and Devices; and Account 369,
Services. (See § 1767.17(b).)
Items
1. Work of the following character on
poles, towers, and fixtures:
a. Installing additional clamps or removing clamps or strain insulators on guys in
place.
b. Moving line or guy pole in relocation of
pole or section of line.
c. Painting poles, towers, crossarms, or
pole extensions.
d. Readjusting and changing position of
guys or braces.
e. Realigning and straightening poles,
crossarms, braces, pins, racks, brackets, and
other pole fixtures.
f. Reconditioning reclaimed pole fixtures.
g. Relocating crossarms, racks, brackets,
and other fixtures on poles.
h. Repairing pole supported platform.
i. Repairs by others to jointly owned poles.
j. Shaving, cutting rot, or treating poles or
crossarms in use or salvaged for reuse.
k. Stubbing poles already in service.
l. Supporting conductors, transformers,
and other fixtures and transferring them to
new poles during pole replacements.
m. Maintaining pole signs, stencils, and
tags.
2. Work of the following character on overhead conductors and devices:
a. Overhauling and repairing line cutouts,
line switches, line breakers, and capacitor
installations.
b. Cleaning insulators and bushings.
c. Refusing line cutouts.
d. Repairing line oil circuit breakers and
associated relays and control wiring.
e. Repairing grounds.
f. Resagging, retying, or rearranging position or spacing of conductors.
g. Standing by phones, going to calls, cutting faulty lines clear, or similar activities
at times of emergency.
h. Sampling, testing, changing, purifying,
and replenishing insulating oil.
i. Transferring loads, switching, and reconnecting circuits and equipment for maintenance purposes.
j. Repairing line testing equipment.
k. Trimming trees and clearing brush.
l. Chemical treatment of right-of-way area
when occurring subsequent to construction
of line.
3. Work of the following character on overhead services:
a. Moving position of service either on pole
or on customers’ premises.
b. Pulling slack in service wire.
c. Retying service wire.
d. Refastening or tightening service bracket.
Taxes:
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1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
594
Maintenance of Underground Lines
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the maintenance of underground
distribution line facilities, the book cost of
which is includible in Account 366, Under-
ground Conduit; Account 367, Underground
Conductors and Devices; and Account 369,
Services. (See § 1767.17(b).)
Items
1. Work of the following character on underground conduit:
a. Cleaning ducts, manholes, and sewer
connections.
b. Moving or changing position of conduit
or pipe.
c. Minor alterations of handholes, manholes, or vaults.
d. Refastening, repairing, or moving racks,
ladders, or hangers in manholes or vaults.
e. Plugging and shelving ducts.
f. Repairs to sewers, drains, walls, and
floors, rings, and covers.
2. Work of the following character on underground conductors and devices:
a. Repairing circuit breakers, switches,
cutouts, network protectors, and associated
relays and control wiring.
b. Repairing grounds.
c. Retraining and reconnecting cables in
manholes including transfer of cables from
one duct to another.
d. Repairing conductors and splices.
e. Repairing or moving junction boxes and
potheads.
f. Refireproofing cables and repairing supports.
g. Repairing electrolysis preventive devices for cables.
h. Repairing cable bonding systems.
i. Sampling, testing, changing, purifying,
and replenishing insulating oil.
j. Transferring loads, switching and reconnecting circuits and equipment for maintenance purposes.
k. Repairing line testing equipment.
l. Repairing oil or gas equipment in high
voltage cable systems and replacement of oil
or gas.
3. Work of the following character on underground services:
a. Cleaning ducts.
b. Repairing any underground service
plant.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
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2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
595
Maintenance of Line Transformers
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of distribution line
transformers, the book cost of which is includible in Account 368, Line Transformers.
(See § 1767.17(b).)
596
Maintenance of Street Lighting and
Signal Systems
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of plant, the book
cost of which is includible in Account 373,
Street Lighting and Signal Systems. (See
§ 1767.17(b).)
597
Maintenance of Meters
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in the maintenance of meters and
meter testing equipment, the book cost of
which is includible in Account 370, Meters,
and Account 395, Laboratory Equipment, respectively. (See § 1767.17(b).)
598
Maintenance of Miscellaneous
Distribution Plant
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in maintenance of plant, the book
cost of which is includible in Accounts 371,
Installations on Customers’ Premises, and
Account 372, Leased Property on Customers’
Premises, and any other plant the maintenance of which is assignable to the distribution function and is not provided for elsewhere. (See § 1767.17(b).)
Items
1. Work of similar nature to that listed in
other distribution maintenance accounts.
2. Maintenance of office furniture and
equipment used by distribution system department.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
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1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
[58 FR 59825, Nov. 10, 1993, as amended at 62
FR 42291, Aug. 6, 1997; 73 FR 20286, May 27,
2008]
§ 1767.28 Customer accounts expenses.
The customer accounts expense accounts identified in this section shall
be used by all RUS borrowers.
CUSTOMER ACCOUNTS EXPENSES
(Operation)
Supervision
Meter Reading Expenses
Customer Records and Collection Expenses
904 Uncollectible Accounts
905 Miscellaneous Customer Accounts Expenses
CUSTOMER ACCOUNTS EXPENSES
(Operation)
Supervision
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general direction and supervision of customer
accounting and collecting activities. Direct
supervision of a specific activity shall be
charged to Account 902, Meter Reading Expenses, or Account 903, Customer Records
and Collection Expenses, as appropriate. (See
§ 1767.17(a).)
902
Items
Labor:
1. Addressing forms for obtaining meter
readings by mail.
2. Changing and collecting meter charts
used for billing purposes.
3. Inspecting time clocks and checking
seals when performed by meter readers and
the work represents a minor activity incidental to regular meter reading routine.
4. Reading meters, including demand meters, and obtaining load information for billing purposes. Exclude and charge to Account
586, Meter Expenses, or to Account 903, Customer Records and Collection Expenses, as
applicable, the cost of obtaining meter readings, first and final, if incidental to the operation of removing or resetting, sealing or
locking, and disconnecting or reconnecting
meters.
5. Computing consumption from meter
reader’s book or from reports by mail when
done by employees engaged in reading meters.
6. Collecting from prepayment meters
when incidental to meter reading.
7. Maintaining record of customers’ keys.
8. Computing estimated or average consumption when performed by employees engaged in reading meters.
Taxes:
901
902
903
901
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in reading customer meters, and determining consumption when performed by
employees engaged in reading meters.
Meter Reading Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
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Rural Utilities Service, USDA
§ 1767.28
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Badges, lamps, and uniforms.
2. Demand charts, meter books and binders
and forms for recording readings, but not the
cost of preparation.
3. Postage and supplies used in obtaining
meter readings by mail.
4. Transportation, meals, and incidental
expenses.
903
Customer Records and Collection
Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in work on customer applications,
contracts, orders, credit investigations, billing and accounting, collections and complaints.
Items
Labor:
1. Receiving, preparing, recording, and
handling routine orders for service, disconnections, transfers or meter tests initiated by the customer, excluding the cost of
carrying out such orders, which is chargeable to the account appropriate for the work
called for by such orders.
2. Investigations of customers’ credit and
keeping of records pertaining thereto, including records of uncollectible accounts
written off.
3. Receiving, refunding, or applying customer deposits and maintaining customer
deposit, line extension, and other miscellaneous records.
4. Checking consumption shown by meter
readers’ reports where incidental to preparation of billing date.
5. Preparing address plates and addressing
bills and delinquent notices.
6. Preparing billing data.
7. Operating billing and bookkeeping machines.
8. Verifying billing records with contracts
or rate schedules.
9. Preparing bills for delivery and mailing
or delivering bills.
10. Collecting revenues, including collection from prepayment meters, unless incidental to meter-reading operations.
11. Balancing collections, preparing collections for deposit, and preparing cash reports.
12. Posting collections and other credits or
charges to customer accounts and extending
unpaid balances.
13. Balancing customer accounts and controls.
14. Preparing, mailing, or delivering delinquent notices and preparing reports of delinquent accounts.
15. Final meter reading of delinquent accounts when done by collectors incidental to
regular activities.
16. Disconnecting and reconnecting service
because of nonpayment bills.
17. Receiving, recording, and handling of
inquiries, complaints, and requests for investigations from customers, including preparation of necessary orders, but excluding the
cost of carrying out such orders, which is
chargeable to the account appropriate for
the work called for by such orders.
18. Statistical and tabulating work on customer accounts and revenues, but not including special analyses for sales department,
rate department, or other general purposes,
unless incidental to regular customer accounting routines.
19. Preparing and periodically rewriting
meter reading sheets.
20. Determining consumption and computing estimated or average consumption
when performed by employees other than
those engaged in reading meters.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
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§ 1767.28
7 CFR Ch. XVII (1–1–12 Edition)
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Address plates and supplies.
2. Cash overages and shortages.
3. Commissions or fees to others for collecting.
4. Payments to credit organizations for investigations and reports.
5. Postage.
6. Transportation expenses, including
transportation of customer bills and meter
books under centralized billing procedures.
7. Transportation, meals expenses, and incidental expenses.
8. Bank charges, exchange, and other fees
for cashing and depositing customers’
checks.
9. Forms for recording orders for services,
or removals.
10. Rent of mechanical equipment.
NOTE: The cost of work on meter history
and meter location records in chargeable to
Account 586, Meter Expenses.
904
Uncollectible Accounts
This amount shall be charged with
amounts sufficient to provide for losses from
uncollectible utility revenues. Concurrent
credits shall be made to Account 144, Accumulated Provision for Uncollectible Accounts—Credit. Losses from uncollectible accounts shall be charged to Account 144.
905
Miscellaneous Customer Accounts
Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred not
provided for in other accounts.
Items
Labor:
1. General clerical and stenographic work.
2. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein, or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
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Rural Utilities Service, USDA
§ 1767.29
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Communication service.
2. Miscellaneous office supplies and expenses and stationery and printing other
than those specifically provided for in Account 902 and Account 903.
[58 FR 59825, Nov. 10, 1993, as amended at 62
FR 42311, Aug. 6, 1997; 62 FR 43201, Aug. 12,
1997]
§ 1767.29 Customer service and informational expenses.
The customer service and informational expense accounts identified in
this section shall be used by all RUS
borrowers.
CUSTOMER SERVICE AND INFORMATIONAL
EXPENSES
(Operation)
907
908
909
Supervision
Customer Assistance Expenses
Informational and Instructional Advertising Expenses
910 Miscellaneous Customer Service and Informational Expenses
CUSTOMER SERVICE AND INFORMATIONAL
EXPENSES
(Operation)
907
Supervision
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general direction and supervision of customer
service activities, the object of which is to
encourage safe, efficient, and economical use
of the utility’s service. Direct supervision of
a specific activity within customer service
and informational expense classification
shall be charged to the account wherein the
costs of such activity are included. (See
§ 1767.17(a).)
908
Customer Assistance Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in providing instructions or assistance to customers, the object of which is to
encourage safe, efficient, and economical use
of the utility’s service.
Items
Labor:
1. Direct supervision of department.
2. Processing customer inquiries relating
to the proper use of electric equipment, the
replacement of such equipment, and information related to such equipment.
3. Advice directed to customers as to how
they may achieve the most efficient and
safest use of electric equipment.
4. Demonstrations, exhibits, lectures, and
other programs designed to instruct customers in the safe, economical, or efficient
use of electric service, and/or oriented toward conservation of energy.
5. Engineering and technical advice to customers, the object of which is to promote
safe, efficient, and economical use of the
utility’s service.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
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§ 1767.29
7 CFR Ch. XVII (1–1–12 Edition)
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Supplies and expenses pertaining to demonstrations, exhibits, lectures, and other
programs.
2. Loss in value on equipment and appliances used for customer assistance programs.
3. Office supplies and expenses.
4. Transportation, meals, and incidental
expenses.
NOTE: Do not include in this account expenses that are provided for elsewhere, such
as Accounts 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work; 587,
Customer Installations Expenses; and 912,
Demonstrating and Selling Expenses.
909
Informational and Instructional
Advertising Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses in-
curred in activities which primarily convey
information as to what the utility urges or
suggests customers should do in utilizing
electric service to protect health and safety,
to encourage environmental protection, to
utilize their electric equipment safely and
economically, or to conserve electric energy.
Items
Labor:
1. Direct supervision of information activities.
2. Preparing informational materials for
newspapers, periodicals, and billboards and
preparing and conducting informational motion pictures, radio and television programs.
3. Preparing informational booklets and
bulletins used in direct mailings.
4. Preparing informational window and
other displays.
5. Employing agencies, selecting media,
and conducting negotiations in connection
with the placement and subject matter of information programs.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
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§ 1767.29
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Use of newspapers, periodicals, billboards, and radio for informational purposes.
2. Postage on direct mailings to customers
exclusive of postage related to billings.
3. Printing of informational booklets,
dodgers, and bulletins.
4. Supplies and expenses in preparing informational materials by the utility.
5. Office supplies and expenses.
NOTE A: Exclude from this account and
charge to Account 930.2, Miscellaneous General Expenses, the cost of publication of
stockholder reports, dividend notices, bond
redemption notices, financial statements,
and other notices of a general corporate
character. Also exclude all expenses of a promotional, institutional, goodwill, or political nature, which are includible in such accounts as 913, Advertising Expenses; 930.1,
General Advertising Expenses; and 426.4, Expenditures for Certain Civic, Political and
Related Activities.
NOTE B: Entries relating to informational
advertising included in this account shall
contain or refer to supporting documents
which identify the specific advertising message. If references are used, copies of the advertising message shall be readily available.
910
Miscellaneous Customer Service and
Informational Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in connection with customer service and informational activities which are not includible in
other customer information expense accounts.
Items
Labor:
1. General clerical and stenographic work
not assigned to specific customer service and
informational programs.
2. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
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§ 1767.30
7 CFR Ch. XVII (1–1–12 Edition)
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Communication service.
2. Printing, postage, and office supplies expenses.
[58 FR 59825, Nov. 10, 1993, as amended at 62
FR 42313, Aug. 6, 1997]
§ 1767.30
Sales expenses.
The sales expense accounts identified
in this section shall be used by all RUS
borrowers.
SALES EXPENSES
(Operation)
911 Supervision
912 Demonstrating and Selling Expenses
913 Advertising Expenses
916 Miscellaneous Sales Expenses
SALES EXPENSES
(Operation)
911
Supervision
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, and expenses incurred in the general direction and supervision of sales activities, except merchandising. Direct supervision of a specific activity, such as demonstrating, selling, or advertising shall be
charged to the account wherein the costs of
such activity are included. (See § 1767.17(a).)
912
Demonstrating and Selling Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in promotional, demonstrating, and
selling activities, except by merchandising,
the object of which is to promote or retain
the use of utility services by present and
prospective customers.
Items
Labor:
1. Demonstrating uses of utility services.
2. Conducting cooking schools, preparing
recipes, and related home service activities.
3. Exhibitions, displays, lectures, and other
programs designed to promote use of utility
services.
4. Experimental and development work in
connection with new and improved appli-
ances and equipment, prior to general public
acceptance.
5. Solicitation of new customers or of additional business from old customers, including commissions paid employees.
6. Engineering and technical advice to
present or prospective customers in connection with promoting or retaining the use of
utility services.
7. Special customer canvasses when their
primary purpose is the retention of business
or the promotion of new business.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
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Rural Utilities Service, USDA
§ 1767.30
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Supplies and expenses pertaining to demonstration, experimental, and development
activities.
2. Booth and temporary space rental.
3. Loss in value on equipment and appliances used for demonstration purposes.
4. Transportation, meals, and incidental
expenses.
913 Advertising Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in advertising designed to promote or
retain the use of utility service, except advertising the sale of merchandise by the utility.
Items
Labor:
1. Direct supervision of department.
2. Preparing advertising material for newspapers, periodicals, and billboards, and preparing and conducting motion pictures,
radio, and television programs.
3. Preparing booklets and bulletins used in
direct mail advertising.
4. Preparing window and other displays.
5. Clerical and stenographic work.
6. Investigating advertising agencies and
media and conducting negotiations in connection with the placement and subject matter of sales advertising.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond pe-
riods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Advertising in newspapers, periodicals,
billboards, and radio for sales promotion purposes, but not including institutional or
goodwill advertising includible in Account
930.1, General Advertising Expenses.
2. Materials and services given as prizes or
otherwise in connection with civic lighting
contests, canning, or cooking contests, and
bazaars in order to publicize and promote the
use of utility services.
3. Fees and expenses of advertising agencies and commercial artists.
4. Novelties for general distribution.
5. Postage on direct mail advertising.
6. Premiums distributed generally, such as
recipe books when not offered as inducement
to purchase appliances.
7. Printing booklets, dodgers, and bulletins.
8. Supplies and expenses in preparing advertising material.
9. Office supplies and expenses.
NOTE A: The cost of advertisements which
set forth the value or advantages of utility
service without reference to specific appliances, or, if reference is made to appliances,
invites the reader to purchase appliances
from his dealer or refer to appliances not
carried for sale by the utility, shall be considered sales promotion advertising and
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§ 1767.30
7 CFR Ch. XVII (1–1–12 Edition)
charged to this account. However, advertisements which are limited to specific makes of
appliances sold by the utility and price and
terms, thereof, without referring to the
value or advantages of utility service, shall
be considered as merchandise advertising
and the cost shall be charged to Costs and
Expenses of Merchandising, Jobbing and
Contract Work, Account 416.
NOTE B: Advertisements which substantially mention or refer to the value or advantages of utility service, together with specific reference to makes of appliance sold by
the utility and the price, and terms, thereof,
and designed for the joint purpose of increasing the use of utility service and the sales of
appliances, shall be considered as a combination advertisement and the costs shall be
distributed between this account and Account 416 on the basis of space, time, or
other proportional factors.
NOTE C: Exclude from this account and
charge to Account 930.2, Miscellaneous General Expenses, the cost of publication of
stockholder reports, dividend notices, bond
redemption notices, financial statements,
and other notices of a general corporate
character. Also exclude all institutional or
goodwill advertising. (See Account 930.1,
General Advertising Expenses.)
916
Miscellaneous Sales Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
materials used, and expenses incurred in connection with sales activities, except merchandising, which are not includible in other
sales expense accounts.
Items
Labor:
1. General clerical and stenographic work
not assigned to specific functions.
2. Special analysis of customer accounts
and other statistical work for sales purposes
not a part of the regular customer accounting and billing routine.
3. Miscellaneous labor.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Communication service.
2. Printing, postage, office supplies, and expenses applicable to sales activities, except
those chargeable to Account 913, Advertising
Expenses.
[58 FR 59825, Nov. 10, 1993, as amended at 62
FR 42315, Aug. 6, 1997]
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Rural Utilities Service, USDA
§ 1767.31
§ 1767.31 Administrative and general
expenses.
The administrative and general expense accounts identified in this section shall be used by all RUS borrowers.
penses other than the administrative and
general category shall be included in the appropriate account in such category. Further,
general expenses which apply to the utility
as a whole rather than to a particular administrative function, shall be included in
Account 930.2, Miscellaneous General Expenses.
ADMINISTRATIVE AND GENERAL
Items
(Operation)
920
921
922
Administrative and General Salaries
Office Supplies and Expenses
Administrative Expenses Transferred—
Credit
923 Outside Services Employed
924 Property Insurance
925 Injuries and Damages
926 Employee Pensions and Benefits
927 Franchise Requirements
928 Regulatory Commission Expenses
929 Duplicate Charges—Credit
930.1 General Advertising Expenses
930.2 Miscellaneous General Expenses
931 Rents
(Maintenance)
935
Maintenance of General Plant
ADMINISTRATIVE AND GENERAL
(Operation)
920
Administrative and General Salaries
A. This account shall include the compensation (salaries, bonuses, employee pensions and benefits, social security and other
payroll taxes, injuries and damages, and
other consideration for services, but not including directors’ fees) of officers, executives, and other employees of the utility
properly chargeable to utility operations and
not chargeable directly to a particular operating function.
B. This account may be subdivided in accordance with a classification appropriate to
the departmental or other functional organization of the utility.
921
Office Supplies and Expenses
A. This account shall include office supplies and expenses incurred in connection
with the general administration of the utility’s operations which are assignable to specific administrative or general departments
and are not specifically provided for in other
accounts. This includes the expenses of the
various administrative and general departments, the salaries and wages of which are
includible in Account 920.
B. This account may be subdivided in accordance with a classification appropriate to
the departmental or other functional organization of the utility.
NOTE: Office expenses which are clearly applicable to any category of operating ex-
1. Automobile service, including charges
through clearing account.
2. Bank messenger and service charges.
3. Books, periodicals, bulletins, and subscriptions to newspapers, newsletters, and
tax services.
4. Building service expenses for customer
accounts, sales, and administrative and general purposes.
5. Communication service expenses.
6. Cost of individual items of office equipment used by general departments which are
of small value or short life.
7. Membership fees and dues in trade, technical, and professional associations paid by a
utility for employees. (Company memberships are includible in Account 930.2.)
8. Office supplies and expenses.
9. Payment of court costs, witness fees, and
other expenses of legal department.
10. Postage, printing, and stationery.
11. Meals, traveling, and incidental expenses.
922
Administrative Expenses Transferred—
Credit
This account shall be credited with administrative expenses recorded in Account 920
and Account 921 which are transferred to
construction costs or to nonutility accounts.
(See § 1767.16 (d).)
923
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 operating function or
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 as 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, and tax consultants.
2. Supervision fees and expenses paid under
contracts for general management services.
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§ 1767.31
7 CFR Ch. XVII (1–1–12 Edition)
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.
924
Property Insurance
A. This account shall include the cost of
insurance or reserve accruals to protect the
utility against losses and damages to owned
or leased property used in its utility operations. It shall also include the cost of labor,
employee pensions and benefits, social security and other payroll taxes, injuries and
damages, and the related supplies and expenses incurred in property insurance activities.
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. Records shall be kept so as to show the
amount of coverage for each class of insurance carried, the property covered, and the
applicable premiums. Any dividends distributed by mutual insurance companies shall be
credited to the accounts to which the insurance premiums were charged.
Items
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
NOTE A: The cost of insurance or reserve
accruals capitalized, shall be charged to construction and retirement either directly or
by transfers to construction and retirement
work orders from this account.
NOTE B: The cost of insurance or reserve
accruals for the following classes of property
shall be charged as indicated:
1. Materials, supplies, and stores equipment to Account 163, Stores Expense Undistributed, or appropriate materials account.
2. Transportation and other general equipment to appropriate clearing accounts that
may be maintained.
3. Electric plant leased to others to Account 413, Expenses of Electric Plant Leased
to Others.
4. Nonutility property to the appropriate
nonutility income account.
5. Merchandise and jobbing property to Account 416, Costs and Expenses of Merchandising, Jobbing and Contract Work.
NOTE C: The cost of labor, employee pensions and benefits, social security and other
payroll taxes, and the related supplies and
expenses of administrative and general employees who are only incidentally engaged in
property insurance work may be included in
Account 920 and Account 921, as appropriate.
NOTE D: The cost of insurance or reserve
accruals applicable to the various utility
functions shall be charged to the specific
functional operations and the appropropriate
miscellaneous administrative expense accounts either directly or by transfers from
this account.
925
Injuries and Damages
A. This account shall include the cost of
insurance or reserve accruals 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. It shall also include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, related supplies, and expenses incurred in injuries and damages activities.
B. Reimbursements from insurance companies or others for expenses charged hereto on
account of injuries, damages, and insurance
dividends or refunds shall be credited to this
account.
Items
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
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Rural Utilities Service, USDA
§ 1767.31
NOTE A: Payments to or in behalf of employees for accident or death benefits, hospital expenses, medical expenses, or for salaries while incapacitated for service or on
leave of absence beyond periods normally allowed, when not the result of occupational
injuries, shall be charged to Account 926,
Employee Pensions and Benefits. (See also
Note B of Account 926.)
NOTE B: The cost of injuries and damages
or reserve accruals capitalized shall be
charged to construction and retirement activities either directly or by transfers from
this account to the applicable construction
and retirement work orders.
NOTE C: The cost of insurance or reserve
accruals applicable to the various utility
functions shall be charged to the specific
functional operations and the appropropriate
miscellaneous administrative expense accounts either directly or by transfers from
this account.
NOTE D: Exclude herefrom the time and expenses of employees (except those engaged in
injuries and damages activities) spent in attendance at safety and accident prevention
educational meetings, if occurring during
the regular work period.
NOTE E: The cost of labor, employee pensions and benefits, social security and other
payroll taxes, and the related supplies and
expenses of administrative and general employees who are only incidentally engaged in
injuries and damages activities, may be included in Account 920 and Account 921, as appropriate.
926
Employee 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 this 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 payments 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 and administrative
expenses in connection with employee pensions and benefits.
B. The utility shall maintain a complete
record of accruals or payments for pensions
and be prepared to furnish full information
to RUS 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,
the specific functional operations, maintenance, and administrative expense accounts,
and to construction and retirement activi-
ties unless such amounts are distributed directly to the accounts involved and are not
included herein in the first instance.
D. Records in support of this account shall
be so kept that the total pensions expense,
the total benefits expense, the administrative expenses included herein, and the
amounts of pensions and benefits expenses
transferred to the operations, maintenance,
administrative, construction or retirement
accounts will be readily available.
Items
1. Payment of pensions to retirees on a
nonaccrual basis.
2. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
3. Group and life insurance premiums
(credit dividends received).
4. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
5. Payments for accident, sickness, hospital, and death benefits or insurance.
6. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
7. Expenses in connection with educational
and recreational activities for the benefit of
employees.
NOTE A: The cost of labor, employee pensions and benefits, social security and other
payroll taxes, injuries and damages, and the
related supplies and expenses of administrative and general employees who are only incidentally engaged in employee pension and
benefit activities may be included in Account 920 and Account 921, as appropriate.
NOTE B: Salaries paid to employees during
periods of nonoccupational sickness may be
charged to the appropriate labor account
rather than to employee benefits.
927
Franchise Requirements
A. This account shall include payments to
municipal or other governmental authorities
and the cost of materials, supplies, and services furnished such authorities without reimbursement in compliance with franchise, ordinance, or similar requirements; provided,
however, that the utility may charge to this
account at regular tariff rates, instead of
cost, utility service furnished without
charge under provisions of franchises.
B. When no direct outlay is involved, concurrent credit for such charges shall be made
to Account 929, Duplicate Charges—Credit.
C. The account shall be maintained so as
to readily reflect the amounts of cash outlays, utility service supplied without charge,
and other items furnished without charge.
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§ 1767.31
7 CFR Ch. XVII (1–1–12 Edition)
NOTE A: Franchise taxes shall not be
charged to this account, but to Account
408.1, Taxes Other Than Income Taxes, Utility Operating Income.
NOTE B: Any amount paid as initial consideration for a franchise running for more than
one year shall be charged to Account 302,
Franchises and Consents.
928
Regulatory Commission Expenses
A. This account shall include all expense
(except pay of regular employees only incidentally engaged in such work) properly 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, and also including
payments made to the United States for the
administration of the Federal Power Act.
B. Amounts of regulatory commission expenses which, by approval or direction of
RUS, are to be spread over future periods
shall be charged to Account 182.3, Other Regulatory Assets, and amortized by charges to
this account.
C. The utility shall be prepared to show
the cost of each formal case.
Items
1. Salaries, fees, retainers, and expenses of
counsel, solicitors, attorneys, accountants,
engineers, clerks, attendants, witnesses, and
others engaged in the prosecution of or
defence against petitions or complaints presented to regulatory bodies or in the valuation of property owned or used by the utility in connection with such cases.
2. Office supplies and expenses, payments
to public service or other regulatory commissions, stationery and printing, traveling
expenses, and other expenses incurred directly in connection with formal cases before
regulatory commissions.
NOTE A: Exclude from this account and include in other appropriate operating expense
accounts, expenses incurred in the improvement of service, additional inspection, or
rendering reports which are made necessary
by the rules and regulations, or orders, of
regulatory bodies.
NOTE B: Do not include in this account
amounts includible in Account 302, Franchises
and
Consents;
Account
181,
Unamortized Debt Expense; or Account 214,
Capital Stock Expense.
929
Duplicate Charges—Credit
This account shall include concurrent
credits for charges which may be made to operating expenses or to other accounts for the
use of utility service from its own supply. In-
clude, also, offsetting credits for any other
charges made to operating expenses for
which there is no direct money outlay.
930.1
General Advertising Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, materials used, and expenses incurred in advertising and related activities,
the cost of which by their content and purpose are not provided for elsewhere.
Items
Labor:
1. Supervision.
2. Preparing advertising material for newspapers, periodicals, and billboards and preparing or conducting motion pictures, radio,
and television programs.
3. Preparing booklets and bulletins used in
direct mail advertising.
4. Preparing window and other displays.
5. Clerical and stenographic work.
6. Investigating and employing advertising
agencies, selecting media, and conducting
negotiations in connection with the placement and subject matter of advertising.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
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Rural Utilities Service, USDA
§ 1767.31
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
2. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
3. Fees and expenses of claim investigators.
4. Payment of awards to claimants for
court costs and attorneys’ services.
5. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
6. Compensation payments under workmen’s compensation laws.
7. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
8. Cost of safety, accident prevention, and
similar educational activities.
Materials and Expenses:
1. Advertising in newspapers, periodicals,
billboards, and radios.
2. Advertising matter such as posters, bulletins, booklets, and related items.
3. Fees and expenses of advertising agencies and commercial artists.
4. Postage and direct mail advertising.
5. Printing of booklets, dodgers, and bulletins.
6. Supplies and expenses in preparing advertising materials.
7. Office supplies and expenses.
NOTE A: Properly includible in this account is the cost of advertising activities on
a local or national basis of a goodwill or institutional nature, which is primarily designed to improve the image of the utility or
the industry, including advertisements
which inform the public concerning matters
affecting the company’s operations, such as,
the cost of providing service, the company’s
efforts to improve the quality of service, and
the company’s efforts to improve and protect
the environment. Entries relating to advertising included in this account shall contain
or refer to supporting documents which identify the specific advertising message. If references are used, copies of the advertising
message shall be readily available.
NOTE B: Exclude from this account and include in Account 426.4, Expenditures for Certain Civic, Political and Related Activities,
expenses for advertising activities, which are
designed to solicit public support or the support of public officials in matters of a political nature.
930.2
Miscellaneous General Expenses
This account shall include the cost of
labor, employee pensions and benefits, social
security and other payroll taxes, injuries and
damages, property insurance, property taxes,
and expenses incurred in connection with the
general management of the utility not provided for elsewhere.
Items
Labor:
1. Miscellaneous labor not elsewhere provided for.
Taxes:
1. Federal and state unemployment.
2. F.I.C.A.
3. Property.
Employee Pensions and Benefits: The portion
of employee pensions and benefits specifically identifiable with employees’ labor
costs charged herein or, in the absence of
specific employee identification, the portion
of employee pensions and benefits, allocated
on the more equitable basis of either direct
labor dollars or direct labor hours, applicable to the labor items detailed above, including:
1. Accruals for or payments to pension
funds or to insurance companies for pension
purposes.
2. Group and life insurance premiums
(credit dividends received).
3. Payments for medical and hospital services and expenses of employees when not the
result of occupational injuries.
4. Payments for accident, sickness, hospital, and death benefits or insurance.
5. Payments to employees incapacitated
for service or on leave of absence beyond periods normally allowed when not the result
of occupational injuries or in excess of statutory awards.
6. Expenses in connection with educational
and recreational activities for the benefit of
employees.
Insurance:
1. Premiums payable to insurance companies for fire, storm, burglary, boiler explosion, lightning, fidelity, riot, and similar insurance.
2. Amounts credited to Account 228.1, Accumulated Provision for Property Insurance,
for similar protection.
3. Special costs incurred in procuring insurance.
4. Insurance inspection service.
5. Insurance counsel, brokerage fees, and
expenses.
6. Premiums payable to insurance companies for protection against claims from injuries and damages by employees or others,
such as public liability, property damages,
casualty, employee liability, etc., and
amounts credited to Account 228.2, Accumulated Provision for Injuries and Damage, for
similar protection.
7. Losses not covered by insurance or reserve accruals on account of injuries or
deaths to employees or others and damages
to the property of others.
8. Fees and expenses of claim investigators.
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§§ 1767.32–1767.40
7 CFR Ch. XVII (1–1–12 Edition)
9. Payment of awards to claimants for
court costs and attorneys’ services.
10. Medical and hospital service and expenses for employees as the result of occupational injuries or resulting from claims of
others.
11. Compensation payments under workmen’s compensation laws.
12. Compensation paid while incapacitated
as the result of occupational injuries. (See
Account 924, Note A.)
13. Cost of safety, accident prevention, and
similar educational activities.
Expenses:
1. Industry association dues for company
memberships.
2. Contributions for conventions and meetings of the industry.
3. Research, development, and demonstration expenses not charged to other operation
and maintenance expense accounts on a
functional basis.
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. 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.
931
Rents
This account shall include rents properly
includible in utility operating expenses for
the property of others used, occupied, or operated in connection with the customer accounts, customer service and informational,
sales, general, and administrative functions
of the utility. (See § 1767.17 (c).)
(Maintenance)
935
Maintenance of General Plant
A. This account shall include the cost assignable to customer accounts, sales, administrative, and general functions of labor, employee pensions and benefits, social security
and other payroll taxes, injuries and damages, materials used, and expenses incurred
in the maintenance of property, the book
cost of which is includible in Account 390,
Structures and Improvements; Account 391,
Office Furniture and Equipment; Account
397, Communication Equipment; and Account 398, Miscellaneous Equipment. (See
§ 1767.17(b).)
B. Maintenance expenses on office furniture and equipment used elsewhere than in
general, commercial, and sales offices shall
be charged to the following accounts:
1. Steam Power Generation, Account 514.
2. Nuclear Power Generation, Account 532.
3. Hydraulic Power Generation, Account
545.
4. Other Power Generation, Account 554.
5. Transmission, Account 573.
6. Distribution, Account 598.
7. Merchandise and Jobbing, Account 416.
8. Garages, Shops, etc., Appropriate clearing account, if used.
NOTE: Maintenance of plant included in
other general equipment accounts shall be
included herein unless charged to clearing
accounts or to the particular functional
maintenance expense account indicated by
the use of the equipment.
[58 FR 59825, Nov. 10, 1993, as amended at 62
FR 42317, Aug. 6, 1997]
§§ 1767.32–1767.40
[Reserved]
§ 1767.41 Accounting methods and procedures required of all RUS borrowers.
All RUS borrowers shall maintain
and keep their books of accounts and
all other books and records which support the entries in such books of accounts in accordance with the accounting principles prescribed in this section. Interpretations Nos. 133, 134, 137,
403, 404, 602, 606, 618, 627, 628, and 629
adopt and implement the provisions of
standards issued by the Financial Accounting Standards Board (FASB).
Each interpretation includes a synopsis
of the requirements of the standard as
well as specific accounting requirements and interpretations required by
RUS. The synopsis provides general information to assist borrowers in determining whether the standard applies to
an individual cooperative’s operations.
The synopsis is not intended to change
the requirements of the FASB standards unless it is set forth in the section
entitled RUS Accounting Requirements in each interpretation. If a particular borrower believes a conflict exists between the FASB standard and an
RUS interpretation, the borrower shall
contact the Director, PASD, to seek
resolution of the issue.
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Rural Utilities Service, USDA
§ 1767.41
Numerical Index
Number
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
201
301
401
402
403
404
501
Numerical Index—Continued
Number
Title
Work Order Procedures
Line Conversion
Sacrificial Anodes and the Replacement of a Neutral
Terminal Facilities
Pole Top Disconnect Switch
Steel Pole Reinforcers
Mobile Substations
Security Lights
Joint Use
First Clearing and Grading of Land
and Rights of Way
Engineering Contracts for System
Planning
Determination of Availability of
Service
Temporary Facilities (Services)
Construction
Work-in-Progress
Damaged or Destroyed by Storm
Liquidated Damages
Nonrefundable Payments for Construction
Refunds of Overpayments for Materials and Equipment
Load Control Equipment
Special Equipment
Meter Sockets and Meters
Minimum—Maximum Voltmeters
Retrofitting Demand Meters
Transformer Conversions
Transclosures
Retirement Units
Establishment of Continuing Property Records
Continuing Property Records for
Buildings
Sale of Property
Gain or Loss on the Sale of an Office
Building
Salvage and Obsolete Material
Plant Acquisition Adjustments
General Plant
Plant Abandonments and Disallowances of Plant Cost
Utility Plant Phase-in Plans
Accounting for Removal or Relocation of Electric Facilities Resulting from the Action of Others
Storm Damage
Impairment of Long-Lived Assets.
Automatic Meter Reading SystemsTurtles.
Global Positioning Systems.
Radio-Based Automatic Meter Reading Systems.
Supplemental Financing
Forfeited Customers’ Deposits
Computer Software Costs
Legal Expenses
Leases
Consolidated Financial Statements
Patronage Capital Assignments
502
503
504
505
506
601
602
603
604
605
606
607
608
609
610
611
612
613
614
615
616
617
618
619
620
621
622
623
624
625
626
627
628
629
630
631
633
Title
Patronage Capital Retirements
Operating and Nonoperating Margins
Patronage Capital from G&T Cooperatives
Patronage Capital Furnished by
Other Cooperative Service Organizations
Forfeited Membership Fees
Employee Benefits
Compensated Absences
Employee Retirement and Group Insurance
Deferred Compensation
Life Insurance Premium on Life of a
Borrower Employee
Pension Costs
Unproductive Time
Training Costs, Attendance at Meetings, etc.
Maintenance and Operations
Financial Forecast
Advertising Expense
Special Power Cost Study
Mapping Costs
Member Relations Costs
Statewide Fees
Power Supply/Distribution Cooperative Borrowings
Rate Discount Allowed by the
Power Cooperative to Distribution
Cooperative Owning Connecting
Transmission Lines
Theft Losses not Covered by Insurance
Self Billing
Purchase Rebates
Integrity Fund
In-Substance Defeasance
Satellite or Cable Television Services
Pollution Control Bonds
Prepayment of Debt
Rural Economic Development Loan
and Grant Program
Postretirement Benefits
Postemployment Benefits
Investments in Debt and Equity Securities
Split Dollar Life Insurance.
Special Early Retirement Plan.
Cushion of Credit.
Subject Matter Index
Number
A
Abandonments—Plant .......................
Acquisition Adjustments—Plant ......
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133
131
§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Subject Matter Index—Continued
Subject Matter Index—Continued
Number
Advertising Expenses ........................
Assignments—Patronage Capital ......
Attendance at Meetings ....................
Automatic Meter Reading Systems—
Radio-Based ...................................
Automatic Meter Reading Systems—
Turtles ...........................................
Availability of Service—Determination of ............................................
B
Benefits—Employee ..........................
Bonds—Pollution Control .................
Borrowing—Power Supply Cooperative/Distribution Cooperative ........
Buildings—Continuing
Property
Records ..........................................
Buildings, Office—Gain or Loss on
Sale of ............................................
C
Cable Television Services .................
Capital Credits—Assignment ............
Capital Credits—G&T Cooperative ....
Capital Credits—Other Service Cooperatives .......................................
Capital Credits—Retirement .............
Compensated Absences ......................
Computer Software Costs ..................
Consolidated Financial Statements ..
Construction Work in Progress Damaged or Destroyed by Storm ..........
Continuing Property Records—Buildings ................................................
Continuing Property Records—Establishment of ................................
Contributions—Nonrefundable ..........
Conversion—Line ..............................
Conversion—Transformer .................
Cushion of Credit ..............................
Customers’ Deposits—Forfeited ........
D
Damaged or Destroyed Construction
Work in Progress ............................
Damages—Liquidated .......................
Debt—Prepayment of ........................
Debt Securities—Investments in .......
Deferred Compensation .....................
Demand Meters—Retrofitting ...........
Determination of Availability of
Service ...........................................
Disallowances of Plant Costs ............
Disconnect Switch—Pole Top ...........
Discounts Allowed by Power Cooperative to Distribution Cooperative
Owning Transmission Lines ...........
Distribution Cooperative/Power Supply Cooperative Borrowing ............
E
Early Retirement Plan .....................
Economic Development Loan and
Grant Program ...............................
Employee Benefits ............................
611
501
608
140
138
112
601
624
616
127
129
623
501
504
505
502
602
401
404
114
127
126
116
102
123
633
301
114
115
625
629
604
122
113
133
105
617
616
631.
626
601
Number
Equity Securities—Investments in ...
F
Fees—Statewide ................................
Financial Forecast ............................
Financial Statements—Consolidated
Financing—Supplemental .................
First Clearing and Grading of Land
and Rights of Way ..........................
Forfeited Customer Deposits ............
Forfeited Membership Fees ...............
G
Gain or Loss on Sale of Office Building ..................................................
General Plant ....................................
Generation and Transmission (G&T)
Capital Credits ...............................
Global Positioning Systems ..............
I
Impairment of Long-Lived Assets .....
In-substance Defeasance ...................
Insurance—Employee
Retirement
and Group .......................................
Insurance—Premium on Life of a
Borrower Employee ........................
Insurance—Split Dollar ....................
Integrity Fund ..................................
Investments in Debt and Equity Securities ...........................................
J
Joint Use ...........................................
L
Land—First Clearing and Grading ....
Leases ...............................................
Legal Expenses ..................................
Life Insurance Premiums on Life of a
Borrower Employee ........................
Life Insurance—Split Dollar .............
Line Conversion ................................
Line Relocations ...............................
Liquidated Damages .........................
Load Control Equipment ...................
Long-Lived Assets-Impairment .........
M
Maintenance and Operations .............
Mapping Costs ...................................
Margins—Operating
and
Nonoperating ...........................................
Material—Salvage and Obsolete .......
Materials and Supplies—Refund for
Overpayments ................................
Member Relation Costs .....................
Membership Fees—Forfeited .............
Meter
Reading
Systems—RadioBased ..............................................
Meter Reading Systems—Turtles ......
Meter Sockets and Meters ................
Minimum—Maximum Voltmeters .....
Mobile Substations ...........................
N
Neutral—Replacement of ..................
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629
615
610
404
201
110
301
506
129
132
504
139
137
622
603
605
630
621
629
109
110
403
402
605
630
102
135
115
118
137
609
613
503
130
117
614
506
140
138
120
121
107
103
Rural Utilities Service, USDA
§ 1767.41
Subject Matter Index—Continued
Subject Matter Index—Continued
Number
Number
Nonoperating Margins ......................
Nonrefundable Payments for Construction ........................................
O
Obsolete Material ..............................
Operating and Nonoperating Margins
Operations Costs ...............................
P
Patronage Capital Assignments ........
Patronage Capital Furnished by
Other Cooperative Service Organizations ............................................
Patronage Capital from G&T Cooperatives .......................................
Patronage Capital Retirements ........
Payments for Construction—Nonrefundable ......................................
Pension Costs ....................................
Phase-in Plans ..................................
Plant Abandonments .........................
Plant Acquisition Adjustments ........
Plant Costs—Disallowances ..............
Plant—General ..................................
Pole Reinforcers—Steel ....................
Pole Top Disconnect Switch .............
Pollution Control Bonds ...................
Postemployment Benefits .................
Postretirement Benefits ...................
Power Cost Study ..............................
Power Supply/Distribution Cooperative Borrowing ...............................
Prepayment of Debt ..........................
Property—Sale of ..............................
Purchase Rebates ..............................
R
Radio-Based Automatic Meter Reading Systems ....................................
Rate Discount Allowed by Power Cooperative to a Distribution Cooperative Owning Transmission Lines ..
Rebates—Purchase ............................
Refunds for Overpayments for Materials and Supplies ...........................
Reimbursement for Line Relocations
Relocations of Lines .........................
Replacement of a Neutral .................
Retirement Units ..............................
Retirements—Patronage Capital ......
Retrofitting Demand Meters .............
Rights of Way—First Clearing and
Grading ..........................................
Rural Economic Development Loan
and Grant Program ........................
S
Sacrificial Anodes and the Replacement of a Neutral ...........................
Sale of an Office Building .................
Sale of Property ................................
Salvage and Obsolete Material .........
Satellite Television Services ............
503
116
130
503
609
501
505
504
502
116
606
134
133
131
133
132
106
105
624
628
627
612
616
625
128
620
Securities—Investments in Debt and
Equity ............................................
Security Lights .................................
Self Billing ........................................
Software Costs ..................................
Special Early Retirement Plan .........
Special Equipment ............................
Special Power Cost Study .................
Split Dollar Life Insurance ...............
Statewide Fees ..................................
Steel Pole Reinforcers ......................
Storm Damage ..................................
Substation—Mobile ...........................
Supplemental Financing ...................
System Planning—Engineering Contracts .............................................
T
Temporary Facilities (Services) .......
Terminal Facilities ...........................
Theft Losses not Covered by Insurance ................................................
Training Costs, Attendance at Meetings, etc. .........................................
Transclosures ....................................
Transformer Conversions ..................
Turtles—Automatic Meter Reading
Systems ..........................................
U
Unproductive Time ...........................
V
Voltmeters—Minimum/Maximum .....
W
Work Order Procedures .....................
101
140
617
620
117
135
135
103
125
502
122
110
626
103
129
128
130
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113
104
618
608
124
123
138
607
121
101
Work Order Procedures
When a minor item of property is removed
from service and not replaced, a retirement
work order is not required except in the case
of a conductor. The cost of the minor item
shall remain in the appropriate plant account until the retirement unit, of which it
is a part, is retired. However, as conductor is
recorded in feet and is not part of any specific retirement unit, conductor shall be retired even though the amount taken down
and not replaced is less than a retirement
unit (two spans).
When minor items of plant are removed
and not replaced, material salvaged shall be
recorded on a material salvage ticket. Items
of material recorded on this ticket shall be
charged to the materials and supplies account and credited in the miscellaneous columns of the Materials Register to the Accumulated Provision for Depreciation. In this
example, it is assumed that the cost of removal is nil. If, however, costs are incurred
during the removal of minor items of plant,
these costs shall reduce the credit to the Accumulated Provision for Depreciation.
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
When a staking sheet supporting a single
work order reflects a combination of new
construction and replacements, or system
improvements, the predominant cost shall be
the governing factor in determining the
amount of cost RUS will finance. To illustrate, assume that a service is to be run to
a new home near the end of an existing line.
On inspection, the pole from which the service is to be run is found to be in very poor
physical condition and must be replaced. In
addition, a single span of wire and a service
are presently connected to this pole which
serve no purpose. The home originally served
has been demolished and the existing span,
pole, and service were retired. In other
words, what started out to be simply the installation of a new service now includes the
retirement of a span of wire, a pole, and a
service; the replacement of a pole; and the
running of a new service. Assuming the replacement of the pole is the costliest part of
this project, the construction and retirement
activity shall be classified as an ordinary replacement even though the work includes
new construction and retirements without
replacement.
102
Line Conversion
If it is necessary to move a conductor from
one location to another on a pole assembly
during the conversion of a line from one
phase to another phase, the cost of moving
the conductor is capitalizable as a system
improvement.
103
Sacrificial Anodes and the Replacement
of a Neutral
Many utilities conduct studies to determine whether sacrificial anodes are needed
to protect underground cable against corrosion. The following procedures shall be followed to account for sacrificial anodes and
the replacement of a neutral:
1. If the study results in the installation of
sacrificial anodes, the cost of the study shall
be capitalized to Account 367, Underground
Conductors and Devices. If the study does
not result in the installation of anodes, the
cost shall be charged to Account 594, Maintenance of Underground Lines.
2. Costs incurred in the first installation
are capitalizable even though anodes are
considered minor items of property. However, only the first costs of installation shall
be capitalized. All subsequent replacements
of anodes shall be expensed.
3. Sacrificial anodes do not constitute a
record unit; therefore, the cost of anodes
shall be added to the cost of the underground
cable unit.
4. Because a neutral is part of an underground cable record unit, and is not, in and
of itself, a record unit, the cost to replace a
corroded neutral shall be charged to Account
594, Maintenance of Underground Lines.
104
Terminal Facilities
Borrowers are sometimes required to construct terminal facilities in the transmission
line of another utility in order to receive
power from their power supplier. The document executed between the borrower and the
utility is normally referred to as a ‘‘License
Agreement’’. The license agreement may
stipulate that certain items of the terminal
facilities are to be transferred to, and become the property of, the other utility upon
completion of the construction. The accounting for this type of transaction shall be as
follows:
1. All construction costs incurred shall be
charged to a work order. Upon completion of
the construction and accumulation of all
costs, the cost of the facilities that become
the property of another utility shall be
transferred from construction work-inprogress to Account 303, Miscellaneous Intangible Plant. The cost of the plant for
which the borrower retains title shall be
charged to the appropriate plant accounts.
2. The cost of the facilities recorded in Account 303 shall be amortized to Account 405,
Amortization of Other Electric Plant, over
the contract term or the estimated useful
service life of the plant, whichever is shorter. If the related contract or contracts for
this power supply are terminated, the
unamortized balance shall be expensed, in
the current period, in Account 557.
105
Pole Top Disconnect Switch
The installation of pole top service disconnect switches, where title is retained by
the utility, shall be capitalized in Account
371, Installations on Customers’ Premises. If
a switch cabinet is purchased with a current
transformer included as an integral part of
the cabinet, the entire cost of the switch
shall be charged to Account 371. If the current transformer is installed outside of the
switch cabinet, the transformer, meter, and
meter base, together with the first installation costs, shall be capitalized, upon purchase, in Account 370, Meters.
Payments received from the customer toward construction costs shall be credited to
Account 371, Installations on Customers’
Premises. Such payments, together with any
amount not financed by RUS, shall be entered in column 9 of the RUS Form 219, Inventory of Work Orders. The associated
maintenance costs shall be charged to Account 587, Customer Installations Expenses,
or to Account 597, Maintenance of Meters, as
appropriate.
When pole top disconnect switches are installed and title is held by the customer, the
cost of the material shall be charged to Account 456, Other Electric Revenues and the
receipts from the sale of line material shall
be credited to Account 456. The portion of
the receipts for resale material as well as
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Rural Utilities Service, USDA
§ 1767.41
that for installation shall be credited to Account 415, Revenues from Merchandising,
Jobbing, and Contract Work. The cost of resale material sold and the cost of installation shall be charged to Account 416, Costs
and Expenses of Merchandising, Jobbing and
Contract Work.
Future maintenance costs incurred by the
cooperative that are not billed to the customer shall be charged to Account 587, Customer Installations Expenses.
106
Steel Pole Reinforcers
The cost associated with the purchase and
installation of steel pole reinforcers shall be
charged to Account 593, Maintenance of
Overhead Lines.
107
Mobile Substations
Mobile substations shall be accounted for
in a manner similar to that for a spare and
are, therefore, included as part of transmission or distribution station equipment,
depending upon the use of the mobile substation. The mobile substation, together
with the trailer on which it is permanently
mounted, shall be capitalized upon purchase.
A general purpose truck or tractor used to
relocate a mobile substation and trailer
shall be classified as transportation equipment.
The composite depreciation rate used for
transmission plant or distribution plant, as
appropriate, shall be applied to the mobile
substation.
108
Security Lights
Where a pole supports both a secondary
wire and a security light, the cost of the pole
shall be charged to Account 364, Poles, Towers, and Fixtures, even though the plant investment in security lights is recorded in Account 371, Installations on Customers’ Premises.
109
Joint Use
There are many cases in which an electric
utility and a communications utility enter
into an agreement that provides for joint use
of poles. Under the terms of these agreements, either utility may occupy the poles of
the other upon payment of a stipulated annual rental. If such joint occupancy necessitates the use of a higher than standard
pole, the new pole shall be provided at the
expense of the utility having the need for the
higher pole.
When an electric utility replaces, at its
own expense, a standard pole belonging to
the communications utility with a higher
pole, the cost of the higher pole, less net salvage (if any) of the pole replaced, shall be
charged to the account in which the pole
rental is included.
Contributions made to an electric utility
by a communications utility for the costs in-
curred in stubbing joint use electric poles
shall be credited to Account 593, Maintenance of Overhead Lines. The cost of pole
stubbing on electric plant distribution facilities shall be charged to Account 593.
An investment in outside plant that is held
in joint ownership shall be recorded in the
appropriate plant accounts at its cost to the
utility. For continuing property record purposes, jointly owned property units shall be
priced at their cost to the utility and shall
be appropriately segregated in the CPRs to
indicate joint ownership.
110
First Clearing and Grading of Land and
Rights of Way
Utility accounting practice requires the
costs associated with the first clearing and
grading of land and rights of way and any resulting damage thereto, to be included in the
accounts for structures and improvements or
equipment to which such costs relate. Since
the first clearing, as well as clearing which
is ‘‘directly occasioned by the building of a
structure,’’ is done, not for the purpose of enhancing the value of the land or the rights of
way, but for the purpose of constructing
plant, these costs are more directly related
to the construction of plant than to the purchase of land or rights of way. The accounts
shall be charged as follows:
1. For overhead transmission pole lines,
Account 356, Overhead Conductors and Devices;
2. For overhead distribution lines, Account
365, Overhead Conductors and Devices; and
3. For underground distribution lines, Account 366, Underground Conduit, for a conduit installation; or Account 367, Underground Conductors and Devices, for a direct
burial installation.
111
Engineering Contracts for System
Planning
Engineering costs for long-range system
plans shall be charged to Account 183, Preliminary Survey and Investigation Charges,
as incurred. The cost of engineering services
incurred in preparing a long-range system
plan represents a legitimate component of
the total cost of construction of all system
improvements detailed in the plan. The
amount of engineering costs to be associated
with any specific system improvement is the
annual costs incurred up to the time of the
allocation (not previously allocated), plus
that portion of the initial cost which relates
to the particular construction in question. If
any major system improvement included in
the engineering plan is not constructed, or if
the study is superseded by another complete
study, the cost of that portion of the original
study not resulting in construction shall be
charged to Account 182.2, Unrecovered Plant
and Regulatory Study Costs, if the costs are
to be recovered through future rates. Costs
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
recorded in Account 182.2 shall be amortized
to Account 407, Amortization of Property
Losses, Unrecovered Plant and Regulatory
Study Costs, as the costs are recovered
through the rates. Any costs included in Account 182.2 that are disallowed for rate-making purposes shall be charged to Account
426.5, Other Deductions.
The allocation of engineering services to
the various construction projects requires
the exercise of judgment. In some cases, system improvements are continuous over a period of months or years, thus permitting the
engineering cost to be spread monthly as
overhead in relation to the direct costs incurred in construction. (If a substantial
amount of retirement work is performed in
connection with system improvements, a
proportionate share of the engineering cost
shall be allocated on the basis of direct retirement labor.) If the system improvements
detailed in the plan are not performed in a
continuous manner, the engineering cost
shall be allocated on the basis of the estimated costs of the various larger system improvement projects which result from the
long-range plan.
If construction is performed by contract,
the engineering cost applicable thereto shall
be transferred from Account 183 to Account
107, Construction Work-in-Progress—Electric, and thereby spread to the appropriate
plant accounts on the basis of contract costs.
In the case of system improvement construction performed on the basis of work orders, engineering costs shall be transferred
to Account 107, Construction Work-inProgress—Electric, and included in total
work order costs as either overhead or special services. If engineering services are not
readily identifiable with individual work orders, they shall be capitalized as overhead. If
engineering costs for each work order are
readily separable from the engineering costs
for all other work orders, they shall be capitalized as special services.
In summarizing system improvement work
orders on the RUS Form 219, Inventory of
Work Orders, the amount of engineering
costs previously approved for advance on the
long range plan, if any, shall be deducted to
determine the balance of loan funds subject
to advance by RUS.
112
Determination of Availability of
Service
Costs relating to the determination of
availability of service, rates, and similar
items for individual applicants shall be
charged to Account 912, Demonstrating and
Selling Expenses. If it is expected that construction will result, the costs incurred to
provide service, including staking, shall be
charged to Account 107, Construction Workin-Progress—Electric. If construction does
not result, Account 107 shall be credited and
Account 426.5, Other Deductions, shall be
charged.
113
Temporary Facilities (Services)
Plant installed for temporary use, a period
of less than 1.ar, shall be recorded in Account 185, Temporary Facilities, net of any
payments received from customers. Upon retirement, this net cost plus cost of removal,
less any salvage value, shall be cleared to
Account 451, Miscellaneous Service Revenues.
When a temporary service is installed at
the site of a building under construction, the
location of the permanent service entrance
and the load and its characteristics are usually known. The temporary service is of the
proper capacity and is so located or has sufficient slack, that it can be relocated to serve
the new building as a permanent service.
Under these conditions, the service shall be
charged to Account 369, Services, when first
installed. The cost of moving and attaching
the service to the permanent service entrance shall be charged to Account 593,
Maintenance of Overhead Lines or Account
594, Maintenance of Underground Lines, as
appropriate.
114 Construction Work-in-Progress
Damaged or Destroyed by Storm
When installed plant, not yet completed or
completed but not yet placed in service, has
been damaged or destroyed by storm, the
cost of the repair and restoration shall be
added to the cost of construction and capitalized if the plant was constructed under
force account or work order construction,
and the utility paid for the cost of the repairs. If the plant was constructed under
contract, the contractor is required to deliver the plant in new condition. Therefore,
any repairs required prior to the completion
of construction and acceptance by the utility, are ordinarily borne by the contractor.
115
Liquidated Damages
Liquidated damages are amounts paid by
or assessed against contractors for the completion of construction after an agreed upon
date. Liquidated damages shall be credited
to Account 107, Construction Work-inProgress—Electric. Since these damages accrue during the construction period, they become one of the components of construction
cost. Even though a portion of these damages may compensate the utility for costs
which are not ‘‘identifiable,’’ no portion of
the damages shall be credited to revenue or
expense.
When a contractor has been paid in full
from loan funds or from funds to be reimbursed by loan funds without a deduction for
liquidated damages, the amount of liquidated damages received shall be deposited
in the Construction Fund. This amount shall
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§ 1767.41
be reflected by a decrease in column 5,
‘‘Total Expenditures to Date,’’ of the RUS
Form 595, Financial Requirement and Expenditure Statement, and as an increase in
column 6, ‘‘Cash Balance.’’ If liquidated damages are obtained by withholding an equivalent amount from the contractor’s payment,
the net result will be the same.
116
Nonrefundable Payments for
Construction
Nonrefundable payments (contributions)
from customers and developers for underground construction shall first be credited to
Account
107.2,
Construction
Work-inProgress—Force Account. When the constructed plant is unitized and distributed to
the individual plant accounts, the contributions shall be credited to those plant accounts which gave rise to the contribution.
When a customer or developer furnishes a
trench or other service in connection with
buried plant, the cooperative shall debit Account 107.2 with the actual or estimated cost
of the service performed, and account for the
credit as set forth above.
117
Refunds of Overpayments for Materials
and Equipment
Refunds of overpayments for materials and
equipment previously purchased are occasionally received as the result of legal action
brought against electrical suppliers for price
fixing in violation of antitrust laws. Such refunds shall be accounted for as follows:
1. The refund shall first be applied to any
litigation costs that were incurred.
2. Refunds for special equipment items
shall be accounted for, in detail, on the Summary of Special Equipment Costs and credited against the appropriate plant accounts.
3. Other material or equipment items that
were installed through work orders or a materials furnished contract shall be adjusted
on an amended work order. The amended
work order shall include full details of the
refund.
4. Continuing property records shall be adjusted to reflect the above transactions.
5. Amounts approved for advance on the
RUS Form 595, Financial Requirement and
Expenditure Statement, and on the loan
budget records, shall be adjusted. For special
equipment items, the adjustment shall be requested in a letter to RUS. For materials installed by work order or contract, the adjustments shall be made through credits
shown on the RUS Form 219, Inventory of
Work Orders.
6. Refunds for material currently in stock
shall be credited to Account 154, Plant Materials and Operating Supplies.
7. If the material was used in maintenance
activities or operations, the refund shall be
credited to the appropriate maintenance or
operations expense account.
8. Refunds for materials or equipment financed from loan funds shall be deposited in
the Construction Fund—Trustee Account or
remitted to RUS as a special payment on a
note. Other refunds shall be deposited in the
general funds.
118
Load Control Equipment
The primary purpose of a Load Management System is to optimize load dispatch
and to reduce or minimize system peaks in
order to reduce purchases of power or to
delay or eliminate the need for construction
of new plant. A Load Management System
may be used on integrated systems, or on
generation, transmission, or distribution
systems separately. The telemetry equipment used for data acquisition and interpretation may be included at various points on
a system, such as generation, transmission,
or distribution substation, switchyards or on
consumers’ premises.
An effective load control program should
be coordinated with the G&T and requires
full participation of all member distribution
systems. The G&T monitors the power load
of the total member distribution system to
predict the time of the system’s peak load.
An optimal load control strategy is developed by the G&T and is passed on from the
G&T computer system to the load control
computer systems of the member distribution cooperatives.
The equipment at the member distribution
system level is the type actually being used
by an integrated power system to operate a
load control program. The equipment used
may vary from one integrated power system
to another. The selection of equipment used
is determined by the information needs of
the integrated power system, and the method selected to operate the load control system.
Some equipment performs only SCADAtype functions. This equipment is included
with the equipment that performs only load
control functions because SCADA-type
equipment is an integral part of a load control program. An effective load control strategy requires current information on loads so
that member distribution systems can determine the actual loads to be shed and the duration of the load control.
The function and location of the load control equipment are the primary factors in determining the account in which the equipment shall be recorded. The following example depicts a common load control system
and the associated accounting. Equipment
type may vary, thereby necessitating the use
of accounts not prescribed below. In all instances, however, the function and location
of the equipment shall dictate the appropriate account classification.
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
G&T Borrower
1. Coordinating System Equipment
Coordinating System Equipment is the
data acquisition, processing and control
hardware and software used to coordinate
the load control efforts of the member distribution system. Generally, this equipment
is dedicated to load control use and is not
shared with other electric utility activities.
The purpose of the G&T load control computer system is to reduce or minimize the
peak power requirements of the entire member distribution system. This involves load
dispatching to control transmission circuits
and breakers. The computer system for load
control shall, therefore, be recorded in Account 353, Station Equipment, with the associated operating expenses recorded in Account 561, Load Dispatching, and maintenance expenses recorded in Account 570,
Maintenance of Station Equipment.
2. Coordinating System Communications Link
The G&T load control computer system is
usually linked to the load control computer
system for each member distribution system
by a radio or telephone link that is dedicated
to that purpose and is not shared with other
communication activities. Under such circumstances,
communications
equipment
shall be classified in Account 353, Station
Equipment. If the communications equipment is shared with general use or voice
communications equipment, however, the
equipment shall be classified in Account 397,
Communication Equipment.
3. Depreciation
Load control equipment shall be recorded
in separate subaccounts of the primary plant
accounts detailed above and shall be depreciated based upon the owner’s estimate of
the equipment’s useful service life.
Distribution Borrower
1. Member System Equipment
Member system equipment is the data acquisition, processing and control hardware
and software used as a subset to the overall
load control efforts by the integrated power
system.
The member system computer for each distribution member system accepts the control
strategy from the G&T coordinating system
and develops the tables that determine the
control loads that are to be shed and the duration of the load control. The member system computer for each distribution system
monitors the usage at each of its delivery
points. This usage data is then transmitted
to the G&T coordinating system for use in
developing load projects and evaluating control strategies for the integrated power system. The member system computer is generally dedicated to load control use and is
not shared with other electric utility operations.
The member computer system shall be recorded in Account 362, Station Equipment.
The associated operating expenses shall be
recorded in Account 581, Load Dispatching,
and maintenance expenses shall be recorded
in Account 592, Maintenance of Station
Equipment.
2. Substation Remote Controllers
Substation Remote Controllers are located
at the distribution substation. They accept
control signals from the member system
computer and couple the signal to the portion of the distribution system to which it is
connected. Substation Remote Controllers
also serve as a receiver of inbound signals
from transponders located in the distribution system. They also send data back to the
member system computer.
Substation Remote Controllers shall be recorded in Account 362, Station Equipment.
The associated operating expenses shall be
recorded in Account 582, Station Expenses,
and maintenance expenses shall be recorded
in Account 592, Maintenance of Station
Equipment.
3. Substation Injection Units
Substation Injection Units are used only in
power line based systems and are located in
distribution substations. A major function of
the Substation Injection Unit is to receive
load control signals from the member system computer and inject them into the
power line based system to be transmitted to
the Load Control Receivers. Substation Injection Units can also perform control and
SCADA functions similar to those performed
by Substation Remote Controllers.
Substation Injection Units shall be recorded in Account 362, Station Equipment.
The associated operating expenses shall be
recorded in Account 582, Station Expenses,
and maintenance expenses shall be recorded
in Account 592, Maintenance of Station
Equipment.
4. Remote Terminal Units
Remote Terminal Units perform electric
utility SCADA functions in a distribution
substation or delivery point. These functions
include monitoring equipment for abnormal
operating conditions, monitoring analog
quantities such as conductor voltage or substation load, and controlling of certain
equipment within the substation.
Remote Terminal Units shall be recorded
in Account 362, Station Equipment. The associated operating expenses shall be recorded
in Account 582, Station Expenses, and maintenance expenses shall be recorded in Account 592, Maintenance of Station Equipment.
5. Line Device Transponder
A Line Device Transponder directly controls a piece of distribution apparatus, such
as a voltage regulator or a power factor correction capacitor, located on a distribution
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§ 1767.41
feeder and not accessible to a Remote Terminal Unit. The Line Device Transponder actuates the control functions and reports
back to the member system computer upon
completion of the requested action. This
transponder is located at the site of the distribution apparatus being controlled.
Line Device Transponders shall be recorded
in Account 368, Line Transformers. The associated operating expense shall be recorded in
Account 583, Overhead Line Expenses, or Account 584, Underground Line Expenses, as appropriate, and maintenance expenses shall be
recorded in Account 595, Maintenance of
Line Transformers.
6. Communications Verification Transponders
Communication Verification Transponders
are used to respond to inquiries from Substation Remote Controllers. In power line
based systems, these transponders are used
to verify the performance of the communications system. They are also used during adverse system operations to isolate sections
of the distribution system that are experiencing an outage.
Communication Verification Transponders
shall be recorded in Account 362, Station
Equipment. The associated operating expenses shall be recorded in Account 582, Station Expenses, and maintenance expenses
shall be recorded in Account 592, Maintenance of Station Equipment.
7. Load Control Receivers
The Load Control Receiver, also known as
a load control switch, is located at the site
of the consumer’s load. These receivers directly control the electric supply to an enduse appliance, such as an electric water heater, central air conditioning compressor, or
irrigation pump. The amount of time that an
appliance will be turned off by the load control receiver is preset. When the member system computer determines that load shedding
is necessary, it sends a signal to the communication link which then sends signals directly to the Load Control Receivers. In a
power line based system, the signal from the
communications link is sent by radio or telephone line to the Substation Injection Units,
which then signals the Load Control Receivers to shut down the appliances for the
present time. In nonpower line based systems, the signal from the communications
link is sent by radio directly to the Load
Control Receivers.
Load Control Receivers are located on the
consumer’s side of the meter. When the
member distribution system retains title to
the Load Control Receivers and assumes full
responsibility for maintenance and replacement of the equipment, it shall be classified
in Account 371, Installations on Customer’s
Premises. Load Control Receivers that are
donated or given to consumers shall be
charged to Account 908, Customer Assistance
Expenses.
Operating and maintenance expenses applicable to Load Control Receivers recorded in
Account 371 shall be charged to Account 587,
Customer Installations Expenses, and Account 598, Maintenance of Miscellaneous Distribution Plant, respectively. Expenses applicable to Load Control Receivers donated
or given to consumers shall be recorded in
Account 908, Customer Assistance Expenses.
Load Control Receivers may be moved on a
continual basis from one customer location
to another and are, therefore, considered to
be special equipment items. When ownership
is maintained by the member distribution
cooperative, Load Control Receivers shall be
accounted for in accordance with the special
equipment procedures outlined in Accounting Interpretation No. 119 of this section.
8. Communication Links
The communication link in the member
distribution systems between the Member
System Computer, the Substation Remote
Controllers or Substation Injection Units,
Remote Terminal Units, Line Device Transponders, Communication Verification Transponders, and Load Control Receivers is usually accomplished by radio, telephone line,
or power line based system. The communication links are normally dedicated to the
SCADA and load control functions being
served. Under such circumstances, communications equipment shall be recorded in Account 362, Station Equipment. If, however,
the communication equipment used is shared
with general use or voice communications
equipment, the equipment shall be charged
to Account 397, Communication Equipment.
9. Depreciation
Load control equipment shall be recorded
in separate subaccounts of the primary plant
accounts detailed above and shall be depreciated based upon the manufacturer’s estimate of the equipment’s useful service life.
119
SPECIAL EQUIPMENT
Special Equipment items are classified as
such because they are continually being
moved from one location to another due to
load changes and maintenance practices. The
USoA provides accounting that differs from
that used for other types of materials. The
cost, new, of special equipment items shall
be capitalized at the time of purchase; it
shall not be charged to Account 154 as is the
case with other materials. The first installation cost, as well as all incidental costs necessary to prepare the equipment for use,
shall be capitalized with the material upon
purchase. All subsequent costs of removing,
resetting, changing, renewing oil, and repairing constitute operations and maintenance
expenses. The capitalized cost of special
equipment items, including the first installation, shall be removed from the electric
plant accounts only when the items are
abandoned or retired from the system.
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Meters, line-type transformers, oil circuit
reclosers, sectionalizers, current and potential transformers, meter sockets, and other
metering equipment listed in Account 370,
Meters, as well as pole-type and underground
voltage regulators in Account 368, Line
Transformers, are considered to be special
equipment items. Similarly, load control receivers (load control switches) recorded in
Account 371, Installations on Customers’
Premises, are considered to be items of special equipment. (See Interpretation No. 118.)
Transformers, voltage regulators, metering
equipment, and current and potential transformers for substations are not.
Special equipment items which are classified as nonusable shall be segregated in the
warehouse and retired from service. The
Summary of Special Equipment Costs shall
be retitled Summary of Special Equipment
Costs Retired and used for this purpose. A
journal entry reflecting this information
shall be prepared and posted to the books.
Since loan funds for special equipment, including first installation costs, are approved
for advance by the Rural Development upon
receipt of the borrower’s written estimate of
funds required, and not on the basis of an Inventory of Work Orders, it is improper to
take a credit for any salvage involved in the
retirement of special equipment on the Inventory of Work Orders.
Electric borrowers that wish to receive a
waiver from the special equipment accounting requirements should submit a letter request to Rural Development. In order to expedite these requests the letter to Rural Development should state that the borrower
will adhere to the following requirements to
account for special equipment using the
work order procedure rather than the special
equipment accounting procedures prescribed
by Rural Development:
1. New purchases of special equipment
items are to be charged to Account 154, Materials and Supplies, upon purchase.
2. Labor, material and overhead costs associated with the initial installation and all
subsequent installations of special equipment are recorded on construction work orders and charged to the appropriate plant accounts upon closeout of the construction
work order.
3. Labor and overhead costs associated
with the removal of special equipment items,
whether the items removed are placed in inventory or permanently retired and disposed
of, are recorded on retirement work orders
and charged or credited to the depreciation
reserve account upon closeout of the retirement work order.
4. The special equipment items retired and
salvaged for reuse are returned to the materials and supplies account at the average material cost in the materials and supplies account and credited to the depreciation re-
serve upon closeout of the retirement work
order.
In addition to recognition of the requirements noted above, the borrower should indicate how it plans to account for the items of
special equipment that have been charged to
the plant accounts but not installed (in inventory). Two acceptable methods to account for this equipment are: (1) Leave the
equipment in the plant accounts until the inventory is depleted and charge only new purchases to materials and supplies, or (2) credit
the plant accounts for the installed cost of
the equipment in inventory, charge the
equipment cost to materials and supplies,
and charge the installation cost to the appropriate operations expense account. Also,
under the second method, the borrower must
submit a ‘‘negative’’ special equipment summary to Rural Development to return to the
balance in reserve for the current loan the
installed cost of special equipment in inventory on the date of transition.
120
Meter Sockets and Meters
When a utility furnishes meter sockets,
ownership by the utility of the meter socket
or base, as well as the meter itself, is established by virtue of them being furnished
without cost to the consumer by the cooperative. While no agreement as to ownership
between the cooperative and the property
owner exists, cooperative ownership is implied by long standing practice and tradition
in the electric utility industry.
121
Minimum—Maximum Voltmeters
A minimum—maximum voltmeter is used
to record the minimum and maximum
voltages at a specific line location over a period of time. It is normally installed on a
pole in connection with a 11⁄2 kVA transformer, a meter base and connecting wires,
and other small items of materials. Meter
bases are ordinarily set for these voltmeters
throughout the system, and a lesser number
of voltmeters are rotated among them periodically to obtain voltage readings. An average system may have one voltmeter to two
installations, with a maximum of 20 or 25
voltmeters for the whole system.
Minimum—maximum voltmeters shall be
recorded, through work orders, in Account
370, Meters, when installed. The cost of the
transformers shall remain in Account 368,
Line Transformers, with the cost of the
meter bases remaining in Account 370, Meters. The miscellaneous material used in installing the transformer and the meter base
shall be charged to Account 370, Meters.
Maintenance expense shall be charged to
either Account 595, Maintenance of Line
Transformers, or Account 597, Maintenance
of Meters, as appropriate. Costs associated
with reading the voltmeters shall be charged
to Account 583, Overhead Line Expenses, and
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§ 1767.41
the cost of relocating or changing the complete installation or any part thereof, other
than retirement of the meter base, shall be
charged to Account 583, Overhead Line Expenses, or Account 586, Meter Expenses.
122
Retrofitting Demand Meters
A demand meter measures the amount of
electricity used over a period of time in kilowatt-hours (kWh) and indicates the maximum kilowatts (kW) required at any one
time by means of a pointer.
Electronic or solid state demand meters
have a direct readout which reads kilowatt
demand to two decimal places. The use of a
direct readout demand meter may result in
increased revenues as pointer readings tend
to register lower than actual usages.
The process of retrofitting a demand meter
replaces the pointer with a direct readout.
The cost of such a replacement is usually expensed as a minor item of property; however,
since the use of a direct readout results in a
substantial betterment, the excess cost of
the replacement over the estimated cost, at
current prices, of replacing the pointer without the betterment is capitalized.
123
work orders, and by unitizing all costs of
completed construction for a month, these
minor items shall be spread to the retirement units of which they normally form a
part. For example, to convert a two-phase
line to a three-phase line requires the addition of a conductor, an insulator and a poletop pin. A pole-top pin is typically capitalized as a component of the cost of the pole to
which it is attached. Assuming this is the
only work order for the month, the cost of
this pin shall be charged to the conductor, so
that its cost is included in the total cost of
the project. In actual practice, however, this
does not happen as it is normal to have a
number of work orders for a given month,
which include the setting of poles. In allocating the cost of all construction projects
for the month, part of the cost of pole-top
pins shall be allocated to poles even though
the work orders on which they were capitalized did not include poles.
The retirement and replacement of isolated single retirement units cannot be
charged to maintenance; a retirement and
construction work order shall be used.
126
Transformer Conversions
The conversion of an overhead transformer
to an underground transformer constitutes a
betterment and shall, therefore, be capitalized.
124
Transclosures
Transclosures are enclosures or cabinets in
which line transformers are mounted. The
cost of transclosures that are purchased separately from the transformer shall be
charged to Account 154, Plant Materials and
Operating Supplies, when received, and capitalized, upon installation, to Account 368,
Line Transformers, as a separate unit of
property. If the case and the transformer are
inseparable, the unit is considered a transformer and shall be capitalized upon purchase.
125
Retirement Units
Services
A retirement unit shall consist of a complete service rather than the individual wires
comprising that service. If each separate
wire of a service were treated as a retirement unit, the retirement unit would represent a comparatively small cost. Such a
small unit of property would substantially
increase the number of retirement work orders. The complete service shall, therefore,
be considered a retirement unit.
Minor Items
When minor items of property are added
separately from complete retirement units,
the costs of these items shall be included in
Establishment of Continuing Property
Records
The costs of installing a system of continuing property records shall be charged to
Account 930.2, Miscellaneous General Expenses, and may include:
1. Labor and expenses incurred in developing an inventory of property;
2. Labor and material costs incurred in
connection with developing pole records including map preparation and pole cards; and
3. Labor and material costs (ledger sheets,
etc.) incurred in connection with the installation of the record system.
127
Continuing Property Records for
Buildings
When establishing continuing property
records for a building where there is no detailed breakdown of contract costs, it is necessary to estimate the cost of the each component part. It should be noted that the establishment of continuing property records
is not required for buildings; however, if
CPRs are not maintained, all repairs including the replacement of major component
parts shall be expensed in the period incurred.
128
Sale of Property
All proceeds deposited in the Construction
Fund account from the sale of property, regardless of materiality, shall be reflected on
the RUS Form 595, Financial Requirement
and Expenditure Statement. Proceeds from
the sale of property shall be reported on the
Form 595, by budget purpose, as a reduction
in total expenditures to date, column 5; and
an increase in the cash balance, column 6.
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Proceeds from the sale of property shall
not be used to maintain an ‘‘Employee
Fund.’’ A utility may, pursuant to board policy, use general funds for employee welfare
equivalent in amount to proceeds received
from the sale of scrap property. If general
funds, in an amount equivalent to proceeds
received from the sale of scrap property, are
used for employee welfare, Account 926, Employee Pensions and Benefits, shall be
charged.
129
Gain or Loss on the Sale of an Office
Building
A gain on the sale of an office building
shall be recorded in Account 421.1, Gain on
the Disposition of Property, with a loss recorded in Account 421.2, Loss on the Disposition of Property. If the gain or loss will materially distort current year’s net margins,
such gain or loss is reportable as an extraordinary item in Account 434, Extraordinary
Income, or Account 435, Extraordinary Deductions.
130
Salvage and Obsolete Material
The value of material salvaged from the
retirement of units of property reduces the
loss on the retirement and shall be so applied. The value assigned to salvage shall be
credited to Account 108.8, Retirement Workin-Progress, which results in reducing net
charges to the provision for depreciation
when the work order is completed and
cleared.
If salvage is sold, any difference between
the realized value and the estimated value of
the salvaged material shall be charged or
credited to the appropriate provision for depreciation.
Salvage resulting from maintenance where
no retirement units are involved shall be
debited to the materials and supplies account, and credited to the appropriate maintenance account.
Occasionally a utility will have a loss due
to obsolescence of materials on hand. If the
loss is due to obsolescence of new material,
the loss shall be charged to Account 426.5,
Other Deductions. If the loss is due to obsolescence of used material, the loss shall be
charged to the appropriate subaccount of Account 108, Accumulated Provision for Depreciation.
131
Plant Acquisition Adjustments
Plant acquisition adjustments shall be amortized to the operating expense accounts.
These adjustments are recorded in Account
114, Electric Plant Acquisition Adjustments,
and amortized to Account 406, Amortization
of Electric Plant Acquisition Adjustments,
or Account 425, Miscellaneous Amortization,
as required by the regulatory commission
having jurisdiction. Accounts 406 and 425
shall be closed to operating margins.
132
General Plant
When the unit method of depreciation is
used for general plant items, gains and losses
on sales, trades or disposals of equipment
shall be recorded as such. If the composite
method of depreciation is used, gains or
losses on the disposal of general plant items
shall be recorded in the appropriate depreciation reserve account.
A truck which is used only for transporting
power operated equipment mounted thereon
shall be charged, together with the installed
equipment, to Account 396, Power Operated
Equipment. If the same type of truck is used
for transporting materials and supplies,
tools and work equipment, personnel, or
other items, the cost of the truck shall be
charged to Account 392, Transportation
Equipment.
Depreciation and other expenses relating
to power operated equipment shall be accumulated in a subaccount of Account 184,
Clearing Accounts, and distributed monthly
on an equitable basis to the accounts properly chargeable.
Depreciation expense on vehicles and other
work equipment, furniture and office equipment, and other such plant used in the construction of utility plant, is a proper component of construction cost. To avoid a duplicate advance of funds, however, the amount
of depreciation on such items that has previously been financed from loan funds shall
be deducted from Inventories of Work Orders
submitted to RUS. This amount shall be specifically identified, and shown either monthly or annually as a single item in column 9
on the RUS Form 219, Inventory of Work Orders.
133
Plant Abandonments and Disallowances
of Plant Costs
In December 1986, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 90, Regulated Enterprises—Accounting for Abandonments (Statement No. 90) and Disallowances
of Plant Costs. This section provides an overview of the requirements outlined in Statement No. 90 together with the specific accounts that shall be used to record a plant
abandonment or a disallowance of plant
costs.
Plant Abandonments
When an abandonment becomes probable,
the cost of the abandoned asset shall be removed from Construction Work-in-Progress
or Plant-in-Service, as applicable. Before
making this transfer, however, a determination must be made as to whether recovery of
the allowed cost is likely to be provided with
a full return on the investment during the
period from the time the abandonment becomes probable, to the time when recovery is
completed, or with a partial or no return on
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Rural Utilities Service, USDA
§ 1767.41
the investment. This determination shall be
made based upon the facts and circumstances of the specific abandonment, and
past practices and current policies of regulatory jurisdiction.
If a full return on the investment is likely
to be provided, any disallowance of all or
part of the cost of abandoned plant that is
both probable and reasonably estimated
shall be recognized as a loss in the current
year with the carrying basis of the asset reduced by an equal amount. The remaining
cost of abandoned plant shall be recorded as
a separate new asset.
If partial or no return on the investment is
likely to be provided, any disallowance of
abandoned plant costs that is both probable
and reasonably estimated shall be recognized
as a loss. The present value of the future revenues expected to be provided to recover the
allowable cost of the abandoned plant and return on the investment, if any, shall be reported as a separate new asset. The discount
rate used to compute the present value shall
be the borrower’s incremental borrowing
rate, which is the rate that the borrower
would have to pay to borrow an equivalent
amount for a period equal to the expected recovery period. In determining the value of
expected future revenues, the borrower shall
consider the probable time period before the
recovery is expected to begin and the probable time period over which recovery is expected to be provided.
The amount of the new asset shall be adjusted from time to time, as necessary, if
new information indicates that the estimates used to record the new asset have
changed. The carrying value of the new
asset, however, shall not be adjusted for
changes in the incremental borrowing rate.
The amount of any adjustments shall be recorded as a gain or loss.
During the period between the date on
which a new asset is recognized and the date
on which recovery begins, the carrying
amount shall be increased by accruing a carrying charge. The rate used to accrue the
carrying charge shall be:
1. If a full return on the investment is likely, a rate equal to the allowed overall cost of
capital in the jurisdiction in which recovery
is expected to be provided shall be used.
2. If partial or no return is likely, the asset
shall be amortized in a manner that will
produce
a
constant
return
on
the
unamortized investment in the new asset
equal to the rate at which the expected revenues were discounted.
Due to the nonprofit environment in which
electric cooperatives operate, full recovery
of interest expense on plant related longterm debt equates to full recovery of the rate
of return for an investor-owned utility.
Therefore, if a cooperative is permitted full
recovery of the interest expense incurred on
the long-term debt borrowed to finance construction of an abandoned plant, no discounting of the asset is required nor is accrual of the carrying charge permitted.
If, at the time the provisions of Statement
No. 90 are first applied, the borrower elects
to restate the financial statements, the financial statements for all periods presented
shall be restated and the financial statements shall disclose the nature of the restatement and its effect on margins before
extraordinary items, net margins, and patronage capital at the beginning of the earliest period presented. If the borrower elects
not to restate the financial statements, the
effect of applying Statement No. 90 shall be
reported as a change in accounting principle
and the financial statements shall disclose
the nature of the change and the effect of applying Statement No. 90 on margins before
extraordinary items and net margins.
The specific accounts that shall be used to
record transactions involving plant abandonments are as follows:
1. In the year of the abandonment, the unrecoverable portion of the cost of abandoned
plant included in construction work-inprogress shall be recognized as a loss by a
charge to Account 426.5, Other Deductions,
and a credit to Account 107, Construction
Work-in-Progress.
2. The balance of the cost remaining in the
construction work-in-progress account shall
be credited to Account 107 and charged to
Account 182.2, Unrecovered Plant and Regulatory Study Costs.
3. The difference between the charge to Account 182.2 and the present value of expected
future revenues for recovery of the new
asset, shall be recorded as a credit to Account 182.2 and a debit to Account 426.5. The
credit to Account 182.2 shall be segregated
from the amount charged to Account 182.2 by
the use of a separate subaccount. Statement
No. 90 does not require this segregation;
however, it is necessary under the USoA to
provide for the appropriate segregation of
operating and nonoperating income.
4. During the waiting period for recovery of
the new asset to begin, carrying charges
shall be accrued by a debit toAccount 182.2
with a concurrent credit to Account 421, Miscellaneous Nonoperating Income. Debits to
Account 182.2 shall be treated as reductions
to the credit subaccount of Account 182.2.
5. The borrower shall amortize the amount
debited to Account 182.2 by charges to operating income, consistent with the way the
amortized amounts are recovered through
rates. These charges to income shall be recorded in Account 407, Amortization of Property Losses, Unrecovered Plant and Regulatory Study Costs.
6. As the recoverable amount recorded in
Account 182.2 is recovered through rates, the
borrower shall accrue income by charges to
Account 182.2 and credits to Account 421,
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Miscellaneous Nonoperating Income. Accruals shall be computed by applying the same
rate used to derive the present value of the
asset established in Account 182.2, to the
unamortized balance in that account. Accrued amounts charged to Account 182.2
shall be treated as reductions to the credit
subaccount withinAccount 182.2.
Prior to implementing the accounting prescribed above, the borrower shall submit the
details of each plant abandonment to RUS
for approval.
Disallowances of Costs of Recently Completed
Plant
When it becomes probable that a portion of
the cost of recently completed plant will be
disallowed for rate making purposes and a
reasonable estimate of the amount of the
disallowance can be made, the estimated
amount of the probable disallowance shall be
deducted from the reported cost of the plant
and recognized as a loss. If a portion of the
costs is explicitly, but indirectly disallowed,
the equivalent amount of the cost shall be
deducted from the reported cost of the plant
and recognized as a loss. The specific accounts that shall be used to record transactions involving the disallowance of plant
costs are as follows:
1. Estimated disallowed plant costs which
the borrower records as a credit to Account
101, Electric Plant-in-Service, shall be
charged to Account 426.5, Other Deductions.
2. If the loss qualifies as an extraordinary
item under the criteria set forth in General
Instruction No. 7 of the USoA, the borrower
shall record the loss in Account 435, Extraordinary Deductions. To be considered extraordinary, an item shall be more than five percent of income computed before extraordinary items. If a borrower believes that a
loss of less than five percent should be treated as an extraordinary item; the borrower
shall, with commission approval, record the
loss in Account 435 and report the loss as an
extraordinary item. If the borrower is not
subject to state commission jurisdiction,
RUS approval is required.
134
Utility Plant Phase-in Plans
In August 1987, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 92, Regulated
Enterprises—Accounting for Phase-in Plans
(Statement No. 92). This section provides an
overview of the requirements outlined in
Statement No. 92.
The term phase-in plan is used to refer to
any method of recognition of allowable costs
in rates that meets all of the following criteria:
1. The method was adopted by the regulator in connection with a major, newly completed plant of the regulated enterprise or
one of its suppliers or a major plant scheduled for completion in the near future.
2. The method defers the rates intended to
recover allowable costs beyond the period in
which those allowable costs would be
charged to expense under generally accepted
accounting principles applicable to enterprises in general.
3. The method defers the rates intended to
recover allowable costs beyond the period in
which those rates would have been ordered
under the rate-making methods routinely
used prior to 1982 by that regulator for similar allowable costs of that regulated enterprise.
If a phase-in plan is ordered by a regulator
in connection with a plant on which no substantial physical construction had been performed before January 1, 1988, none of the allowable costs that are deferred for future recovery by the regulator under the plan for
rate-making purposes, shall be capitalized
for general-purpose financial reporting purposes (financial reporting).
If a phase-in plan is ordered by a regulator
in connection with a plant completed before
January 1, 1988, or a plant on which substantial physical construction had been performed before January 1, 1988, the criteria
specified below shall be applied to that plan.
If the phase-in plan meets all of those criteria, all allowable costs that are deferred
for future recovery by the regulator under
the plan shall be capitalized for financial reporting purposes as a separate asset (a deferred charge). If any one of those criteria is
not met, none of the allowable costs that are
deferred for future recovery by the regulator
under the plan shall be capitalized for financial reporting. The criteria for determining
whether capitalization is appropriate are:
1. The allowable costs in question are deferred pursuant to a formal plan that has
been agreed to by the regulator;
2. The plan specifies the timing of recovery
of all allowable costs that will be deferred
under the plan;
3. All allowable costs deferred under the
plan are scheduled for recovery within 10
years of the date when the deferral began;
and
4. The percentage increase in rates scheduled under the plan for each future year is no
greater than the percentage increase in rates
scheduled under the plan for each immediately preceding year. That is, the scheduled percentage increase in year two is no
greater than the percentage increase granted
in year one, the scheduled percentage increase in year three is no greater than the
percentage increase in year two, etc.
By definition, a phase-in plan approved
prior to 1982 that contains provisions contrary to those detailed above is not subject
to the provisions of Statement No. 92. This
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Rural Utilities Service, USDA
§ 1767.41
exemption, however, only relates to a specific utility and a specific regulator. For example, a utility cannot use a phase-in plan
approved by its regulator for a different utility as justification for its phase-in plan exceeding the 10-year limit imposed by Statement No. 92.
A phase-in plan is a method of rate making
intended to moderate a sudden increase in
rates while providing the regulated enterprise with recovery of its investment and a
return on that investment during the recovery period. A disallowance is a rate-making
action that prevents the regulated enterprise
from recovering either some amount of its
investment or some amount of return on its
investment. Statement No. 90 specifies the
accounting for disallowances of plant costs
(see item 133 of this regulation). If a method
of rate making that meets the criteria for a
phase-in plan includes an indirect disallowance of plant costs, that disallowance shall
be accounted for in accordance with Statement No. 90. Cumulative amounts capitalized
under phase-in plans shall be reported as a
separate asset in the balance sheet. The net
amount capitalized in each period or the net
amount of previously capitalized allowable
costs recovered during each period shall be
reported as a separate item of other income
or expense in the income statement. Allowable costs capitalized shall not be reported
as reductions of other expenses.
The terms of any phase-in plan in effect
during the year or ordered for future years
shall be disclosed in the financial statements. Statement No. 92 does not permit
capitalization for financial reporting of allowable costs deferred for future recovery by
the regulator pursuant to a phase-in plan
that does not meet the criteria or a phase-in
plan related to plant on which substantial
physical construction was not completed before January 1, 1988. Nevertheless, the financial statements shall include disclosures of
the net amount deferred at the balance sheet
date for rate-making purposes, and the net
change in deferrals for rate-making purposes
during the year for those plans.
If the provisions of Statement No. 92 are
applied retroactively, the financial statements of all periods presented shall be restated. In addition, the restated financial
statements shall, in the year that Statement
No. 92 is first applied, disclose the nature of
any restatement and its effect on margins
before extraordinary items, net margins, and
on patronage capital at the beginning of the
earliest period presented. If the financial
statements for prior years are not restated,
the effects of applying Statement No. 92 to
existing phase-in plans shall be reported as a
change in accounting principle and the financial statements shall disclose the effect
of adopting Statement No. 92 on margins before extraordinary items and net margins.
The application of Statement No. 92 to an
existing phase-in plan shall be delayed if
both of the following conditions are met:
1. The enterprise has filed a rate application to have the plan amended to meet the
criteria of Statement No. 92 or intends to do
so as soon as practicable; and
2. It is reasonably possible that the regulator will change the terms of the phase-in
plan so that it will meet the criteria of
Statement No. 92.
If the above conditions are met, the provisions of Statement No. 92 shall be applied to
the existing phase-in plan on the earlier of
the date when one of the conditions ceases to
be met or the date when the final rate order
is received, amending or refusing to amend
the phase-in plan. However, if the enterprise
delays filing its application for the amendment or the regulator does not process the
application in the normal period of time, the
application of Statement No. 92 shall not be
further delayed.
In applying the criteria of Statement No.
92 to a plan that was in existence prior to the
first fiscal year beginning after December 15,
1987, and that was revised to meet that criteria, the 10-year criterion and the requirement concerning the percentage increase
shall be measured from the date of the
amendment rather than from the date of the
first scheduled deferrals under the original
plan. All phase-in plans must receive RUS
approval prior to implementation.
135 Accounting for Removal or Relocation
of Electric Facilities Resulting from the
Action of Others
Under arrangements with another party, a
borrower agrees, or is obliged, to remove, relocate, rearrange, or otherwise make
changes in utility property, other than for
the purpose of rendering utility service to
the other party, for which the utility is reimbursed for all or a portion of the costs incurred.
Plant Accounting
The relocation of the line shall be accounted for as follows:
1. If all of the assemblies in the line are retired or completely removed and later reinstalled or if the line is constructed in a
new location before the old line is removed,
construction and retirement work orders
shall be prepared except for the costs relating to special equipment items (transformers, oil circuit reclosers, etc.) which
shall be charged to operations expense.
2. If a line is moved in its entirety to a new
location except for isolated retirement units
(such as at the end of the line) or poles not
suitable for resetting, the cost of moving the
portion of line that is moved intact shall be
charged to maintenance expense while the
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
cost related to the change in isolated retirement units or the replacement of poles not
suitable for resetting shall be accounted for
through use of construction and retirement
work orders.
3. If a line is moved intact without any
change in assemblies, the cost shall be
charged to maintenance expense.
Reimbursement
If the borrower receives reimbursement for
the costs related to the relocation of the
line, the reimbursement shall be accounted
for by crediting operation and maintenance
expenses to the extent of actual expenses occasioned by the plant changes and crediting
the remainder to the accumulated provision
for depreciation, unless contractual terms
definitely characterize residual or specific
amounts as applicable to the cost of replacement. In the latter event, appropriate credits
shall be entered in the plant accounts.
Reimbursement received from a telephone
company for adding a pole or replacing a
present pole with a taller pole under joint
use contracts falls within this latter category. In this instance, appropriate credits
are charged against the plant accounts.
Financing
The total reimbursement, less any portion
for operations and maintenance costs, shall
be entered in the ‘‘Contributions in Aid of
Construction’’ section at the bottom of the
Construction Work Order. When the Inventory of Work Orders (RUS Form 219) is prepared, enter only enough of the contribution
in column 9 to reduce to zero the amount in
column 10, ‘‘Loan Funds Subject to Advance
by RUS.’’ This entry is made although none
of the reimbursement received is recorded in
the accounting records as a contribution in
aid of construction.
136
Storm Damage
As a result of recent hurricane, flood, and
ice storm damage, the Rural Utilities Service (RUS) has received several inquiries concerning the proper accounting for storm
damage costs and the associated funds received from the Federal Emergency Management Administration (FEMA).
Storm damage costs should be accounted
for under the work order procedure. Units of
property destroyed or otherwise removed
from service must be reflected on retirement
work orders and units of property installed
must be shown on construction work orders.
To ensure that the accounting for construction and retirement costs is as accurate as
possible, an effort should be made to accurately accumulate material, labor, and overhead costs. Even when extreme care has been
exercised, however, it may still be necessary
to use estimates to develop the appropriate
cost figures.
When a storm occurs, a utility typically
incurs a large retirement loss, all or a part
of which should be charged to the accumulated provision for depreciation. Storm damage costs over and above construction and
retirement costs represent maintenance expense. Maintenance costs include the costs of
resagging lines, straightening poles, and replacing minor items of property. When extensive damage has occurred, the need to restore the property to an operating condition
without delay usually results in excessive
costs being incurred. Standard property unit
costs may be used as a guide in determining
the amount to be capitalized. It should be
noted, however, that when standard property
unit costs are used, all excess costs are
charged to maintenance expense.
Because of the storm’s destruction, property is retired prematurely and as a result,
extraordinary retirement losses occur. When
such extraordinary losses occur, they should
be recorded in the year in which the losses
are incurred. If the recording of such losses
will materially distort the income statement, such losses may be charged to Account
435, Extraordinary Deductions. These costs
may be deferred and amortized to future periods only if the provisions of Statement of
Financial Accounting Standards No. 71, Accounting for the Effects of Certain Types of
Regulation (Statement No. 71), are applied.
Under the provisions of Statement No. 71, a
utility may defer certain costs, provided
such costs are included in the utility’s rate
base and recovered through future rates. If
an RUS borrower elects to apply the provisions of Statement No. 71, RUS approval is
required. To obtain RUS approval, a borrower must submit:
a. A detailed description of the plan including the nature of the expense item, the
amount of the deferral, the specific time period for rate recovery, and justifying support
for the time period selected;
b. The accounting journal entries being
used by the cooperative to record the expense deferral and amortization of deferred
costs; and
c. A copy of the state Commission order
authorizing recovery of the deferred costs
through future rates, or in the absence of
commission jurisdiction, a resolution from
the cooperative’s board of directors authorizing such recovery.
To assist in the restoration of the damaged
facilities, the Federal government often provides assistance through Federal Emergency
Management Agency (FEMA).
Under current FEMA procedures, FEMA
provides funds for the restoration of facilities based upon the cost estimates submitted
by the entity requesting assistance. If the
FEMA grant is for less than 100 percent of
the cost estimates, and does not specify offset expenses, thereby providing the borrower
with the maximum opportunity to utilize
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Rural Utilities Service, USDA
§ 1767.41
Rural Development Utilities Program loan
funds to finance capitalizable costs. When
the funds are received, they should be accounted for by first applying the funds re-
ceived as a credit to maintenance expense
and administrative and general costs. Any
remaining funds should then be applied as a
credit to construction and retirement costs.
ACCOUNTING JOURNAL ENTRIES
Dr. 108.8X, Retirement Work in Progress—Storm Damage ..............
$1,015.17
Cr. 107.4, Construction Work in Progress—Storm Damage ........ ..................
$1,015.17
To transfer the removal costs recorded in Column 11 of Retirement Work Order #4401X to
Account 108.8X.
Dr. 107.4, Construction Work in Progress—Storm Damage ..............
$4,141.55
Cr. 108.8X, Retirement Work in Progress—Storm Damage ........ ..................
$4,141.55
To remove material salvaged in the llllllllll rebuild from Account 107.4. The
original entry debited Account 154, Plant Materials and Operating Supplies, and credited
Account 107.4. (See Column 12 of Retirement Work Order #4401X.)
Dr. 108.8X, Retirement Work in Progress—Storm Damage ..............
$312,230.41
Cr. 364, Poles Towers and Fixtures ............................................. ..................
$133,377.55
Cr. 365, Overhead Conductors and Devices ................................. ..................
59,683.08
Cr. 368, Lines Transformers ........................................................ ..................
19,704.60
Cr. 369, Services .......................................................................... ..................
97,651.23
Cr. 373, Street Lighting and Signal Systems .............................. ..................
1,813.95
To remove the original cost of property destroyed and retired from the classified plant accounts. This retirement is recorded, in detail, on Retirement Work Order #4401X. It is understood that this retirement covers all distribution property retired or destroyed in the
llllllllll area exclusive of substations and special equipment items (meters,
meter sockets, current and potential transformers, transformers, voltage regulators, oil
circuit reclosers (OCR), and sectionalizers).
Dr. 108.6, Accumulated Provision for Depreciation of Distribution
Plant .............................................................................................
$309,104.03
Cr. 108.8X, Retirement Work in Progress—Storm Damage ........ ..................
$309,104.03
To record the net loss due to the retirement of distribution lines in the llllllllll
area. (See Retirement Work Order #4401X.)
Dr. 364, Poles, Towers and Fixtures .................................................
$99,075.40
Dr. 365, Overhead Conductors and Devices .......................................
104,142.22
Dr. 368, Line Transformers ...............................................................
25,036.07
Dr. 369, Services ...............................................................................
28,865.08
Dr. 373, Street Lighting and Signal Systems ...................................
2,101.60
Cr. 107.4, Construction Work in Progress—Storm Damage ........ ..................
$259,220.37
To record, in the proper classified plant accounts, Construction Work Order #4401 covering
the llllllllll rebuild.
This entry includes:
Material Issued ..........................................................................
$150,336.49
Less: Materials Returned ...........................................................
15,631.39
Net Material Used ......................................................................
Labor and overhead estimated by using standard record unit
costs ........................................................................................
134,705.10
124,515.27
Total .......................................................................................
259,220.37
Dr. 108.8X, Retirement Work in Progress—Storm Damage ..............
2,384.00
Cr. 107.4, Construction Work in Progress—Storm Damage ........ ..................
$2,384.00
To transfer the removal costs associated with the retirement of old transmission lines
($1,966) and substations ($418) to Account 107.4. This cost is shown in Column 11 of Retirement Work Order #4400X).
Dr. 107.4, Construction Work in Progress—Storm Damage ..............
$1,939.74
Cr. 108.8X, Retirement Work in Progress—Storm Damage ........ ..................
$1,939.74
To remove material salvaged from transmission lines ($1,545.74) and substations ($394.00)
from Account 107.4. The original entry debited Account 154 and credited Account 107.4.
(See Column 12 of Retirement Work Order #4400X.)
Dr. 108.8X, Retirement Work in Progress—Storm Damage ..............
$162,172.06
Cr. 355, Poles and Fixtures ......................................................... ..................
$47,738.45
Cr. 356, Overhead Conductors & Devices ..................................... ..................
80,304.11
Cr. 362, Station Equipment ........................................................ ..................
34,129.50
To remove the original cost of transmission lines and substations destroyed and retired
from the classified plant accounts. (See Retirement Work Order #4400X.) (New substations
were built and separately accounted for on Work Order #4406.)
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
ACCOUNTING JOURNAL ENTRIES—Continued
Dr. 108.5, Accumulated Provision for Depreciation of Transmission
Plant .............................................................................................
$128,462.82
Dr. 108.6, Accumulated Provision for Depreciation of Distribution
Plant .............................................................................................
34,153.50
Cr. 108.8X, Retirement Work in Progress—Storm Damage ........ ..................
$162,616.32
To record the net loss due to the retirement of transmission lines ($128,462.82) and substations ($34,153.50). (See Retirement Work Order #4400X):
Substations
Transmission
plant
Original Cost ....................................................................................
Add: Cost of Removal .......................................................................
$34,129.50
418.00
$128,042.56
1,966.00
Less: Material Salvaged ...................................................................
34,547.50
394.00
130,008.56
1,545.74
Total .......................................................................................
34,153.50
128,462.82
Dr. 355, Poles and Fixtures ...............................................................
$161,784.05
Dr. 356, Overhead Conductors and Devices .......................................
124,704.77
Cr. 107.4, Construction Work in Progress—Storm Damage ........ ..................
$286,488.82
To record, in the proper classified plant accounts, the costs of a 69 kV transmission line
(llllllllll) as detailed in Work Order #4400. This work order includes construction costs as follows:
Material Used (Net) ..........................................................................
$171,665.62
Labor and overhead estimated by using standard record unit
costs ........................................................................................
114,823.20
Total .......................................................................................
286,488.82
Dr. 107.4, Construction Work in Progress—Storm Damage ..............
$329.40
Cr. 108.8X, Retirement Work in Progress—Storm Damage ........ ..................
$329.40
To correct the journal entry for cash received from the sale of scrapped meters and transformers. The original entry credited Account 107.4 at the time of receipt.
Transformers ..............................................................................
$318.00
Meters ........................................................................................
11.40
Net Materials Used .....................................................................
329.40
Dr. 108.8X, Retirement Work in Progress—Storm Damage .............. ..................
$137,671.22
Cr. 365, Overhead Conductors and Devices ................................. ..................
$4,557.00
Cr. 368, Line Transformers ......................................................... ..................
112,815.22
Cr. 370, Meters ............................................................................ ..................
20,299.00
To remove the cost of meters, transformers, and OCRs lost or destroyed from the primary
plant accounts. (See Retirement Work Order #4402X.)
737 Transformers ........................................................................
$112,815.22
31 OCRs .......................................................................................
4,557.00
1,532 Meters ................................................................................
20,299.00
Total .......................................................................................
137,671.22
Dr. 108.6, Accumulated Provision for Depreciation of Distribution
Plant .............................................................................................
$137,341.82
Cr. 108.8X, Retirement Work in Progress ................................... ..................
$137,341.82
To record the net loss due to the retirement of meters, transformers, and OCRs. (See Retirement Work Order #4402X.)
Original Cost ..............................................................................
$137,671.22
Salvaged Realized ......................................................................
329.40
Total .......................................................................................
137,341.82
Dr. 186, Miscellaneous Deferred Debits ............................................
$1,319.85
Cr. 107.4, Construction Work in Progress—Storm Damage ........ ..................
$1,319.85
To record the engineering costs associated with future construction work in the
llllllllll area.
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§ 1767.41
Dr. 593, Maintenance of Overhead Lines ...........................................
$607.24
Dr. 595, Maintenance of Line Transformers .....................................
19,365.86
Dr. 597, Maintenance of Meters ........................................................
6,595.56
Cr. 107.4, Construction Work in Progress—Storm Damage ........ ..................
$26,568.66
To charge the costs of repairing damaged meters, transformers, voltage regulators, and
OCRs to the appropriate expense accounts. Repair costs were originally charged to Account 107.4.
593
595
597
Meters .........................................................................
Transformers ..............................................................
Voltage Regulators .....................................................
Oil Circuit Reclosers ..................................................
..................
..................
..................
$607.24
..................
$18,869.95
495.91
..................
$6,595.56
..................
..................
..................
Total ..................................................................
607.24
19,365.86
6,595.56
Dr. 920, Administrative and General Salaries .................................................
$32,000.00
Dr. 921, Office Supplies and Expenses ...........................................................
4,421.69
Cr. 107.4, Construction Work in Progress—Storm Damage .................... ........................
$36,421.69
To charge the administrative costs incurred to obtain the FEMA grant to the appropriate expense accounts.
Administrative costs were originally charged to Account 107.4.
Salaries .....................................................................................................
$32,000.00
Office Supplies ..........................................................................................
4,421.69
Total ......................................................................................................
$36,421.69
Dr. 571, Maintenance of Overhead Lines ........................................................
$3,675.60
Dr. 593, Maintenance of Overhead Lines ........................................................
33,080.40
Cr. 107.4, Construction Work in Progress Storm Damage ...................... ........................
$36,756.00
To allocate expenses remaining in Account 107.4 to distribution and transmission maintenance expense. It
was estimated that only 10 percent is applicable to transmission.
Dr. 426.5, Other Deductions ............................................................................
$275,000.00
Dr. 435, Extraordinary Deductions
Dr. 182.1, Extraordinary Property Losses
Cr. 108.5, Accumulated Provision for Depreciation of Transmission
Plant ...................................................................................................... ........................
$35,000.00
Cr. 108.6, Accumulated Provision for Depreciation of Distribution Plant
........................
240,000.00
To restore the accumulated provisions for depreciation to their appropriate levels based upon a study of plant
currently in service.
NOTE: Account 426.5, Other Deductions, should be used to record the retirement loss as a
current period expense. Account 435, Extraordinary Deductions, may be used when the loss
will materially distort the income statement. Account 182.1, Extraordinary Property Losses,
should be used when such costs are being deferred under the provisions of Statement No. 71.
Costs recorded in this account should be amortized to Account 407, Amortization of Property
Losses, as the costs are recovered through rates.
Dr. 131.1, Cash—General ................................................................... $1,000,000.00
Cr. 253, Other Deferred Credits ................................................... .................. $1,000,000.00
To record the receipt of funds from the Federal Emergency Management Administration
(FEMA).
Dr. 253, Other Deferred Credits ......................................................... $1,000,000.00
Cr. 108.5, Accumulated Provision for Depreciation of Transmission Plant .......................................................................... ..................
$74,205.00
Cr. 108.6, Accumulated Provision for Depreciation of Distribution Plant ................................................................................ ..................
191,575.00
Cr. 186, Miscellaneous Deferred Debits ....................................... ..................
872.00
Cr. 355, Poles and Fixtures ......................................................... ..................
129,056.00
Cr. 356, Overhead Conductors and Devices ................................. ..................
99,408.00
Cr. 364, Poles, Towers and Fixtures ............................................ ..................
78,916.00
Cr. 365, Overhead Conductors and Devices ................................. ..................
82,840.00
Cr. 368, Line Transformers ......................................................... ..................
20,056.00
Cr. 369, Services .......................................................................... ..................
23,108.00
Cr. 373, Street Lighting and Signal Systems .............................. ..................
1,744.00
Cr. 426.5, Other Deductions ......................................................... ..................
219,220.00
Cr. 571, Maintenance of Overhead Lines ..................................... ..................
2,900.00
Cr. 593, Maintenance of Overhead Lines ..................................... ..................
26,600.00
Cr. 595, Maintenance of Line Transformers ................................ ..................
15,300.00
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Cr. 597, Maintenance of Meters ................................................... ..................
Cr. 920, Administrative and General Salaries ............................. ..................
Cr. 921, Office Supplies and Expenses ......................................... ..................
To allocate FEMA funds to the proper accounts..
Summary of Costs
Maintenance:
Account 571, Maintenance of Overhead Lines ..................................................
Account 593, Maintenance of Overhead Lines ..................................................
Account 595, Maintenance of Line Transformers ............................................
Account 597, Maintenance of Meters ...............................................................
5,200.00
25,491.00
3,509.00
Total Maintenance Costs ..............................................................................
63,324.26
$3,675.60
33,687.24
19,365.86
6,595.56
Retirement Loss:
Account 108.5, Accumulated Provision for Depreciation of Transmission
Plant .............................................................................................................
Account 108.6, Accumulated Provision for Depreciation of Distribution
Plant .............................................................................................................
Account 426.5, Other Deductions .....................................................................
240,599.35
275,000.00
Total Retirement Loss .................................................................................
609,062.17
Construction:
Account 186,
Account 355,
Account 356,
Account 364,
Account 365,
Account 368,
Account 369,
Account 373,
93,462.82
Miscellaneous Deferred Debits ...................................................
Poles and Fixtures ......................................................................
Overhead Conductors and Devices ..............................................
Poles, Towers and Fixtures ........................................................
Overhead Conductor and Devices ................................................
Line Transformers ......................................................................
Services ......................................................................................
Street Lighting and Signal Systems ..........................................
1,319.85
161,784.05
124,704.77
99,075.40
104,142.22
25,036.07
28,865.08
2,101.60
Total Construction Cost ...............................................................................
547,029.04
Administrative:
Account 920, Administrative and General Salaries .........................................
Account 921, Office Supplies and Expenses ......................................................
$32,000.00
4,421.69
Total Administrative Cost ...........................................................................
36,421.69
Maintenance ....................................................................................................
Retirement Loss ..............................................................................................
Construction ....................................................................................................
Administrative ................................................................................................
63,324.26
609,062.17
547,029.04
36,421.69
Total Costs ...................................................................................................
1,255,837.16
Distribution of FEMA Funds
Maintenance: 63,324.26÷1,255,837.16=.0504=5.0%
Retirement: 609,062.17÷1,255,837.16=.4850=48.5%
Construction: 547,029.04÷1,255,837.16=.4356 = 43.6%
Administrative: 36,421.69÷1,255,837.16=.0290=2.9%
Maintenance: $1,000,000.00×5.0%= ...........................................................................
Retirement: $1,000,000.00×48.5%= ............................................................................
Construction: $1,000,000.00×43.6%= .........................................................................
Administrative: $1,000,000.00×2.9%= .......................................................................
$50,000.00
485,000.00
436,000.00
29,000.00
Total .............................................................................................................
1,000,000.00
Distribution of FEMA Funds—Maintenance
3,675.60÷63,324.26=.0580=5.8%
33,687.24÷63,324.26=.5320=53.2%
19,365.86÷63,324.26=.3058=30.6%
6,595.56÷63,324.26=.1041=10.4%
$50,000.00×5.8%= .................................................................................
$50,000.00×53.2%= ................................................................................
$50,000.00×30.6%= ................................................................................
$2,900.00
26,600.00
15,300.00
Account
Account
Account
Account
Account
Account
Account
571:
593:
595:
597:
571:
593:
595:
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Rural Utilities Service, USDA
§ 1767.41
Account 597: $50,000.00×10.4%= ................................................................................
5,200.00
Total .............................................................................................................
50,000.00
Distribution of FEMA Funds—Retirement Loss
93,462.82÷609,062.17=.1535=15.3%
240,599.35÷609,062.17=.3950=39.5%
275,000.00÷609,062.17=.4515=45.2%
$485,000.00×15.3%= ............................................................................
$485,000.00×39.5%= ............................................................................
$485,000.00×45.2%= ............................................................................
$74,205.00
191,575.00
219,220.00
Total .............................................................................................................
485,000.00
Distribution of FEMA Funds—Construction
1,319.85÷547,029.04=.0024=.2%
161,784.05÷547,029.04=.2958=29.6%
124,704.77÷547,029.04=.2280=22.8%
99,075.40÷547,029.04=.1811=18.1%
104,142.22÷547,029.04=.1904=19.0%
25,036.07÷547,029.04=.0457=4.6%
28,865.08÷547,029.04=.0528=5.3%
2,101.67÷547,029.04=.0038=.4%
$436,000.00×.2%= .................................................................................
$436,000.00×29.6%= ..............................................................................
$436,000.00×22.8%= ..............................................................................
$436,000.00×18.1%= ..............................................................................
$436,000.00×19.0%= ..............................................................................
$436,000.00×4.6%= ................................................................................
$436,000.00×5.3%= ................................................................................
$436,000.00×.4%= .................................................................................
$872.00
129,056.00
99,408.00
78,916.00
82,840.00
20,056.00
23,108.00
1,744.00
Total .............................................................................................................
436,000.00
Distribution of FEMA Funds—Administrative
32,000.00÷36,421.69=.8786=87.9%
4,421.69÷36,421.69=.1213=12.1%
$29,000.00×87.9%= ................................................................................
$29,000.00×12.1%= ................................................................................
$25,491.00
3,509.00
Total .............................................................................................................
29,000.00
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
Account
108.5:
108.6:
426.5:
108.5:
108.6:
426.5:
186:
355:
356:
364:
365:
368:
369:
373:
186:
355:
356:
364:
365:
368:
369:
373:
920:
921:
920:
921:
137 Impairment of Long-Lived Assets
Statement of Financial Accounting Standards No. 121, Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of (Statement No. 121),
requires reporting entities to review all
long-lived assets and certain identifiable intangibles that are to be held, used, or disposed of by that entity for impairment whenever events and changes in circumstances indicate that the carrying amount of the asset
may not be recoverable. If the sum of the expected future cash flows (undiscounted and
without interest charges) is less than the
carrying value of the asset, the entity must
recognize an impairment loss. The impairment loss is measured as the amount by
which the carrying amount of the asset exceeds the fair value of the asset. The impairment loss is reported as a component of income from continuing operations before income taxes for entities presenting an income
statement and in the statement of activities
of not-for-profit organizations. Statement
No. 121 does not apply to assets included in
the scope of Statement of Financial Accounting Standards No. 90, Regulated Enterprises—Accounting for Abandonments and
Disallowances of Plant Costs.
Assets To Be Held or Used
Entities are required to review long-lived
assets and certain identifiable intangibles
whenever events or changes in circumstances
indicate that the carrying value of the asset
may not be recoverable. For example:
1. A significant decrease in the market
value of an asset;
2. A significant change in the extent or
manner in which an asset is used;
3. A significant physical change in an
asset;
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
4. A significant adverse change in legal factors or in the business climate that could affect the value of an asset;
5. An adverse action or assessment by a
regulator;
6. An accumulation of costs significantly
in excess of the amount originally expected
to acquire or construct an asset; and
7. A current period operating or cash flow
loss combined with a history of operating or
cash flow losses or a projection or forecast
that demonstrates continued losses associated with an asset used for the purpose of
producing revenue.
The impairment of the asset is measured
by estimating the future cash flows expected
to result from the use of the asset and its
disposition. Assets are grouped at the lowest
level for which there are identifiable cash
flows that are largely independent of the
cash flows of other groups of assets. Future
cash flows are those cash inflows that are expected to be generated by the asset less the
cash outflows expected to be necessary to
maintain those inflows. If the future cash
flows (undiscounted and without interest
charges) are less than the carrying value of
the asset, an impairment loss must be recognized. If the expected future cash flows are
greater than the carrying value of the asset,
no impairment loss exists.
The impairment loss is the amount by
which the carrying amount (acquisition cost
less accumulated depreciation) of the asset
exceeds the fair value of the asset. The fair
value of the asset is the amount for which
the asset could be bought or sold in an armslength transaction between willing parties.
A quoted market price is the best evidence of
fair value. If this information is not available, the fair value should be based upon the
best information available. Consideration
should be given to the price of similar assets
and valuation techniques such as the present
value of the expected future cash flows discounted at a rate representative of the risk
involved, option-pricing models, matrix pricing, option-adjusted spread models, and fundamental analysis. All available information
should be considered when using the above
pricing techniques.
If an impairment is recognized, the carrying value of the asset is reduced to the
lower of its fair value or its carrying value
and, if depreciable, depreciated over the remaining useful life. Previously recognized
impairment losses cannot be restored. If the
asset was acquired in a business combination
and there is goodwill resulting from the
transaction, the goodwill is included in the
asset grouping and reduced or eliminated before any adjustment is made to the carrying
value of the asset.
The following financial statement disclosures are required in the period in which the
impairment is recognized:
1. A description of the impaired assets and
the facts and circumstances surrounding the
impairment;
2. The amount of the impairment and how
fair value was determined;
3. The caption in the income statement or
the statement of activities in which the impairment loss is aggregated if that loss has
not been presented as a separate caption or
reported parenthetically on the face of the
statement; and
4. If applicable, the business segment(s) affected.
Assets To Be Disposed
Statement No. 121 also applies to all longlived assets and certain identifiable intangibles for which management, having the authority to approve the action, has committed to a plan of disposal except those assets covered by APB No. 30, Reporting the
Results of Operations—Reporting the Effects
of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. An asset to
be disposed of is carried at the lower of its
carrying amount (acquisition cost less accumulated depreciation) or its fair value less
cost to sell.
The fair value of the asset to be disposed of
is computed in the same manner as that for
an asset to be held or used by the entity.
Selling costs include the incremental direct
cost to transact the sale—broker commissions, legal fees, title transfer, and other
closing costs that must be incurred before
legal title can be transferred. Costs such as
insurance, security service, and utilities are
generally excluded unless these costs are
part of a contractual agreement that obligates the entity to incur such costs in the future. If the asset’s fair value is based upon
current market price or the current selling
price for a similar asset, the fair value is
considered a current amount and is not discounted. If, however, the fair value is based
upon discounted expected future cash flows
and if the sale is to occur beyond one year,
the cost to sell must also be discounted. Assets covered by this statement are not depreciated (amortized) while being held for disposal.
Subsequent revisions in estimates of fair
value less cost to sell are reported as adjustments to the carrying amount of the asset to
be disposed of as long as the carrying
amount of the asset does not exceed the
original carrying amount.
The following financial statement disclosures are required in the period in which the
impairment is recognized:
1. A description of the assets to be disposed
of including the facts and circumstances
leading to the expected disposal, the expected disposal date, and the carrying
amount of those assets;
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Rural Utilities Service, USDA
§ 1767.41
2. If applicable, the business segment(s) in
which the assets to be disposed of are held;
3. The amount, if any, of the impairment
loss resulting from the adoption of this
statement;
4. The gain or loss, if any, resulting from
subsequent revisions in the estimates of fair
value less cost to sell;
5. The caption in the income statement or
statement of activities in which the gains or
losses are aggregated if those gains or losses
have not been presented as a separate caption or reported parenthetically on the face
of the statement; and
6. The results of operations for assets to be
disposed of to the extent that those results
are included in the entity’s results of operations for the period and can be identified.
Accounting Requirements
All borrowers must adopt the accounting
prescribed by Statement No. 121.
Effective Date and Implementation
Statement No. 121 is effective for financial
statements for fiscal years beginning after
December 15, 1995. Impairment losses resulting from the application of this statement to
assets that are held or used by the entity
must be reported in the period in which the
recognition criteria are first applied and
met. Impairment losses attributable to assets to be disposed of must be reported as the
cumulative effect of a change in accounting
principle as prescribed in Accounting Principles Board Opinion No. 20, Accounting
Changes.
Accounting Journal Entries—Implementation
Date
If a borrower has impaired assets that are
held or used at the implementation date, the
following entry should be recorded:
Dr. 426.5, Other Deductions
Cr. 300 Series of Accounts, Plant Accounts
To record the adoption of Statement No. 121
for the impairment of assets that are held
or used.
If a borrower has impaired assets to be disposed of at the implementation date, the following entry should be recorded:
Dr. 435.1, Cumulative Effect on Prior Years
of a Change in Accounting Principle
Cr. 300 Series—Plant Accounts
To record the adoption of Statement No. 121
for assets that are to be disposed.
Accounting Journal Entries—Subsequent to
Implementation Date
If an asset that is either held, used or to be
disposed of becomes impaired, the following
entry should be recorded:
Dr. 426.5, Other Deductions
Cr. 300 Series—Plant Accounts
To record the impairment of a plant asset.
If a borrower makes a subsequent revision
in the estimate of the fair value less the cost
to sell of an asset to be disposed of, the following entry should be recorded:
Dr. 300 Series—Plant Accounts
Cr. 421, Miscellaneous Nonoperating Income
To revise the fair value of an asset to be disposed.
138
Automatic Meter Reading Systems—
Turtles
Automatic meter reading systems were developed from technology called power line
carrier communication systems. One such
system, developed by Hunt Technologies,
Inc., is called by its brand name, the Turtle
system. In addition to its function as an
automated reading device, the Turtle can
provide outage detection, power failure
counts, and other potential applications. The
current Turtle system does not have the capability for applications such as collection of
load survey or interval data. A Turtle system consists of:
1. A meter reader mounted (retrofitted) inside the meter;
2. A receiver located in each substation;
and
3. Monitoring and programming equipment
(software and personal computer) usually located in the headquarters building.
The system transmits continuous information one way from the meter to a receiver located in the substation. The receiver constantly monitors every Turtle meter served
by the substation. The substation receiver
can be sized to monitor up to 3,000 Turtle
meter readers at the same time. The data is
then transmitted to the headquarters monitoring equipment via telephone line or an
equivalent communication system.
The technical literature and other information provided by the manufacturer indicates that this system can only be used for
remote meter reading, outage detection,
power failure counts, and phase identification. At this time, there is no indication
that the system supports other functions
such as home security. Therefore, the accounting prescribed for the Turtle meter
reading devices and support equipment relates only to electric utility operations.
Accounting Requirements
The function of the equipment is the primary factor in determining the account in
which the equipment shall be recorded. The
components of the Turtle automatic meter
reading system shall be recorded in Account
370, Meters. The cost of the meter reader encoding device and retrofitting the meter
with the meter reader unit shall be capitalized to the cost of the existing meter. Any
associated operating expenses shall be
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
charged to Account 586, Meter Expenses,
with maintenance expenses charged to Account 597, Maintenance of Meters.
Separate continuing property records shall
be established for the meters, either fitted or
retrofitted with the device; the receiver; the
personal computer; and the system software.
The meters, receivers, and personal computer shall be depreciated over the manufacturer’s estimated useful service life. The system software shall be depreciated over the
estimated useful service life of the program
not to exceed 5 years.
139
Global Positioning Systems
The Global Positioning System (GPS) is a
worldwide radio-navigation system formed
from a network of 24 satellites and their
ground stations. Utilities are using this advanced technology geographic data collection system to update and modernize their
system maps. GPS uses a system of satellites
orbiting the earth to establish plant locations with pinpoint accuracy. By triangulating from three satellites and using radio
signals to measure distances and locate
items, system-wide maps can be created of
the utility’s service area. A field inventory is
then taken of the utility’s plant and plotted
onto the map. The GPS consists of base station equipment, remote station equipment,
the GPS program, and mapping conversion
software.
All equipment associated with GPS is dedicated to the mapping effort. The base station
is installed at a fixed location and ties satellite measurements into a solid local reference. The remote station is a portable receiver that is taken into the field to determine locations and is moved from site to
site. The GPS program is the application
software that operates the station equipment and is used by layout technicians to
gather information of existing and new facilities in the field. The conversion software
is used for converting the GPS and inventory
information gathered in the field into a form
usable by the mapping program.
Accounting Requirements
The function and location of the equipment are the primary factors in determining
the account in which the equipment shall be
recorded. The components of the GPS shall
be accounted for as follows:
1. Remote and Base Station Equipment. The
cost of the equipment, both remote and
fixed, shall be capitalized in a subaccount of
Account 391, Office Furniture and Equipment.
2. GPS Program and Conversion Software for
Mapping. The cost of GPS program and conversion software shall be capitalized in a
subaccount of Account 391, Office Furniture
and Equipment.
3. GPS/GIS Field Inventory of System. The
cost of performing a GPS/GIS survey and
field inventory of the existing system, by either a consultant or the utility’s own forces,
shall be charged to Account 588, Miscellaneous Distribution Expenses.
140
Radio-Based Automatic Meter Reading
Systems
Radio-based automatic meter reading technology allows meters equipped with a lowpower radio device called an ERT (Encoder,
Receiver, Transmitter) to be read from a remote location. The ERT device can either be
retrofitted to an existing meter or purchased
installed in a new meter. The ERT device
‘‘encodes’’ energy consumption and transmits this information to a radio transceiver
equipped handheld computer. The data collected and stored in the handheld computer
is then uploaded to a billing computer using
specialized software for that purpose.
Accounting Requirements
The function of the equipment is the primary factor in determining the account in
which the equipment shall be recorded. The
components of the radio-based automatic
meter reading system shall be recorded in
Account 370, Meters. The cost of the meter
reader encoding device and retrofitting the
meter with the meter reader unit shall be
capitalized to the cost of the existing meter.
Any associated operating expenses shall be
charged to Account 586, Meter Expenses,
with maintenance expenses charged to Account 597, Maintenance of Meters.
Separate continuing property records shall
be established for the meters, either fitted or
retrofitted with the device; the handheld
computer; and the upload software. The meters and handheld computer shall be depreciated over the manufacturer’s estimated
useful service life. The upload software shall
be depreciated over the estimated useful
service life of the program not to exceed 5
years.
201
Supplemental Financing
Many borrowers secure additional financing from sources other than RUS. CFC was
established to provide a source of supplemental financing. Although the accounting
provided in this section refers to CFC, it is
applicable to other sources of supplemental
financing as well.
1. Membership Fees
When a membership fee is paid to CFC, the
payment shall be recorded as a debit to Account 123.23, Other Investments in Associated Organizations.
2. Subscriptions
The subscription agreement to purchase
Capital Term Certificates (CTCs) is a binding
obligation to pay an initial subscription in
equal annual payments over the first three
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Rural Utilities Service, USDA
§ 1767.41
years and an additional annual subscription
payable in the fourth through fifteenth
years.
The annual subscriptions to CFC for the
fourth through fifteenth years is 2.0 percent
of total operating revenues after deducting
the cost of power. Using the best data available, each borrower shall estimate the
amount of CTCs that are required to be purchased. Estimates are not expected to be precise and adjustments shall be made when future projections indicate a change is needed.
When the agreement to purchase CTCs is
made, an entry shall be recorded debiting
Account 123.21, Subscriptions to Capital
Term Certificates—Supplemental Financing,
and crediting Account 224.11, Other LongTerm Debit—Subscriptions. When the CTCs
are actually purchased, the following entries
shall be recorded:
Dr. 224.11, Other Long-Term Debt—Subscriptions
Cr. 131.1, Cash—General
Dr. 123.22, Investments in Capital Term Certificates—Supplemental Financing
Cr. 123.21, Subscriptions to Capital Term
Certificates—Supplemental Financing
3. Interest Receipts
Interest accrues monthly to the holder of
CTCs at a rate in accordance with the terms
of the CFC Invitation to Subscribe. The accrual of interest and the receipt of interest
proceeds shall be recorded as follows:
Dr. 171, Interest and Dividends Receivable
Cr. 419, Interest and Dividend Income
To record the monthly accrual of interest.
Dr. 131.1, Cash—General
Cr. 171, Interest and Dividends Receivable
To record the receipt of interest proceeds
from the investment in CTCs.
NOTE: Any amounts received in excess of
the previous accruals shall be credited to Account 419.
Interest penalties may be charged by CFC
for late payments on any subscription from
the date that the payment was due to the
date that the payment was actually received.
Such charges shall be expensed to Account
431, Other Interest Expense.
4. Notes
If a note is due more than one year after
the date of the note, the appropriate subaccount of Account 224, Other Long-Term
Debt, shall be credited. If the note is due less
than one year from the date of the note, Account 231, Notes Payable, shall be credited.
When a loan from CFC has been consummated and a note is executed, Account
224.13, Supplemental Financing Notes Executed—Debit, shall be debited; and Account
224.12, Other Long-Term Debt—Supplemental
Financing, credited. When a loan from another source has been consummated, Account 224.15, Notes Executed—Other—Debit,
shall be debited; and Account 224.14, Other
Long-Term Debt—Miscellaneous, credited.
5. Loan Proceeds
Cash proceeds from unsecured short-term
loans shall be deposited into the General
Fund Account. Cash proceeds from all secured loans shall be deposited into the Construction Fund Trustee Account.
From two to seven percent, depending
upon the class of borrower and its debt-equity ratio, of each CFC loan is applied to the
purchase of Capital Term Certificates. At the
time of a borrower’s first requisition under
the CFC loan, the following entry shall be recorded:
Dr. 131.2, Cash—Construction Fund—Trustee
Dr. 123.22, Investments in Capital Term Certificates—Supplemental Financing
Cr. 224.13, Supplemental Financing Notes
Executed—Debit
To record the requisition of funds from CFC.
6. Capital Credits
As a result of borrowing from CFC or other
lenders organized on a cooperative basis, a
borrower may receive capital credit allocations. These allocations are usually based
upon the borrower’s participation in the
lending program with participation measured by the amount of interest expense and
conversion costs incurred.
To account for patronage capital allocations from cooperative lenders, the following
journal entries shall be recorded:
Dr. 123.1, Patronage Capital from Associated
Cooperatives
Cr. 424, Other Capital Credits and Patronage Capital Allocations
To record the allocation of capital credits
from a cooperative lender.
NOTE: If any portion of the interest expense was capitalized as a component of construction cost, a similar portion of the capital credit allocation shall be credited to
construction rather than to Account 424. The
portion credited to construction shall be determined by applying the percentage of interest expense charged to construction for
that particular lender to the interest expense incurred for that lender.
Dr. 131.1, Cash—General
Cr. 123.1, Patronage Capital from Associated Cooperatives
To record the cash receipt of patronage capital credits from cooperative lenders.
301
Forfeited Customers’ Deposits
Customers may be required to make deposits to guarantee payment of amounts billed
for electric service. When a customer discontinues service, the customer’s deposit shall
first be applied to unpaid energy bills, with
the balance remitted by check to the customer. If the check is returned, it shall be
voided and the original entry that was made
when the check was issued shall be reversed.
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Unclaimed balances of customer deposits
shall remain in Account 235, Customer Deposits, until the legal liability of the cooperative to make such a refund has elapsed.
When there is no further legal liability to refund the deposit and if it does not escheat to
the state, it shall be transferred to Account
144, Accumulated Provision for Uncollectible
Customer Accounts—Credit, retaining full
information of all particulars.
401
Computer Software Costs
Computer software consists of programs
and routines (sets of computer instructions)
which direct the operation of the computer.
Software may refer to generalized routines
useful in computer operations or to programs for specific applications such as payroll.
The distinction between generalized software and application software is important.
Generalized software provides operating support for individual applications. This would
include programs for such tasks as making
printouts of machine-readable records, sorting records, organizing and maintaining
files, translating programs written in a symbolic language into machine-language instructions, and scheduling jobs through the
computer. These programs are generally furnished by the manufacturer.
Application software consists of a set of instructions for performing a particular data
processing task. Application programs are
generally written by the user installation,
but are frequently obtained as prewritten
packages from software vendors. Application
software includes programs such as payroll,
billing, general ledger, as well as engineering
or managerial applications.
Costs incurred with the purchase or development of computer software shall be accounted for as follows:
1. Capitalize in a subaccount of Account
391, Office Furniture and Equipment, all
costs for generalized software. Depreciate
the cost over the service life (or remaining
life) of the main hardware (i.e., containing
central processor). If the purchase invoice
does not break out or assign a cost to the
‘‘generalized software,’’ it is appropriate to
include the full amount in hardware costs.
Capitalize in a separate subaccount of Account 391, all costs for applications software
determined to have a service life of over one
year. Depreciate the cost over the estimated
useful service life of the program. This depreciation period shall not exceed five (5)
years. RUS realizes, however, that there may
be circumstances that justify a useful life
longer than 5 years. When this is the case
and it is management’s intent to utilize
these programs over an extended period,
written justification shall be submitted to
RUS for approval.
2. Expense in Account 921, Office Supplies
and Expenses, in the period incurred, all
costs associated with the maintenance, updating, and conversion of files or revision of
all software, and all costs for software with
a useful life of less than 1 year. Also expense
in Account 921, the unamortized cost of all
software determined, during the year, to be
no longer used by or useful to the cooperative. Such costs that are clearly applicable
to any category of operating expenses other
than the administrative and general category, however, shall be included in the appropriate account in such category. In accordance with the USoA, no portion of such
costs shall be capitalized to construction or
retirement activities.
In determining the total cost of purchased
or internally developed software, the following items shall be included:
a. Costs incurred for feasibility studies if
they result in the purchase or development
of software;
b. All costs related to the actual purchase
or development of the software. These costs
must be specifically identifiable with the
software and properly supported by time
cards, invoices, or other documents; and
c. All costs incurred in ‘‘testing and debugging’’ the software.
Computer software costs are properly
chargeable to Account 107, Construction
Work in Progress, provided that the following criteria are met:
1. The computer program is specifically
dedicated to performing a construction related activity, and
2. The cost of the software is itemized separate and apart from other hardware and
software costs.
The cost of software programs meeting the
above requirements and having an estimated
useful service life in excess of 1 year shall be
recorded in Account 186, Miscellaneous Deferred Debits, and amortized to Account 107,
Construction Work in Progress, over the estimated service life of the program not to exceed 5 years.
All costs related to training personnel in
the use of software shall be expensed as incurred.
The accounting in this section is not intended to apply to immaterial amounts.
When it is deemed that the costs of the recordkeeping necessary to amortize these costs
outweigh the benefits to the members, software costs shall be expensed in the year incurred.
For computer costs relating to load control equipment, refer to Item 118 of this section.
402
Legal Expenses
Utilities may incur legal expenses which
pertain to construction activities, loan activities, or general services. The proper accounting treatment for legal expenses is as
follows:
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Rural Utilities Service, USDA
§ 1767.41
1. Legal fees incurred in connection with a
construction project, including the court
costs directly related thereto, which can be
identified and supported as such, shall be
capitalized in Account 107, Construction
Work-in-Progress, as a cost of construction.
2. Legal fees specifically identified and
properly supported as resulting from activities designed to obtain long-term debt, shall
be deferred in Account 181, Unamortized
Debt Expense.
3. Legal fees for all other services and fees
which cannot be properly identified will require expensing to either Account 417.1, Expenses of Nonutility Operations, or Account
923, Outside Services Employed, as appropriate.
To properly support the capitalization or
deferral of legal fees, the attorney shall provide an itemization of services performed
and the corresponding costs. Only those
costs specifically identified by the attorney
as being related to construction or loan activities shall be capitalized or deferred as described above.
403
Leases
Lease transactions shall be accounted for
as either a capital lease or an operating lease
depending upon whether or not the lease
meets the criteria for classification as a capital lease. The definitions for capital and operating leases and the criteria used to determine which method shall be used are as follows:
Definitions
1. Capital Lease: A lease that transfers substantially all of the benefits and risks inherent in the ownership of the property to the
lessee, who accounts for the lease as an acquisition of an asset and the incurrence of a
liability.
2. Operating Lease: An operating lease is a
simple rental agreement which does not
meet the criteria for a capital lease. Under
the terms of an operating lease, the lessee
records the rental payments due over the
term of the lease as rent expense.
Criteria
A lease agreement shall be classified as a
capital lease if one or more of the following
criteria is met:
1. Ownership of the property is transferred
to the lessee by the end of the lease term;
2. The lease contains a bargain purchase
option;
3. The lease term is equal to 75 percent or
more of the estimated useful life of the
leased property; or
4. The present value of the lease payments
at the inception of the lease equals or exceeds 90 percent of the fair market value of
the leased property.
A lease agreement qualifying as a capital
lease shall be recorded in either Account
101.1,
Property
Under
Capital
Leases;Account 120.6, Nuclear Fuel Under
Capital Leases; or Account 121, Nonutility
Property, as appropriate, at the present
value (at the beginning of the lease term) of
the minimum lease payments. If, however,
this amount exceeds the fair value of the
leased property at the inception of the lease,
the asset shall be recorded at its fair market
value. An offsetting credit shall be recorded
in Account 227, Obligations Under Capital
Leases—Noncurrent, with the current portion recorded in Account 243, Obligations
Under Capital Leases—Current. Assets recorded in Account 101.1 shall be classified
separately according to the detailed accounts (301–399) provided for electric plant in
service.
Monthly payments made under the lease
obligation shall be charged to rent expense,
fuel expense, or construction work-inprogress as they become payable. Similarly,
the leased asset and the associated obligation shall be reduced by the current amount
due.
The following journal entries shall be used
by the lessee to record capital lease transactions:
Dr. 101.1, Property Under Capital Leases
Cr. 243, Obligations Under Capital Leases—
Current
Cr. 227, Obligations Under Capital Leases—
Noncurrent
To record the capital lease agreement.
Dr. 550, Rents
Cr. 232, Accounts Payable
Dr. 243, Obligations Under Capital Leases—
Current
Cr. 101.1, Property Under Capital Leases
To record the monthly rental payment due.
Dr. 232, Accounts Payable
Cr. 131.1, Cash—General
To record the monthly lease payment.
Operating leases which are simple rental
agreements do not require the recording of
an asset or a liability. The entries that are
required to record an operating lease by the
lessee are as follows:
Dr. 550, Rents
Cr. 232, Accounts Payable
To record the monthly rental payment due.
Dr. 232, Accounts Payable
Cr. 131.1, Cash—General
To record the monthly lease payment.
For purposes of illustration, the journal
entries presented in this interpretation debit
Account 550, Rents. However, Account 507,
Rents (steam power generation); Account
525, Rents (nuclear power generation); Account 540, Rents (hydraulic power generation); Account 550, Rents (other power production); Account 567, Rents (transmission
expense); Account 589, Rents (distribution
expense); and Account 931, Rents (general
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
and administrative), should be charged, as
appropriate, depending upon the function of
the equipment being leased.
404
Consolidated Financial Statements
In October 1987, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 94, Consolidation of All Majority-Owned Subsidiaries
(Statement No. 94). For purposes of reporting
to RUS, Statement No. 94 shall be applied as
follows:
1. An RUS borrower that is a subsidiary of
another entity shall prepare and submit to
RUS separate financial statements even
though this financial information is presented in the parent’s consolidated statements.
2. In those cases in which an RUS borrower
has a majority-ownership in a subsidiary,
the borrower must prepare consolidated financial statements in accordance with the
requirements of Statement No. 94. These
consolidated statements must also include
supplementary schedules presenting a Balance Sheet and Income Statement for each
majority-owned subsidiary included in the
consolidated statements.
Although Statement No. 94 requires the
consolidation of majority-owned subsidiaries, Forms 7 and 12 must be prepared on a
basis consistent with the equity method of
accounting for investments. For distribution
borrowers, this requires that the investment
be shown on Form 7 in Part C, Balance
Sheet, on line 7, Investments in Subsidiary
Companies, or line 9, Investments in Associated Organizations—Other—General Funds,
as appropriate. The result of operation is
shown in Part A, Statement of Operations,
on line 23, Income (Loss) from Equity Investments. For generation and transmission borrowers, the investments should be shown on
Form 12, in Section C, Balance Sheet, on
Line 7, Investments in Subsidiary Companies, or Line 9, Investments in Associated
Organizations—Other—General Funds, as appropriate. The result of operations should be
shown in Section A, Statement of Operations, on line 30, Income (Loss) from Equity
Investments.
501
Patronage Capital Assignments
Accounting for patronage capital and margins may vary depending upon the individual
cooperative’s bylaws. The comments contained in this section relate to the application of the standard bylaw provisions.
The entries required, at year’s end, to
record patronage capital transactions where
there is no major merchandising program are
as follows:
Dr. 219.1, Operating Margins
Dr. 219.2, Nonoperating margins
Cr. 201.2, Patronage Capital Assignable
To record the amount of patronage capital
assignable.
Dr. 201.2, Patronage Capital Assignable
Cr. 201.1, Patronage Capital Credits
To record the allocation of patronage capital
to the patrons’ accounts.
The procedure for determining the amount
of patronage capital assignable to the individual patron on a total dollar basis is as follows:
1. Determine the total amount to be assigned for the year (Account 201.2).
2. Determine patronage from electric service, the total of consumers’ billings (Accounts 440–447).
3. Determine the percentage factor to be
used in calculating patronage capital to be
credited to each consumer account. Divide
‘‘1’’ by ‘‘2’’.
4. Determine the amount of capital to be
credited to each consumer. Multiply the individual consumer’s billings for the year by
the percentage factor obtained in ‘‘3’’ above.
The procedure for determining the amount
of patronage capital assignable to the individual patron on a dollar basis, less the cost
of power, is as follows:
1. Determine the total amount to be assigned for the year.
2. Determine the total amount of revenue
received from each classification of customers.
3. Determine the total cost of power for
each classification of customers. (For example, use cost per kWh sold).
4. For each classification of customers subtract the amount obtained in ‘‘3’’ from the
amount obtained in ‘‘2,’’ to obtain the total
amount received, less cost of power, by classification of customers.
5. Add the amounts obtained in ‘‘4’’ to obtain the total amount of revenue, less cost of
power.
6. Divide the total amount received, less
cost of power for each classification of customers (amounts obtained in ‘‘4’’), by the
total amount received, less cost of power for
all customers (amount obtained in ‘‘5’’) to
obtain the prorata percentage for each classification of customers.
7. Multiply the total amount to be allocated (amount obtained in ‘‘1’’) by the
prorata percentage for each classification of
customers (obtained in ‘‘6’’) to obtain the
amount to be assigned each classification of
customers.
8. Divide the amount to be assigned each
classification of customers (amount obtained
in ‘‘7’’) by the total amount received from
the classification of customers (amount obtain in ‘‘2’’) to obtain the percentage factor
for each classification of customers.
9. Determine the total amount received
from each individual customer.
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Rural Utilities Service, USDA
§ 1767.41
10. Multiply the total amount received
from each individual customer (amount obtained in ‘‘9’’) by the percentage factor for
his classification (amount obtained in ‘‘8’’)
to obtain the amount of capital to be assigned each individual customer.
After calculating the patronage capital to
be credited to each customer, there is usually a small balance remaining. This small
balance shall remain in Account 201.2, Patronage Capital Assignable, and shall be
added to the amount to be assigned in the
following year.
Proper records shall be maintained to support all capital credit transactions. As a
minimum, these records shall show, for each
patron, the amount of capital credited for
each year as well as the amount and date retired for each year.
The process of transferring capital credits
from the Patronage Capital Assignable accounts to the Patrons’ Capital Credits Assigned accounts or to the Patrons’ Capital
Credits accounts and the making of entries
to individual patron’s records constitutes an
assignment of capital credits. This holds
true for recordkeeping purposes as well as
from a legal point of view. This assignment
shall be followed by formal notification to
patrons within a reasonable period of time.
In the event that a distribution cooperative incurs a net loss, that loss shall not be
allocated to its members (patrons). The loss
shall be accumulated and offset by future
nonoperating margins.
502
Patronage Capital Retirements
As the board of directors has the responsibility for determining whether the financial
condition of the cooperative will permit retirement of capital credits and whether the
proposed retirement complies with mortgage
and bylaw provisions, the authorization for
the retirement shall be set forth in the board
minutes. The entries to record the general
retirement of capital credits shall be as follows:
Dr. 201.1, Patronage Capital Credits
Cr. 238.1, Patronage Capital Payable
To record the board of directors’ authorization to make payments of capital credits.
Dr. 238.1, Patronage Capital Payable
Cr. 131.1, Cash—General.
To record actual cash payments of capital
credits.
NOTE: To provide better control over the
payment of patronage capital credits, a special checking account should be established
in an amount equal to the authorized general
retirement. Special prenumbered checks
shall be used for each general retirement of
patronage capital.
To strengthen internal control and to facilitate the settlement of estates, the board
should adopt a policy specifying exactly how
payments of capital credits shall be made to
the estates of deceased patrons. Payments
made to estates shall be recorded as follows:
Dr. 201.1, Patronage Capital Credits
Cr. 131.1, Cash—General
To record the payment of capital credits
when an estate is settled by refunding 100
cents on the dollar.
Dr. 201.1, Patronage Capital Credits
Cr. 131.1, Cash—General
Cr. 217, Retired Capital Credits—Gain
To record the payment of capital credits
when an estate is settled for less than
the full amount of capital credited to the
deceased customer’s account.
Dr. 217, Retired Capital Credits—Gain
Cr. 201.2, Patronage Capital Assignable
To record the reallocation to current patrons
of the amount of the discount, if provided for in the bylaws.
If a capital credit check is returned due to
an inability to locate the patron, it shall be
held pending a recheck of available records
to ascertain the correct address of the patron. If it is determined that the patron cannot be located, the check shall be cancelled
and the amount of the check debited to Account 131.1, Cash—General, and credited to
Account 217, Retired Capital Credits—Gain.
If the state, however, has unclaimed property laws to which the amount is subject, the
amount shall be credited to Account 253,
Other Deferred Credits, until final disposition has been made. A notation shall be
made in the records of the former patron to
facilitate payment if his or her whereabouts
is subsequently determined.
If the records show that a number of
former patrons have moved and left no forwarding address, it is not necessary to prepare a capital credit retirement check for
these patrons when a general retirement of
capital credits is made. When setting funds
aside to make a general retirement, however, appropriate amounts shall be included
to cover payments due these patrons. The cooperative shall then make a reasonable effort to locate these patrons through publication of their names in the newsletter or local
newspaper. If the patrons are not located,
the amounts set aside and the credits to
their accounts shall be handled in a manner
similar to those for whom payment checks
are returned.
Under the standard bylaw provisions recommended by RUS, it is not proper to use
capital credits that were assigned to former
patrons to liquidate their delinquent bills.
When the standard bylaws are in effect and
collection efforts have failed, the balance of
an uncollectible bill, after application of customers deposits and membership fees, shall
be charged against the accumulated provision for uncollectible accounts. If the patron
has capital credits assigned to him or her,
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
these remain untouched except for a notation to indicate the amount of the unpaid
bill. When a general retirement of capital
credits is made at some future date, amounts
which would otherwise be due the patron
may be applied to satisfy the unpaid bill
with the balance refunded to him or her.
503
Operating and Nonoperating Margins
Occasionally questions arise concerning
the accounting for the balances in Accounts
218, Capital Gains and Losses; 219.3, Other
Margins; 219.4, Other Margins and EquitiesPrior Periods; 434, Extraordinary Income;
and 435, Extraordinary Deductions. The balance in these accounts shall be accounted for
as follows:
1. The balance in Account 219.4, Other Margins and Equities—Prior Periods, shall be
transferred, at year’s end, to Account 219.1 or
219.2, as appropriate. Accounts 219.1 and 219.2
are then closed to Account 201.2, Patronage
Capital Assignable, unless otherwise provided for in the bylaws.
2. The balances in Account 434, Extraordinary Income, and Account 435, Extraordinary Deductions, shall be cleared to Account 219.2 at year’s end.
3. The balances in Account 219.3, Other
Margins, and Account 218, Capital Gains and
Losses, shall remain in these accounts unless
they are allocated to patrons or used to absorb future losses as provided for in the bylaws of the cooperative.
When a cooperative is engaged in a major
merchandising activity, all costs properly
chargeable to the merchandising activity
shall be allocated as such to offset the associated revenue. Nonoperating margins generated from this source shall be prorated annually on a patronage basis and credited to
those patrons accounts from whom such
amounts were obtained. Merchandising activities of this nature may require a bylaw
provision allowing for the allocation of margins generated by a major merchandising activity separate from other operating or nonoperating margins.
If, at the time of the adoption of the bylaw
provisions for the allocation of nonoperating
margins, there are prior years’ losses resulting in debit balances in Accounts 218, Capital
Gains and Losses; 219.1, Operating Margins;
219.2, Nonoperating Margins; or 219.3, Other
Margins; the credit balances in Accounts 218,
219.2, or 219.3 resulting from prior years’ operations shall be transferred, to the extent
necessary, to offset such deficits. If the
board determines that amounts shall be allocated to prior years’ patrons, the credit balances remaining in these accounts shall be
transferred to Account 201.2, Patronage Capital Assignable.
If there are current year’s losses resulting
in debit balances in either Account 219.1 or
219.2, credit balances in Accounts 219.2, 219.3,
and 218 shall be transferred, to the extent
necessary, to offset such deficits. Remaining
credit balances allocable to patrons shall be
transferred to Account 1.2.
504
Patronage Capital from G&T
Cooperatives
When a cooperative receives capital credits
from a G&T cooperative, the transaction
shall be recorded by a debit to Account 123.1,
Patronage Capital from Associated Cooperatives, and a credit to Account 423, Generation and Transmission Cooperative Capital
Credits. This entry shall be made priorto the
closing of the cooperative’s books even
though, in most cases, the notice of the G&T
allocation is not received until after the
close of the year to which it relates. If precise information cannot be obtained from
the G&T within a reasonable time, capital
credits shall be recorded on an estimated
basis. The difference between the estimated
amount and the actual shall be recognized in
the following year unless the difference is
material.
A distribution cooperative shall not recognize its proportionate share of losses incurred by the G&T. G&T losses shall be accumulated and offset as provided for in the bylaws. Unlike distribution cooperatives, a
G&T has the option to offset accumulated
losses with future operating and/or nonoperating margins.
505
Patronage Capital Furnished by Other
Cooperative Service Organizations
Utilities may obtain long-term and shortterm loans, telephone or data processing
services, or may purchase oil, gasoline, materials, insurance, and various items from
cooperative or mutual enterprises. These enterprises often make patronage refunds or
provide evidence that an amount equal to
such a refund has been credited to the utility
as an investment of capital. The refund may
be in the form of cash in the year following
the purchase or it may be deducted from the
next invoice. The notice of patronage credited to the borrower’s account may indicate
that such capital may be retired at some future date upon certain conditions having
been met. The following provides the accounting journal entries for these types of
transactions:
1. Insurance policy refunds from mutual
companies, in cash or as credits against subsequent purchases, shall be credited to the
appropriate expense account. If sufficient information is not available to credit the refunds to the appropriate expense accounts,
they shall be credited to Account 165, Prepayments, and reduce premiums for the current year.
2. Patronage capital allocations from cooperatives, other than mutual insurance
companies, shall be credited, in the year that
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§ 1767.41
the allocation notice is received, to Account
424, Other Capital Credits and Patronage Allocations, or to construction work-inprogress, as appropriate. The allocation of
patronage capital credits between Account
424 and construction work-in-progress shall
be made on an equitable basis. For example,
patronage capital allocations received from
a cooperative money lender are allocated between Account 424 and construction work-inprogress based upon the ratio of interest
charged to construction for that particular
lender to total interest expense incurred for
that lender. Patronage capital allocations
received from a material supplier are allocated based upon the ratio of materials
charged to construction to total materials
purchased.
3. The face amount of patronage capital
certificates received by the cooperative from
the purchase of goods or services from cooperative money lenders (CFC), oil dealers, material suppliers, pole treating plants, communications services, and others shall be
charged to either Account 123.1, Patronage
Capital from Associated Cooperatives, or Account 124, Other Investments, as appropriate.
Account 123.1 shall include investments in
only those cooperatives, or enterprises, that
are directly related to the electric utility industry and controlled by the electric cooperatives. These include statewide cooperatives, power cooperatives, and NRECA. Other
investments in oil cooperatives and insurance companies shall be charged to Account
124.
506
Forfeited Membership Fees
The bylaws of each cooperative prescribe
certain rules and regulations concerning
membership in the cooperative. Among these
are provisions for forfeiture of membership
fees. Some bylaws provide for application of
membership fees against any unpaid accounts at the time of termination of service.
Any remaining balance may be refunded to
the member. Balances that cannot be refunded to the member due to an inability to
locate the member or due to bylaw restriction, shall be credited to Account 208, Donated Capital, provided they do not escheat
to the state. If disposition of the fees cannot
be determined immediately, the amount involved shall be transferred to Account 253,
Other Deferred Credits, until the determination is made.
601
Employee Benefits
The costs of employees’ fringe benefits
(hospitalization, retirement, holiday, sick
and vacation pay, etc.) shall be accumulated
in an appropriate clearing account and allocated monthly on the basis of payroll. Vacation costs shall be accrued monthly by appropriate credits to an accrual account.
These monthly accruals shall be allocated on
the basis of direct payroll costs to construction, retirement, and the applicable operations, maintenance, and administrative expense accounts.
Sick leave costs are not normally accrued
unless the employee is entitled to be paid for
accumulated sick leave at the termination of
employment. Salary payments and the associated employee pensions and benefits and
social security and other payroll taxes for an
employee who is actually sick shall be
charged to the same account or accounts to
which his or her salary is normally charged.
602
Compensated Absences
Statement of Financial Accounting Standards No. 43, Accounting for Compensated Absences (Statement No. 43), requires employers to accrue a liability as an employee earns
the right to be paid for future absences. Four
criteria were established for this accrual:
1. The employer’s obligation for payment
for future absences is attributable to employees’ services already performed.
2. The obligation relates to employee
rights which vest or accumulate. Vested
rights are considered those for which the employer is obligated to make payment even if
the employee terminates. Rights which accumulate are those earned but unused rights to
compensated absences which may be carried
forward to one or more periods, subsequent
to the period in which they are earned.
3. Payment of the compensation is probable.
4. The amount can be reasonably estimated.
A company’s liability shall be estimated
based upon payments it expects to make as
a result of employees’ work already performed. If a reasonable estimate cannot be
made, the company shall disclose that fact
in the financial statements.
Statement No. 43 does not apply to severance or termination pay, postretirement
benefits, deferred compensation, stock or
stock options, group insurance, or other
long-term fringe benefits.
The entries required to account for the accrual of compensated absences are as follows:
Dr. 435.1, Cumulative Effect on Prior Years
of a Change in Accounting Principle
Cr. 242.3, Accrued Employees’ Vacation and
Holidays
To record the liability for benefits earned in
prior years.
Dr. 107, Construction Work in Progress
Dr. 108.8, Retirement Work in Progress
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Cr. 242.3, Accrued Employees Vacation and
Holidays
To record the liability for benefits earned in
the current period.
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§ 1767.41
603
7 CFR Ch. XVII (1–1–12 Edition)
Employee Retirement and Group
Insurance
Some borrowers have group insurance or
retirement plans or both for their employees.
As a general rule the cost of these programs
is borne partially by the cooperative and
partially by its employees. The cooperative
may pay the full cost in advance and recover
the employee’s share through payroll deductions. The accounting for these transactions
is as follows:
1. The cooperative’s advanced payment of
premiums on insurance and retirement
agreements shall be charged to Account 165,
Prepayments, for the employers portion, and
Account 143, Other Accounts Receivable, for
the employee’s portion.
2. The cost of the employer’s portion of a
retirement and group insurance program
shall be charged to construction and retirement activities and the applicable operations, maintenance, and administrative expense accounts based upon a specific identification with employees’ labor costs charged
therein or, in the absence of specific employee identification, based upon direct
labor dollars or direct labor hours depending
upon which allocation technique provides
the most equitable distribution of costs.
604
Deferred Compensation
Many utilities participate in the NRECA
Deferred Compensation Program. Based upon
the provisions of the program, the following
accounting entries shall be made:
Dr. 186.XX, Miscellaneous Deferred Debits—
Deferred Compensation
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To increase the deferred compensation provision by the amount of the annual deposit
to NRECA’s Deferred Compensation Fund.
Dr. 128, Other Special Funds—Deferred Compensation
Cr. 131.1, Cash—General
To record the annual deposit to NRECA’s Deferred Compensation Fund.
Dr. Construction Work in Progress, Retirement Work in Progress, or the Various Operations, Maintenance, and Administrative
Expense Accounts, as appropriate.
Cr. 186.XX, Miscellaneous Deferred Debits—
Deferred Compensation
To record monthly accrual of deferred compensation.
NOTE: If an employee joins the deferred
compensation program during the year, use
entry #1 to record the additional deposit to
the NRECA Deferred Compensation Fund
and increase the monthly accrual in entry #2
to reflect this deposit.
NRECA provides borrowers that participate in the deferred compensation program
with an annual account statement disclosing
the activity for each Homestead Fund investment including the number of shares
owned, interest income, dividend income,
capital gains/losses, and the value of the
shares owned at statement date. Funds may
be invested in the Short-term Bond Fund,
the Value Fund, the Short-term Government
Securities Fund, and the Daily Income Fund.
Depending upon the Homestead Fund selected, invested funds may earn interest and
dividend income and may experience unrealized holding gains or losses. Based upon the
information provided on the annual statement, the following journal entries shall be
recorded to recognize the increase or decrease in the fund assets:
Dr. 128, Other Special Funds—Deferred Compensation
Cr. 419, Interest and Dividend Income
Cr. 421, Miscellaneous Nonoperating Income
To record an increase in the fund value as of
December 31, 19xx, resulting from interest
and dividend income and from unrecognized holding gains on trading securities.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To record an increase in the liability to the
employee resulting from an increase in the
investment account.
Dr. 426.5, Other Deductions
Cr. 128, Other Special Funds—Deferred Compensation
To record a decrease in fund value as of December 31, 19xx, resulting from unrecognized holding losses on trading securities.
Dr. 228.3, Accumulated Provision for Pensions and Benefits
Cr. Various Operations, Maintenance, and
Administrative Expense Accounts
To record a decrease in the liability to the
employee resulting from a decrease in the
investment account.
Payments made to participating employees because of retirement or separation for
other reasons shall be recorded using the following entries:
Dr. 131.1, Cash—General
Cr. 128, Other Special Funds—Deferred Compensation
To record the receipt of funds from NRECA.
and
Dr. 228.3, Accumulated Provision for Pensions and Benefits
Cr. 131.1, Cash—General
To record payment to employee for deferred
compensation.
If the borrower has elected to bear the
market risk of the funds which guarantee
that the amount of money an employee receives will not be less than the amount of
salary deferred, the following entry shall be
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Rural Utilities Service, USDA
§ 1767.41
recorded if total payment(s) from NRECA
are less than the amount of salary deferred:
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Cr. 131.1, Cash—General
To record payment to employee for deferred
compensation. Payment was made because
amount returned did not equal salary deferred.
Appropriate disclosure of the terms of the
program shall be made in the notes to the financial statements.
605
Life Insurance Premium on Life of a
Borrower Employee
Some borrowers insure the life of the manager and/or key employees with the borrower
being named as the beneficiary. Such arrangements shall be accounted for as follows:
1. Charge Account 426.2, Life Insurance, for
the net amount of the premium paid each
year on the insurance policy.
2. At the anniversary date of the policy
each year, charge Account 124, Other Investments, and credit Account 426.2, Life Insurance, with the amount of the annual increase
in the cash surrender value of the policy;
provided such increase is less than the net
premium paid for that year. If the annual increase in the surrender value exceeds the net
premium paid for the same year, only that
portion of the surrender value increase equal
to the net premium paid shall be credited to
Account 426.2. The remainder is to be credited to Account 419, Interest and Dividend
Income.
3. Upon retirement of the insured employee
and surrender of the insurance policy, charge
Account 131.1, Cash—General, and credit Account 124, Other Investments, for the amount
received from the insurance company. If it is
decided to grant to the retiring insured employee all, or any portion, of the cash received upon surrender of the policy, Account
926, Employee Pensions and Benefits, shall
be charged and Account 131.1 credited for the
amount paid to the retiring employee.
4. If the insured employee dies within his
term of service, charge Account 131.1, Cash—
General, for the face amount of the policy
paid by the insurance company. Credit Account 124, Other Investments, for the cash
surrender value previously charged thereto,
and credit the remainder to Account 421,
Miscellaneous Nonoperating Income.
606
Pension Costs
With the issuance of Statement of Financial Accounting Standards No. 87, Employers’ Accounting for Pensions (Statement No.
87), there have been significant changes in
the accounting and reporting requirements
relating to pension costs. This section will
highlight the accounting and reporting requirements for the major types of pension
plans. It should be noted, however, that the
definitions and accounting procedures outlined in this section relate to financial accounting and they may differ from those
used for tax accounting.
Defined Benefit Pension Plans
A defined benefit pension plan is a plan
that defines an amount of pension benefit to
be provided, usually as a function of one or
more factors such as age, years of service, or
compensation. In a defined benefit plan, the
employer promises to provide, in addition to
current wages, retirement income payments
in future years after the employee retires or
terminates service. Generally, the amount of
benefit to be paid depends upon a number of
future events that are incorporated into the
plan’s benefit formula, after including how
long the employee and any survivors live,
how many years of service the employee renders, and the employee’s compensation in
the years immediately before retirement or
termination.
Under a defined benefit plan, the determination of pension costs, assets, liabilities,
and the disclosures in the financial statements require many calculations and assumptions to be made. This section provides
a general overview of the accounting and reporting requirements associated with a defined benefit pension plan. Consult Statement No. 87 for guidance in making the necessary calculations and assumption.
The accounting and reporting requirements related to a defined benefit pension
plan are as follows:
1. The following components shall be included in the periodic recognition of net pension cost by an employer sponsoring a defined benefit pension plan:
a. The service cost component recognized
in a period shall be determined as the actuarial present value of benefits attributed by
the pension plan formula to employee service during that period. The measurement of
the service cost component requires use of
an attribution method and assumptions.
b. The interest cost component recognized
in a period shall be determined as the increase in the projected benefit obligation due
to the passage of time. Measuring the projected benefit obligation as a present value
requires accrual of an interest cost at rates
equal to the assumed discount rates.
c. For a funded plan, the actual return on
plan assets, if any, shall be determined based
upon the fair value of plan assets at the beginning and the end of the period, adjusted
for contributions and benefit payments.
d. Plan amendments (including initiation
of a plan) often include provisions that grant
increased benefits based upon services rendered in prior period. Because plan amendments are granted with the expectation that
the employer will realize economic benefits
in future period, Statement No. 87 does not
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
require the cost of providing such retroactive benefits (prior service cost) to be included in net periodic pension cost entirely
in the year of the amendment but provides
for recognition during the future service periods of those employees active at the date of
the amendment who are expected to receive
benefits under the plan.
The cost of retroactive benefits (including
benefits that are granted to retirees) is the
increase in the projected benefit obligation
at the date of the amendment. Except as
noted below, prior service cost shall be amortized by assigning an equal amount to each
future period of service of each employee active at the date of the amendments who is
expected to receive benefits under the plan.
If all or almost all of the plan’s participants
are inactive, the cost of retroactive plan
amendments affecting benefits of inactive
participants shall be amortized based upon
the remaining life expectancy of those participants rather than the remaining service
period.
To reduce the complexity and detail of the
computations required, consistent use of an
alternative amortization approach that more
rapidly reduces the unrecognized cost of retroactive amendments is acceptable. For example, a straight-line amortization of the
cost over the average remaining service period of employees expected to receive benefits under the plan is acceptable. The alternative method used shall be disclosed.
In some situations, a history of regular
plan amendments and other evidence may indicate that the period during which the employee expects to realize economic benefits
from an amendment granting retroactive
benefits is shorter than the entire remaining
service period of the active employees. Identification of such situations requires an assessment of the individual circumstances
and the substance of the particular plan situation. In those circumstances, the amortization of prior service cost shall be accelerated
to reflect the more rapid expiration of the
employer’s economic benefits and to recognize the cost in the periods benefited.
A plan amendment can reduce rather than
increase the projected benefit obligation.
Such a reduction shall be used to reduce an
existing unrecognized prior service cost, and
the excess, if any, shall be amortized on the
same basis as the cost of benefit increases.
e. Gains and losses are changes in the
amount of either the projected benefit obligation or plan assets resulting from experience different from that assumed and
changes in assumptions. Gains and losses include amounts that have been realized. Because gains and losses may reflect refinements in estimates as well as real changes in
economic values, and because some gains in
one period may be offset by losses in another
or vice versa, the recognition of gains and
losses as components of net pension cost of
the period in which they arise is not required.
The expected return on plan assets shall be
determined based upon the expected longterm rate of return on plan assets and the
market-related value of plan assets. The
market-related value of plan assets shall be
either fair value or a calculated value that
recognizes changes in fair value in a systematic and rational manner over not more than
5 years. Different ways of calculating market-related value may be used for different
classes of assets but the manner of determining market-related value shall be applied
consistently from year to year for each asset
class.
Asset gains and losses are the differences
between the actual return on assets during a
period and the expected return on assets for
that period. Assets gains and losses include
both changes reflected in the market-related
value of assets and changes not yet reflected
in the market-related value (that is, the difference between the fair value of assets and
the market-related value). Asset gains and
losses not yet reflected in market-related
values are not required to be amortized.
As a minimum, amortization of an unrecognized gain or loss (excluding asset gains
and losses not yet reflected in market-related value) shall be included as a component of net pension cost for a year if, as of
the beginning of the year, that unrecognized
net gain or loss exceeds 10 percent of the
greater of the projected benefit obligation or
the market-related value of plan assets. If
amortization is required, the minimum amortization shall be that excess divided by the
average remaining service period of active
employees expected to receive benefits under
the plan. If all or almost all of a plan’s participants are inactive, the average remaining
life expectancy of the inactive participants
shall be used instead of average remaining
service life.
Any systematic method of amortization of
gains and losses may be used in lieu of the
minimum specified in the previous paragraph provided that the minimum is used in
any period in which the minimum is greater
(i.e., reduces the net balance by more), the
method is applied consistently, the method
is applied similarly to both gains and losses,
and the method is disclosed.
The gain or loss component of net periodic
pension cost shall consist of the difference
between the actual return on plan assets and
the expected return on plan assets and amortization of the unrecognized net gain or loss
from previous periods.
2. A liability (unfunded accrued pension
cost) shall be recognized if the net periodic
pension cost recognized pursuant to Statement No. 87 exceeds amounts the employer
has contributed to the plan. An asset (prepaid pension cost) shall be recognized if the
net periodic pension cost is less than the
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§ 1767.41
amounts the employer has contributed to
the plan.
If the accumulated benefit obligation exceeds the fair value of plan assets, the employer shall recognize a liability (including
unfunded accrued pension cost) that is at
least equal to the unfunded accumulated
benefit obligation. Recognition of an additional minimum liability is required if an
unfunded accumulated benefit obligation exists and an asset has been recognized as a
prepaid pension cost, the liability already
recognized as unfunded accrued pension cost
is less than the unfunded accumulated benefit obligation, or no accrued or prepaid pension cost has been recognized.
If an additional minimum liability is recognized, an equal amount shall be recognized
as an intangible asset, provided that the
asset does not exceed the amount of unrecognized prior service cost. If an additional liability required to be recognized exceeds unrecognized prior service cost, the excess
(which represents a net loss not yet recognized as a net periodic pension cost) shall be
reported as a separate component (reduction)
of equity.
When a new determination of the amount
of additional liability is made to prepare a
balance sheet, the related intangible asset
and separate component of equity shall be
eliminated or adjusted, as necessary.
3. An employer sponsoring a defined benefit pension plan shall disclose the following
information:
a. A description of the plan including employee groups covered, type of benefit formula, funding policy, types of assets held
and significant nonbenefit liabilities, if any,
and the nature and effect of significant matters affecting comparability of information
for all period presented.
b. The amount of net periodic pension cost
for the period showing separately the service
cost component, the interest cost component, the actual return on assets for the period, and the net total of other components.
c. A schedule reconciling the funded status
of the plan with amounts reported in the employer’s balance sheet, showing separately,
the fair value of plan assets, the projected
benefit obligation identifying the accumulated benefit obligation and the vested benefit obligation, the amount of unrecognized
prior service cost, the amount of unrecognized net gain or loss including asset gains
and losses not yet reflected in market-related value), the amount of any remaining
unrecognized net obligation or net asset existing at the date of initial application of
Statement No. 87, the amount of any additional liability recognized, and the amount
of net pension asset or liability recognized in
the balance sheet (which is the net result of
combining the previous six items).
d. The weighted-average assumed discount
rate and rate of compensation increase (if
applicable) used to measure the projected
benefit obligation and the weighted-average
expected long-term rate of return on plan assets.
e. If applicable, the amount and type of securities of the employer and related parties
included in plan assets, and the approximate
amount of annual benefits of employees and
retirees covered by annuity contracts issued
by the employer and related parties. Also, if
applicable, the alternative amortization periods used.
f. An employer that sponsors two or more
separate defined benefit pension plans shall
determine net periodic pension cost, liabilities, and assets by separately applying the
provisions of Statement No. 87 to each plan.
In particular, unless an employer clearly has
a right to use the assets of one plan to pay
benefits of another, a liability required to be
recognized for one plan shall not be reduced
or eliminated because another plan has assets in excess of its accumulated benefit obligation or because the employer has prepaid
pension cost related to another plan.
The required disclosures may be aggregated for all of an employer’s single-employer defined benefit plans, or plans may be
disaggregated into groups so as to provide
the most useful information. Plans with assets in excess of the accumulated benefit obligation, however, shall not be aggregated
with plans that have accumulated benefit obligations that exceed plan assets.
Annuity Contracts
An annuity contract is a contract in which
an insurance company unconditionally undertakes a legal obligation to provide specified benefits to specific individuals in return
for a fixed consideration or premium. An annuity contract is irrevocable and involves
the transfer of significant risk from the employer to the insurance company. Some annuity contracts (participating annuity contracts) provide that the purchaser (either the
plan or the employer) may participate in the
experience of the insurance company. Under
these contracts, the insurance company ordinarily pays dividends to the purchaser. If the
substance of a participating contract is such
that the employer remains subject to all or
most of the risks and rewards associated
with the benefit obligation covered and the
assets transferred to the insurance company,
that contract is not an annuity contract for
purposes of Statement No. 87.
To the extent that benefits currently
earned are covered by annuity contracts, the
cost of these benefits shall be the cost of purchasing the contracts, except as noted below.
That is, if all benefits attributed by the
plan’s benefits formula to service in the current period are covered by nonparticipating
annuity contracts, the cost of the contracts
determines the service cost component of
net pension cost for that period.
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Benefits provided by the pension benefit
formula beyond benefits provided by annuity
contracts (for example, benefits related to
future compensation levels) shall be accounted for according to the provisions applicable to plans not involving insurance
contracts.
Benefits covered by annuity contracts
shall be excluded from the projected benefit
obligation and the accumulated benefit obligation. Except as noted below, annuity contracts shall be excluded from plan assets.
Some annuity contracts provide that the
purchaser (either the plan or the employer)
may participate in the experience of the insurance company. Under these contracts, the
insurance company ordinarily pays dividends
to the purchaser, the effect of which is to reduce the cost of the plan. The purchase price
of a participating annuity contract ordinarily is higher than the price of an equivalent contract without participation rights.
The cost of the participation right shall be
recognized, at the date of purchase, as an
asset. In subsequent periods, the participation right shall be measured at its fair value
if the contract is such that the fair value is
reasonably estimable. Otherwise, the participation right shall be measured at its amortized cost (not in excess of its net realizable
value), and the cost shall be amortized systematically over the expected dividend period under the contract.
Other Contracts with Insurance Companies
Insurance contracts that are, in substance,
equivalent to the purchase of annuities shall
be accounted for as such. Other contracts
with insurance companies shall be accounted
for as investments and measured at fair
value. For some contracts, the best available
evidence of fair value may be contract value.
If a contract has a determinable cash surrender value or conversion value, that is presumed to be its fair value.
Defined Contribution Plans
A defined contribution pension plan is a
plan that provides pension benefits in return
for services rendered, provides an individual
account for each participant, and has terms
that specify how contributions to the individual’s accounts are to be determined rather than the amount of pension benefits the
individual is to receive. Under a defined contribution plan, the pension benefits a participant will receive depend only upon the
amount contributed to the participant’s account, the returns earned on investments of
those contributions, and forfeitures of other
participants’ benefits that may be allocated
to the participant’s account.
To the extent that a plan’s defined contributions to an individual’s account are to
be made for periods in which that individual
renders services, the net pension cost for a
period shall be the contribution called for in
that period. If a plan calls for contributions
for periods after an individual retires or terminates, the estimated cost shall be accrued
during the employee’s service period.
An employer that sponsors one or more defined contribution plans shall disclose the
following separately from its defined benefit
plan disclosures:
1. A description of the plan(s) including
employee groups covered, the basis for determining contributions, and the nature and effect of significant matters affecting comparability of information for all periods presented.
2. The amount of cost recognized during
the period.
A pension plan having characteristics of
both a defined benefit plan and a defined
contribution plan requires careful analysis.
If the substance of the plan is to provide a
defined benefit, as may be the case with
some ‘‘target benefit’’ plans, the accounting
and disclosure requirements shall be determined in accordance with the provisions applicable to a defined benefit plan.
Multiemployer Plans
A multiemployer plan is a pension plan to
which two or more unrelated employers contribute, usually pursuant to one or more collective-bargaining agreements. A characteristic of multiemployer plans is that assets contributed by one participating employer may be used to provide benefits to
employees of other participating employers
since assets contributed by an employer are
not segregated in a separate account or restricted to provide benefits only to employees of that employer.
An employer participating in a multiemployer plan shall recognize as net pension
cost, the required contribution for the period
and shall recognize as a liability, any contributions due and unpaid. The required contribution includes both current costs and
prior service costs. If an employer elects to
fund prior service cost in full at the inception of the plan, the total payment becomes
the employer’s required contribution, and
accordingly, its pension cost for the period.
The following provisions are applicable to
RUS borrowers participating in a multiemployer pension plan:
1. An electric utility participating in a
multiemployer plan may defer current period pension expenses if the provisions of
Statement of Financial Accounting Standards No. 71 (Statement No. 71), Accounting
for the Effects of Certain Types of Regulation, are applied.
Under the provisions of Statement No. 71,
pension costs may be deferred provided such
costs are recovered through future rates.
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§ 1767.41
2. An electric utility instituting an amendment to the NRECA Retirement and Security plan enters into a contractual agreement to pay the costs incurred (prior service
pension costs) for the amendment. In such
cases, the agreement is noncancelable and
payable regardless of continued participation in the plan.
Since the utility is unconditionally committed to making these payments and such
payments are not contingent upon the utility’s continued participation in the plan, the
recognition of that liability is appropriate.
The costs associated with this liability shall
be expensed, in their entirety, when the liability is recognized.
The accounting journal entries required to
record the transactions associated with a
multiemployer pension plan are as follows:
Sample 1—Current Pension Expense
The journal entry required to record the
normal costs associated with the NRECA Retirement and Security Program is as follows:
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 131.1, Cash—General
To record the payment of pension costs to
NRECA.
NOTE: This entry shall not be recorded during the moratorium.
Sample 2—Prior Service Pension Expense
The journal entries required to record the
prior service costs associated with the
NRECA Retirement and Security Program
are as follows:
1. If the RUS borrower elects to pay the
prior service pension costs in full, and there
is no deferral of costs under the provision of
Statement No. 71, the following entry shall
be recorded:
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 131.1, Cash—General
To record the payment of prior service pension costs to NRECA.
2. If the RUS borrower elects to finance
prior service pension costs over a period of
years and there is no deferral of costs under
the provisions of Statement No. 71, the following entries shall be recorded:
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 224, Other Long-Term Debt
To record the liability to NRECA for prior
service pension costs.
Dr. 224, Other Long-Term Debt
Dr. 427, Interest on Long-Term Debt
Cr. 131.1, Cash—General
To record the annual payment to NRECA for
prior service pension costs.
3. If the RUS borrower elects to finance
prior service pension costs over a period of
years and such costs are being deferred and
amortized in accordance with the provisions
of Statement No. 71, the following entries
shall be recorded:
Dr. 182.3, Other Regulatory Assets
Cr. 224, Other Long-Term Debt
To record the liability to NRECA for prior
service pension costs.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 182.3, Other Regulatory Assets
To record the amortization of deferred prior
service pension costs.
Dr. 224, Other Long-Term Debt
Dr. 427, Interest on Long-Term Debt
Cr. 131.1, Cash—General
To record the annual payment to NRECA for
prior service pension costs.
4. If the RUS borrower elects to pay the
prior service pension costs in full and such
costs are being deferred and amortized in accordance with the provisions of Statement
No. 71, the following entries shall be recorded:
Dr. 182.3, Other Regulatory Assets
Cr. 131.1, Cash—General
To record the payment to NRECA for prior
service pension costs.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 182.3, Other Regulatory Assets
To record the amortization of deferred prior
service pension costs.
It should be noted that although the above
entries relate specifically to the NRECA Retirement and Security Program, they are applicable to all multiemployer pension plans.
An employer that participates in one or
more multiemployer plans shall disclose the
following separately from disclosures for a
single-employer plan:
1. A description of the multiemployer
plan(s) including the employee groups covered, the type of benefits provided (defined
benefit or defined contribution), and the nature and effect of significant matters affecting comparability of information for all periods presented.
2. The amount of cost recognized during
the period.
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Multiple-Employer Plans
A multiple-employer plan is, in substance,
aggregations of single-employer plans combined to pool their assets for investment purposes to reduce the cost of plan administration. Under a multiple-employer plan, assets
are segregated and specifically identified to
an employer. In addition, such plans may
have features that allow participating employers to have different benefit formulas.
Such plans shall be considered single-employer plans for financial accounting purposes and each employer’s accounting shall
be based upon its respective interest in the
plan.
607
Unproductive Time
Lost time relating to construction, operations and maintenance shall be allocated on
the basis of direct payroll costs to the appropriate construction, operations or maintenance accounts in the month incurred. Lost
time is defined as time on duty during which
productive work is not performed due to inclement weather conditions, material shortages, machine repairs, or other reasons.
If lost time attributable to construction
has a material effect on the construction accounts in any one month, these costs shall
be deferred and distributed over a reasonable
period of time by means of a predetermined
percentage based upon direct labor.
608
Training Costs, Attendance at Meetings,
Etc.
Utilities engage in many types of training
programs. Seminars are conducted for directors, managers, office managers, attorneys,
engineers, and others. Bookkeepers and office managers attend accountants’ meetings.
Safety engineers attend safety schools and
subsequently conduct regular safety meetings at the cooperative. Costs incurred for
the various types of training activities shall
be accounted for as follows:
1. Managers’ and directors’ expenses to attend the NRECA national and state conventions shall be charged to Account 930.2, Miscellaneous General Expenses.
2. Management or engineering seminar
fees, salary time attending such seminars including the associated pensions and benefits
expense and payroll taxes, and the related
per diem and expenses shall be charged to
the functional expense accounts. Salaries
paid to employees shall also be charged to
the appropriate functional expense account.
Fees and expenses for directors’ attendance
shall be charged to Account 930.2, Miscellaneous General Expenses.
3. When the office manager, bookkeeper, or
work order clerk attends a state or regional
accounting meeting, their salary time and
the associated employee pensions and benefits and social security and other payroll
taxes shall be charged to the account to
which the employees’ time is ordinarily
charged.
4. Employees’ salary time employee and
the associated pensions and benefits and social security and other payroll taxes spent
attending regular safety meetings conducted
by the cooperative shall be charged to the
account to which the employees’ time is ordinarily charged.
5. A safety engineer’s salary time and the
associated employee pensions and benefits
and social security and other payroll taxes
spent attending a statewide safety school
shall be charged to Account 925, Injuries and
Damages.
6. The salary time and the associated employee pensions and benefits and social security and other payroll taxes spent by a manager or line foreman conducting weekly safely meetings shall be charged to the appropriate functional expense accounts including
Account 590, Maintenance, Supervision and
Engineering, and Account 920, Administrative and General Services.
609
Maintenance and Operations
‘‘Operations’’ is the general term used to
describe activities involved in the delivery of
electric service, by means of a distribution
system, to the end user. It pertains to the
use of the utility’s electric plant facilities
and does not include activities intended to
prevent or remedy an impending or actual
breakdown of those facilities. These activities are classified as maintenance.
‘‘Maintenance’’ is the general term used to
describe the activities involved in the upkeep and repair, but not the enlargement or
improvement, of property owned or leased
and operated by the company. It does not include the replacement of retirement units.
610
Financial Forecast
Costs incurred and salaries paid to perform
a 10-year financial forecast shall be charged
to Account 920, Administrative and General
Salaries. Related office supplies and expenses shall be charged to Account 921, Office Supplies and Expenses. When a forecast
is performed by an outside consultant, the
cost shall be charged to Account 923, Outside
Services Employed.
611
Advertising Expense
The cost of advertising and the cost of informing the public about the electric cooperative’s activities shall be charged to Account 930.2, Miscellaneous General Expenses.
Most of a cooperative’s advertising is instructional in nature and relates the cooperative’s history and current activities.
This type of advertising activity should not
be confused with that directed towards the
enactment of a specific law or laws directed
toward obtaining a specific decision from a
regulatory body. Political advertising of the
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§ 1767.41
type defined above shall be charged to Account 426.4, Expenditures for Certain Civic,
Political, and Related Activities.
612
Special Power Cost Study
A special power cost study is defined as a
study to determine whether sufficient power
will be available in the future. If additional
power or power sources are needed, the study
determines whether generation or purchase
will supply the lesser cost. The study also indicates when additional power will be needed. As costs are incurred, they shall be
charged to a subaccount of Account 186, Miscellaneous Deferred Debits. Upon completion
of the study, the costs shall be charged to
Account 557, Other Expenses, or amortized to
Account 557 over a period of time not to exceed 5 years.
613
Mapping Costs
The purpose of posting completed work orders to system maps is to improve the operation of the system. These costs shall, therefore, be charged to Account 588, Miscellaneous Distribution Expenses. However, the
cost of system mapping in the planning stage
of construction is an acceptable overhead
cost of the resulting construction.
614
Member Relations Costs
Many electric cooperatives hire employees
whose duties concern a mixture of power use
and member relations activities. The salaries for these employees shall be charged to
Account 930.2, Miscellaneous General Expenses, except as provided below:
1. Account 912, Demonstrating and Selling
Expenses, shall be charged with all labor,
material, advertising, and other expenses incurred in promotional, demonstrating, and
selling activities; the objective of which is to
promote or retain the use of utility services
by present or prospective customers.
2. Account 930.1, General Advertising Expenses, shall be charged with labor, material,
and other expenses incurred in advertising
and related activities, the cost of which by
their content and purpose, are not provided
for elsewhere.
3. Account 416, Costs and Expenses of Merchandising, Jobbing, and Contract Work,
shall be charged with all costs specifically
related to merchandising activities when the
utility is engaged in a major merchandising
program.
4. Account 426.4, Expenditures for Certain
Civic, Political, and Related Activities, shall
be charged with expenditures for the purpose
of influencing public opinion with respect to
the election or appointment of public officials, referenda, legislation, or ordinances
(either with respect to the possible adoption
of new referenda, legislation or ordinances or
repeal or modification of existing referenda,
legislation or ordinances); or approval, modi-
fication, or revocation of franchises; or for
the purpose of influencing the decisions of
public officials. Account 426.4 shall not include expenditures which are directly related
to appearances before regulatory or other
governmental bodies in connection with the
borrower’s existing or proposed operations.
615
Statewide Fees
Additional fees collected by a statewide association from its members for construction
of a statewide building shall be charged to
Account 930.2, Miscellaneous General Expenses. Any amounts that are to be repaid by
the state association shall be charged to Account 143, Other Accounts Receivable, or Account 123.23, Other Investments in Associated Organizations, depending upon the
terms of the repayment.
616
Power Supply/Distribution Cooperative
Borrowings
When a power supply cooperative borrows
money from a distribution cooperative as the
result of a long-term loan agreement, the
money shall be recorded on the books of the
power supply cooperative as general funds
unless restricted to a specific purpose. If restricted, the funds shall be recorded in Account 128, Other Special Funds. The resulting liability shall be recorded in Account 224,
Other Long-Term Debt.
The transaction shall be charged to Account 123.23, Other Investments in Associated Organizations, on the books of the distribution cooperative.
617 Rate Discount Allowed by the Power
Cooperative to Distribution Cooperatives
Owning Connecting Transmission Lines
A distribution cooperative purchases power
from a power cooperative. The distribution
cooperative owns and operates the transmission line between the power cooperative’s
facilities and the distribution facilities. Because of this, power is sold at the standard
rate at which the power cooperative sells to
other distribution cooperatives who do not
own their transmission lines, less a discount.
The discount or reduction in rate is based
upon the distribution cooperative’s expense
in operating and maintaining its transmission facilities. The contract between the
power cooperative and the distribution cooperative must specifically state that the
member shall receive a reduced rate or discount from the seller’s rate to other member
cooperatives.
Under this type of arrangement, the distribution cooperative shall record the cost of
purchased power by charging the net amount
to Account 555, Purchased Power.
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§ 1767.41
618
7 CFR Ch. XVII (1–1–12 Edition)
Theft Losses not Covered by Insurance
Utilities may suffer losses as a result of
thefts of cash, materials and supplies, equipment, or electric plant-in-service that is not
covered by insurance. The charges for nominal uninsured losses shall be recorded in the
following accounts:
1. Cash—Account 924, Property Insurance,
shall be charged.
2. Plant materials and operating supplies—
Account 163, Stores Expense Undistributed,
shall be charged.
3. Equipment—Account 163, Stores Expense
Undistributed, shall be charged for stores
equipment; and Account 184, Transportation
Expense—Clearing, for transportation and
garage equipment. The appropriate miscellaneous operations or administrative expense
account (Account 506, 524, 539, 549, 566, 588,
905, 910, 916, or 930.2, as appropriate) shall be
charged for all other equipment.
4. Electric Plant-in-Service—A retirement
work order shall be prepared for electric
plant constituting a unit of property. The
loss due to retirement shall be charged to
Account 108.6, Accumulated Provision for
Depreciation of Distribution Plant. If the
plant does not constitute a retirement unit,
the loss shall be charged to the appropriate
maintenance expense account.
619
Self Billing
To maintain the books of accounts on an
accrual basis, bills for customers who self
bill and have not sent in a reading or remittance, shall be estimated. A journal entry
shall be made to record the estimated revenue and kWh sold by debiting accounts receivable and crediting the appropriate revenue accounts. The estimated bill shall be
posted to the customer’s account and identified by an appropriate symbol indicating
that it is an estimate. Reconciliation with
the general ledger control is made in the
usual manner.
620
Account 163, Stores Expense Undistributed.
If the rebate is based upon appliances and
equipment held for merchandising or contract work, the credit shall be spread over
the items in Account 155, Merchandise. To
avoid materially distorting the cost of the
remaining appliances, if a portion of the
items upon which the rebate was based are
no longer in stock, a portion of the credit
shall be prorated to Account 416, Cost and
Expenses of Merchandising, Jobbing, and
Contract Work, on the basis of the number of
items sold to the quantity remaining in
stock.
If the rebate is in the form of a travel
package or travel arrangements, the value of
the rebate shall be estimated and recorded as
a reduction of the cost of the material or appliances upon which it was based in a manner similar to that of the cash rebates discussed above. The beneficiary of the travel
or travel allowance shall be designated by or
in accordance with policy established by the
board of directors. The contra charge to the
reduction in cost shall be to an appropriate
account depending upon the relationship of
the recipient to the cooperative. For employees, this shall be Account 926, Employee Pensions and Benefits; for directors or patrons,
Account 930.2, Miscellaneous General Expenses.
Purchase Rebates
Some vendors from which electric cooperatives purchase plant materials and supplies
and merchandise for resale are making purchase rebates based upon the quantity or
dollar volume of purchases. These ‘‘quantity
discounts’’ may be in the form of cash or
credit memoranda, in the form of prepaid
package travel arrangements, or a combination of such methods. The rebate shall be accounted for as a reduction in the cost of the
material or appliances upon which it was
based.
In some instances, the rebate may be for
material or appliances that are no longer in
stock or cannot be identified. If the rebate is
based upon the purchase of plant materials
and operating supplies that are normally
charged to Account 154, Plant Materials and
Operating Supplies, a credit shall be made to
621
Integrity Fund
The CFC Integrity Fund was established to
assist borrowers in their attempts to stop
takeover bids by investor-owned utilities. A
borrower makes a contribution to the Integrity Fund in the form of cash or patronage
capital refunds. CFC retains the contribution
for a 5-year period during which time the
borrower earns interest on the balance in its
account. Each year, the borrower receives a
statement indicating (both for the total fund
and the individual borrower’s share) the
amount contributed, interest earned, disbursements made, and the ending balance.
The disbursements from the fund are allocated to each contributing borrower’s account based upon their individual account
balances. At the end of the 5-year period, the
balance in the account, if any, is refunded to
the contributing borrower.
Since the contributing borrower will receive a refund only if its funds are not totally disbursed, the contribution shall be
charged to expense in Account 426.1, Donations. If any part of the contribution is returned at the end of the 5-year period, the refund shall be credited to Account 421, Miscellaneous Nonoperating Income.
622
In-Substance Defeasance
An in-substance defeasance has been defined as the process whereby a debtor irrevocably places cash or other assets in a trust
to be used solely for the purpose of satisfying
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§ 1767.41
scheduled payments of both principal and interest related to a specific debt obligation.
Under the structural arrangements of an insubstance defeasance, the probability that
the debtor will be required to make additional future debt payments is remote. In
these specific circumstances, debt has been
determined to be extinguished even though
the debtor has not been legally released from
his obligations under the debt instrument.
The trust established in a defeasance
transaction is restricted as to the nature of
the assets held. The trust must be funded
with monetary assets that are essentially
risk free as to the amount, timing, and collection of interest and principal. For debt denominated in United States dollars, ‘‘risk
free’’ assets are limited to:
1. Direct obligations of the United States
government;
2. Obligations guaranteed by the United
States government; and
3. Securities that are backed by United
States government obligations as collateral
under an arrangement by which the interest
and principal payments on the collateral,
flow immediately through to the holder of
the security.
The monetary assets of the trust must provide cash flows sufficient to coincide with
the scheduled interest and principal payments on the defeased debt. If the trust is expected to pay the costs associated with the
defeasance, such as trustee fees, these costs
must be considered in determining the
amount of funds required by the trust.
The principles of in-substance defeasance
apply only to debt with specific maturities
and fixed payment schedules and, as such, do
not apply to debt with variable terms in
which advance determination of debt service
requirements is not possible.
Generally accepted accounting principles
(GAAP) address the extinguishment of debt
in Accounting Principles Board Opinion No.
26, and Statement of Financial Accounting
Standard No. 76, Extinguishment of Debt. In
accordance with these two statements, debt
which has been defeased remains recorded in
the regulated books of account as do the assets placed in the irrevocable trust. They are
not, however, recognized as an asset and liability for financial reporting purposes. The
transaction, including the total amount of
debt outstanding and the total amount of
debt that is considered extinguished at the
end of the period, must be disclosed in the
footnotes to the financial statements as long
as the debt remains outstanding.
Debt is frequently extinguished before its
scheduled maturity. Debt may be extinguished by the use of the borrower’s general
funds, or by the reacquisition of another
debt issue at a different interest rate or
varying terms. As these assets are expected
to be revenue producing during those years,
both the assets and the revenue they generate may be utilized to meet maturing debt
payments. Therefore, in most instances, the
dollar value of the assets initially placed in
the trust do not equal the dollar value of the
outstanding principal balance. The difference represents an ‘‘economic ’’ gain or
loss to the borrower.
To provide consistency in reporting among
all RUS borrowers, any gain or loss that is
recognized for financial statement purposes
should be reported in accordance with the
provisions of General Instruction No. 17 of
this part. Therefore, the gain or loss should
be amortized (for reporting purposes) in
equal monthly amounts over the remaining
life of the original debt issue or the remaining life of the new issue. The gain or loss
may be reported in the current period only
in those instances in which it is immaterial
to the financial statements.
The RUS Form 7, Financial and Statistical
Report, and the RUS Form 12, Operating Report—Financial, must, however, reflect the
actual amounts recorded in the books and
records of the borrower.
623
Satellite or Cable Television Services
Many electric borrowers have become involved in either providing satellite or cable
television services or obtaining satellite or
cable television services for their own use.
This section outlines the accounting to be
followed when recording transactions involving satellite or cable television services.
1. Separate Subsidiary
If a borrower provides satellite or cable
television services through a separate subsidiary, the investment in the subsidiary
shall be recorded in Account 123.11, Investment in Subsidiary Companies. The net income or loss of the subsidiary shall be debited or credited to Account 123.11, as appropriate, with an offsetting entry to Account
418.1, Equity in Earnings of Subsidiary Companies.
2. Segment of Current Operations
If a borrower provides satellite or cable
television services as part of its normal operations, the investment in satellite or cable
television equipment shall be recorded in Account 121, Nonutility Property. All income
associated with these services shall be recorded in Account 417, Revenues from Nonutility Operations, and the associated expenses shall be charged to Account 417.1, Expenses of Nonutility Operations.
3. Sale and Installation of Satellite or Cable
Television Equipment
If a borrower sells or installs satellite or
cable television equipment, the equipment
purchased for resale shall be recorded in Account 156, Other Materials and Supplies,
until sold. The revenues generated from such
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
sales or installations shall be recorded in Account 415, Revenues from Merchandising,
Jobbing, and Contract Work, and the associated expenses shall be charged to Account
416, Costs and Expenses of Merchandising,
Jobbing, and Contract Work.
4. Equipment Purchased for Own Use
If a borrower purchases satellite or cable
television equipment for its own use, the investment in the equipment shall be recorded
in Account 397, Communication Equipment.
624
Cr. 107, Construction Work-in-Progress
To record earnings from investments made
by the trustee.
Dr. 221.XX, Long-Term Debt—Pollution Control Bonds—Trustee
Cr. 171, Interest and Dividends Receivable
To record receipt of interest income by the
trustee account.
Dr. XXX, Various Plant Accounts
Cr. 107, Construction Work-in-Progress
To close completed construction to the primary plant accounts.
Pollution Control Bonds
625
The construction and installation of pollution control facilities are often financed by
issuing tax exempt municipal securities. The
funds generated from the sale of these securities are deposited into an account that is
controlled by a designated trustee. The funds
under the control of the trustee are usually
invested, earning interest, until they are
needed.
Interest expense accrued on the pollution
control bonds during the construction period
shall be capitalized in Account 107, Construction Work-in-Progress. After construction is
complete, all subsequent accruals of interest
expense shall be charged to Account 427, Interest on Long-Term Debt.
Interest income earned during the construction period shall be recorded as a debit
to Account 171, Interest and Dividends Receivable, and a credit to Account 107, Construction Work-in-Progress. Upon notification of receipt of the interest in the trustee
account, Account 221.XX, Long-Term Debt—
Pollution Control Bonds, shall be debited
and Account 171, Interest and Dividends Receivable shall be credited. Upon completion
of construction, Account 419, Interest and
Dividend Income, shall be credited for the
amount of interest income earned during the
period.
The entries required to account for the
transactions associated with the issuance of
pollution control bonds are as follows:
Dr. 221.XX, Long-Term Debt—Pollution Control Bonds—Trustee
Cr. Account 221.X1, Long-Term Debt—Pollution Control Bonds
To record the sale of pollution control bonds.
Dr. 107, Construction Work-in-Progress
Cr. 232, Accounts Payable
To record costs incurred in construction of
pollution control facilities.
Dr. 131.1, Cash—General Funds
Cr. 221.XX, Long-Term Debt—Pollution
Control Bonds—Trustee
To record the transfer of funds from the
trustee.
Dr. 107, Construction Work-in-Progress
Cr. 221.XX, Long-Term Debt—Pollution
Control Bonds—Trustee
To record interest expense on pollution control bonds.
Dr. 171, Interest and Dividends Receivable
Prepayment of Debt
Many RUS borrowers have decided to redeem (prepay) their issues of long-term debt.
As a result of this redemption, the borrower
may incur a gain (discount) or a loss (penalty) on the early extinguishment of debt.
The accounting for this gain or loss is highlighted in this section.
If debt is redeemed without refunding (paid
with general funds), the gain or loss incurred
shall
be
recorded
in
Account
189,
Unamortized Loss on Reacquired Debt, or
Account 257, Unamortized Gain on Reacquired Debt, as appropriate. The borrower
shall amortize the recorded deferral on a
monthly basis over the remaining life of the
old debt issue. Amounts so amortized shall
be charged to Account 428.1, Amortization of
Loss on Reacquired Debt, or credited to Account 429.1, Amortization of Gain on Reacquired Debt—Credit, as appropriate.
If the debt is redeemed with refunding (refinanced), the gain or loss incurred shall be
recorded in Account 189 or Account 257, as
appropriate. The borrower may elect to account for the deferrals as follows:
1. Write them off immediately when the
amounts are insignificant;
2. Amortize them by equal monthly
amounts over the remaining life of the old
debt issue; or
3. Amortize them by equal monthly
amounts over the life of the new debt issue.
Once an election has been made, it shall be
applied on a consistent basis. Regardless of
the option selected, the amortization shall
be charged to either Account 428.1 or 429.1, as
appropriate.
Where a regulatory authority having jurisdiction over the borrower specifically disallows the rate principle of amortizing gains
or losses on the redemption of long-term
debt without refunding, and does not apply
the gain or loss to interest charges in computing the borrower’s rates, the alternative
method may be used to account for gains or
losses relating to the redemption of longterm debt with or without refunding. The alternative method requires that gains or
losses be recorded in Account 421, Miscellaneous Nonoperating Income, or Account
426.5, Other Deductions, as incurred. When
the alternative method is used, the borrower
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§ 1767.41
shall include a footnote to the financial
statements stating the reason for using this
method and its treatment for rate making
purposes.
626
Rural Economic Development Loan and
Grant Program
On December 21, 1987, Section 313, Cushion
of Credits Payments Program, was added to
the Rural Electrification Act. Section 313 establishes a Rural Economic Development
Subaccount and authorizes the Administrator of the Rural Utilities Service to provide zero interest loans or grants to RE Act
borrowers for the purpose of promoting rural
economic development and job creation
projects.
Subpart B, Rural Economic Development
Loan and Grant Program, 7 CFR Part 1703,
sets forth the policies and procedures relating to the zero interest loan program and for
approving and administering grants. The accounting journal entries required to record
the transactions associated with a rural economic development loan are as follows:
Dr. 224.17, RUS Notes Executed—Economic
Development—Debit
Cr. 224.16, Long-Term Debt—RUS Economic Development Notes Executed
To record the contractual obligation to
RUS for the Economic Development Notes.
Dr. 131.12, Cash—General—Economic Development Funds
Cr. 224.17, RUS Notes Executed—Economic
Development—Debit
To record the receipt of the economic development loan funds.
Dr. 123, Investment in Associated Organizations or
Dr. 124, Other Investments
Cr. 131.12, Cash—General—Economic Development Funds
To record the disbursement of Economic
development loan funds to the project.
Dr. 131.1, Cash—General Funds
Cr. 421, Miscellaneous Nonoperating Income
To record payment received from the
project for loan servicing charges.
Dr. 171, Interest and Dividends Receivable
Cr. 419, Interest and Dividend Income
To record the interest earned on the investment of rural economic development
loan funds.
Dr. 426.1, Donations or
Dr. 426.5, Other Deductions
Cr. 131.1, Cash—General Funds
To record the payment of interest earned
in excess of $500.00 on the investment of
rural economic development loan funds.
NOTE: Interest earned in excess of $500.00
must be used for the rural economic develop-
ment project for which the loan funds were
received or returned to RUS.
Dr. 131.12, Cash—General—Economic Development Funds
Cr. 123, Investment in Associated Organizations or
Cr. 124, Other Investments
To record receipt of the repayment, by the
project, of economic development loan funds.
Dr. 426.5, Other Deductions
Cr. 123, Investment in Associated Organizations or
Cr. 124, Other Investments
To record the default, by a project, of economic development loan funds.
Dr. 224.16, Long-Term Debt—RUS Economic
Development Notes Executed
Cr. 131.12, Cash—General—Economic Development Funds
To record the repayment, to RUS, of the
economic development loan funds.
The accounting journal entries required to
record the transactions associated with a
rural economic development grant are as follows:
Dr. 131.13, Cash—General—Economic Development Grant Funds
Cr. 224.18, Other Long-Term Debt—Grant
Funds;
Cr. 208, Donated Capital; or
Cr. 421, Miscellaneous Nonoperating Income
To record grant funds disbursed by RUS. If
the grant agreement requires repayment of
the funds upon termination of the revolving
loan program, Account 224.18 should be credited. If the grant agreement states that
there is absolutely no obligation for repayment upon termination of the revolving loan
program, the funds should be accounted for
as a permanent infusion of capital by crediting Account 208. If, however, the grant
agreement is silent as to the final disposition of the grant funds, Account 421 should
be credited.
Dr. 123.3, Investment in Associated Organizations—Federal Economic Development
Loans
Cr. 131.13, Cash—General—Economic Development Grant Funds
To record advances of Federal funds to associated organizations for authorized rural
economic development projects.
Dr. 124.1, Other Investments—Federal Economic Development Loans
Cr. 131.13, Cash—General—Economic Development Grant Funds
To record advances of Federal funds to
nonassociated organizations for authorized
rural economic development projects.
Dr. 171, Interest and Dividends Receivable
Cr. 419, Interest and Dividend Income
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
To record the accrual of interest on loans
made to associated and nonassociated organizations with Federal funds for authorized
rural economic development projects.
Dr. 131.14, Cash—General—Economic Development Non-Federal Revolving Funds
Cr. 123.3, Investment in Associated Organizations—Federal Economic Development
Loans or
Cr. 124.1, Other Investments—Federal Economic Development Loans
To record repayment of loans made with
Federal funds.
Dr. 123.4, Investment in Associated Organizations—Non-Federal Economic Development Loans
Cr. 131.14, Cash—General—Economic Development Non-Federal Revolving Funds
To record advances of non-Federal funds to
associated organizations for authorized rural
economic development projects.
Dr. 124.2, Other Investments—Non-Federal
Economic Development Loans
Cr. 131.14, Cash—General—Economic Development Non-Federal Revolving Funds
To record advances of non-Federal funds to
nonassociated organizations for authorized
rural economic development projects.
Dr. 171, Interest and Dividends Receivable
Cr. 419, Interest and Dividend Income
To record the accrual of interest on loans
made to associated and nonassociated organizations with non-Federal funds for authorized rural economic development projects.
Dr. 131.14, Cash—General—Economic Development Non-Federal Revolving Funds
Cr. 123.4, Investment in Associated Organizations—Non-Federal Economic Development Loans or
Cr. 124.2, Other Investments—Non-Federal
Economic Development Loans
To record repayment of loans made with
non-Federal funds.
627
Postretirement Benefits
Statement of Financial Accounting Standards No. 106, Employers’ Accounting for
Postretirement Benefits Other than Pensions
(Statement No. 106), requires reporting entities to accrue the expected cost of postretirement benefits during the years the employee
provides service to the entity. For purposes
of applying the provisions of Statement No.
106, members of the board of directors are
considered to be employees of the cooperative. Prior to the issuance of Statement No.
106, most reporting entities accounted for
postretirement benefit costs on a ‘‘pay-asyou-go’’ basis; that is, costs were recognized
when paid, not when the employee provided
service to the entity in exchange for the benefits.
As defined in Statement No. 106, a postretirement benefit plan is a deferred com-
pensation arrangement in which an employer
promises to exchange future benefits for an
employee’s current services. Postretirement
benefit plans may be funded or unfunded.
Postretirement benefits include, but are not
limited to, health care, life insurance, tuition assistance, day care, legal services, and
housing subsidies provided outside of a pension plan.
This statement applies to both written
plans and to plans whose existence is implied
from a practice of paying postretirement
benefits. An employer’s practice of providing
postretirement benefits to selected employees under individual contracts with specified
terms determined on an employee-by-employee basis does not, however, constitute a
postretirement benefit plan under the provisions of this statement.
Postretirement benefit plans generally fall
into three categories: single-employer defined benefit plans, multi-employer plans,
and multiple-employer plans.
The accounting requirements set forth in
this interpretation focus on single-and multiple-employer plans. The accounting requirements set forth in Statement No. 106
for multiemployer plans or defined contribution plans shall be adopted for borrowers
electing those types of plans.
Under the provisions of Statement No. 106,
there are two components of the postretirement benefit cost: the current period cost
and the transition obligation. The transition
obligation is a one-time accrual of the costs
resulting from services already provided.
Statement No. 106 allows the transition obligation to be deferred and amortized on a
straight-line basis over the average remaining service period of the active employees. If
the average remaining service life of the employees is less than 20 years, a 20-year amortization period may be used.
Accounting Requirements
All RUS borrowers must adopt the accrual
accounting provisions and reporting requirements set forth in Statement No. 106. The
transition obligation and accrual of the current period cost must be based upon an actuarial study. This study must be updated to
allow the borrower to comply with the measurement date requirements of Statement No.
106; however, the study must, at a minimum,
be updated every five years. RUS will not
allow electric borrowers to account for postretirement benefits on a ‘‘pay-as-you-go’’
basis.
The deferral and amortization of the transition obligation does not require RUS approval provided that it complies with the
provisions of Statement No. 106. If, however,
a borrower elects to expense the transition
obligation in the current period and subsequently defer this expense in accordance
with Statement of Financial Accounting
Standards No. 71, Accounting for the Effects
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PsN: PC150
Rural Utilities Service, USDA
§ 1767.41
of Certain Types of Regulation, the deferral
must be approved by RUS. In those states in
which the commission will not allow the recovery of the transition obligation through
future rates, the transition obligation must
be expensed, in its entirety, in the year in
which Statement No. 106 is adopted. A portion of the transition obligation may be
charged to construction and retirement activities provided such charges are properly
supported.
Effective Date and Implementation
For plans outside the United States and for
defined benefit plans of employers that (a)
are nonpublic enterprises and (b) sponsor defined benefit postretirement plans with no
more than 500 plan participants in the aggregate, Statement No. 106 is effective for fiscal
years beginning after December 15, 1994. For
all other plans, Statement No. 106 is effective for fiscal years beginning after December 15, 1992.
RUS borrowers must comply with the implementation dates set forth in Statement
No. 106. At the time of the adoption of Statement No. 106, rates must be in place sufficient to recover the current period expense
and any amortization of the transition obligation. A copy of a board resolution or commission order, as appropriate, indicating
that the transition obligation and current
period expense have been included in the borrower’s rates must be submitted to RUS.
Accounting Journal Entries—Transition
Obligation
The journal entries required to record the
transition obligation are as follows:
1. If the borrower elects to expense the
transition obligation in the current period
and there is no deferral of costs, the following entry shall be recorded:
Dr. 435.1, Cumulative Effect on Prior Years
of a Change in Accounting Principle
or
Dr. 926, Employee Pensions and Benefits
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To record the current period recognition of
the transition obligation for postretirement benefits. Note: A portion of the transition obligation may be charged to construction and retirement activities provided such charges are properly supported.
2. If the borrower elects to defer and amortize the transition obligation in accordance
with the provisions of Statement No. 71, the
following entry shall be recorded:
Dr. 182.3, Other Regulatory Assets
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To record the deferral of the transition obligation under the provisions of Statement
No. 71.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 182.3, Other Regulatory Assets
To record the amortization of postretirement benefits expenses as they are recovered through rates in accordance with
Statement No. 71.
3. The deferral and amortization of the
transition obligation under the provisions of
Statement No. 106 is considered to be an off
balance sheet item. If, therefore, the borrower elects to defer and amortize the transition obligation on a straight-line basis over
the average remaining service period of the
active employees or 20 years in accordance
with Statement No. 106, no entry is required.
Instead, the transition obligation is recognized as a component of postretirement benefit cost as it is amortized. It should be
noted, however, that the amount of the
unamortized transition obligation must be
disclosed in the notes to the financial statements.
Accounting Journal Entries—Current Period
Expense
The current period postretirement expense
should be recorded by the following entry:
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To record current period postretirement benefit expense.
Dr. 228.3X, Accumulated Provision for Pensions and Benefits—Funded
Cr. 131.1, Cash—General
To record cash payments on a ‘‘pay-as-yougo’’ basis for postretirement benefits.
Accounting Journal Entry—Funding
If a borrower elects to voluntarily fund its
postretirement benefits obligation in an external, irrevocable trust, the following entry
shall be recorded:
Dr. 228.3X, Accumulated Provision for Pensions and Benefits—Funded
Cr. 131.1, Cash—General
To record the funding of postretirement benefits expense into an external, irrevocable
trust.
If a borrower elects to voluntarily fund its
postretirement benefits obligation in an investment vehicle other than an external, irrevocable trust, the following entry shall be
recorded:
Dr. 128, Other Special Funds
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
Cr. 131.1, Cash—General
To record the funding of postretirement benefits expense into an investment vehicle
other than an external, irrevocable trust.
628
Postemployment Benefits
Statement of Financial Accounting Standards No. 112, Employers’ Accounting for
Postemployment Benefits (Statement No.
112) establishes the standards of financial accounting and reporting for employers who
provide benefits to former or inactive employees after employment but before retirement. Inactive employees are those who are
not currently rendering service to the employer but who have not been terminated, including employees who are on disability
leave, regardless of whether they are expected to return to active service. For purposes of applying the provisions of Statement No. 112, former members of the board
of directors are considered to be employees
of the cooperative.
Postemployment benefits include benefits
provided to former or inactive employees,
their beneficiaries, and covered dependents.
They include, but are not limited to, salary
continuation, supplemental benefits (including workmen’s compensation), health care,
job training and counseling, and life insurance coverage. Benefits may be provided in
cash or in kind and may be paid upon cessation of active employment or over a specified period of time.
The cost of providing postemployment benefits is considered to be a part of the compensation provided to an employee in exchange for current service and should, therefore, be accrued as the employee earns the
right to be paid for future postemployment
benefits. Applying the criteria set forth in
Statement of Financial Accounting Standards No. 43, Accounting for Compensated Absences, a postemployment benefit obligation
is accrued when all of the following conditions are met:
1. The employer’s obligation for payment
for future absences is attributable to employees’ services already performed;
2. The obligation relates to employee
rights that vest or accumulate. Vested rights
are considered those rights for which the employer is obligated to make payment even if
the employee terminates. Rights that accumulate are those earned, but unused rights
to compensated absences that may be carried
forward to one or more periods subsequent to
the period in which they are earned;
3. Payment of the compensation is probable; and
4. The amount can be reasonably estimated.
If all of these conditions are not met, the
employer
must
account
for
its
postemployment benefit obligation in accordance with Statement of Financial Accounting Standards No. 5, Accounting for
Contingencies (Statement No. 5) when it becomes probable that a liability has been incurred and the amount of that liability can
be reasonably estimated.
If an obligation for postemployment benefits is not accrued in accordance with the
provisions of Statement No. 5 or Statement
No. 43 only because the amount cannot be
reasonably estimated, the financial statements should disclose that fact.
Accounting Requirements
All RUS borrowers must adopt the accrual
accounting provisions and reporting requirements set forth in Statement No. 112 as of
the statement’s implementation date. A portion of the cumulative effect may be charged
to construction and retirement activities
provided such charges are properly supported. If a borrower elects to defer the cumulative effect of implementing Statement
No. 112 in accordance with the provisions of
Statement of Financial Accounting Standards No. 71, Accounting for the Effects of
Certain Types of Regulation, the deferral
must be approved by RUS.
Effective Date and Implementation
Statement No. 112 is effective for fiscal
years beginning after December 15, 1993. Previously issued financial statements should
not be restated.
RUS borrowers must comply with the implementation date set forth in Statement
No. 112. At the time of the adoption of Statement No. 112, rates must be in place sufficient to recover the current period expense.
Accounting Journal Entries
The journal entries required to account for
postemployment benefits are as follows:
Dr. 435.1, Cumulative Effect on Prior Years
of a Change in Accounting Principle
Dr. 107, Construction Work in Progress
Dr. 108.8, Retirement Work in Progress
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To record the cumulative effect of implementing Statement No. 112.
NOTE: A portion of the cumulative effect
may be charged to construction and retirement activities provided such charges are
properly supported. Account 435.1 is closed to
Account 219.2, Nonoperating Margins.
If the borrower elects to defer and amortize the cumulative effect in accordance with
the provisions of Statement No. 71, the following entry shall be recorded:
Dr. 182.3, Other Regulatory Assets
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To record the deferral of the cumulative effect of implementing Statement No. 112 in
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Rural Utilities Service, USDA
§ 1767.41
accordance with the provisions of Statement No. 71.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work in Progress
Dr. 108.8, Retirement Work in Progress
Cr. 182.3, Other Regulatory Assets
To record the amortization of the cumulative effect of implementing Statement
No. 112 as it is recovered through rates in
accordance with Statement No. 71.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work in Progress
Dr. 108.8, Retirement Work in Progress
Cr. 228.3, Accumulated Provision for Pensions and Benefits
To record current period postemployment
benefit expense.
NOTE: If postemployment benefits are accrued under the criteria set forth in Statement No. 43, this journal entry is made on a
monthly basis. If, however, the accrual is
based upon the provisions of Statement No.
5, this is a one-time entry unless the liability is reevaluated and subsequently adjusted.
629
Investments in Debt and Equity
Securities
Statement of Financial Accounting Standards No. 115, Accounting for Certain Investments in Debt and Equity Securities (Statement No. 115), establishes the standards of financial accounting and reporting for investments in debt securities and for investments
in equity securities that have readily determinable fair values. Statement No. 115 does
not apply to investments in equity securities
accounted for under the equity method nor
to investments in consolidated subsidiaries.
At the time of acquisition, an entity must
classify debt and equity securities into one
of three categories: held-to-maturity, available-for-sale, or trading. At the balance
sheet date, the appropriateness of the classifications must be reassessed.
Investments in debt securities are classified as held-to-maturity and are measured at
amortized cost in the balance sheet only if
the reporting entity has the positive intent
and ability to hold these securities to maturity. Debt securities are not classified as
held-to-maturity if the entity has the intent
to hold the security only for an indefinite period; for example, if the security would become available for sale in response to
changes in market interest rates and related
changes in the security’s prepayment risk,
needs for liquidity, changes in the availability of and the yield on alternative investments, changes in funding sources and
terms, and changes in foreign currency risk.
Investments in debt securities that are not
classified as held-to-maturity and equity securities that have readily determinable fair
values are classified as either trading securi-
ties or available-for-sale securities and are
measured at fair value in the balance sheet.
Trading securities are those securities that
are bought and held principally for the purpose of selling them in the near future. Trading generally reflects active and frequent
buying and selling and trading securities are
generally used with the objective of generating profits on short-term differences in
prices. Available-for-sale securities are those
investments not classified as either trading
securities or held-to-maturity securities.
Statement No. 115 requires unrealized
holding gains and losses for trading securities to be included in earnings in the current
period. Unrealized holding gains and losses
for available-for-sale securities are excluded
from earnings; however, they are reported as
a net amount in a separate component of
shareholders’ equity until realized.
For individual securities classified as either available-for sale or held-to-maturity,
an entity must determine whether a decline
in the security’s fair value below the amortized cost is other than temporary. If the decline in fair value is determined to be permanent, that is, it is probable that the entity
will not be able to collect all amounts due
under the contractual terms of the security,
the realized loss is accounted for in earnings
of the current period. The new cost basis is
not adjusted upward for subsequent recoveries in the fair value. Subsequent increases
in the fair value of available-for-sale securities are included in the separate component
of equity. Subsequent decreases are also included in the separate component of equity.
All trading securities are reported as current assets in the balance sheet and individual held-to-maturity and available-forsale securities are classified as either current or noncurrent, as appropriate. Cash
flows from the purchase, sale, or maturity of
available-for-sale securities and held-to-maturity securities are classified in the statement of cash flows as cash flows from investing activities and reported gross for each security classification.
Accounting Requirements
All RUS borrowers must adopt the accounting, reporting, and disclosure requirements set forth in Statement No. 115 as of
the statement’s implementation date. Unrealized holding gains or losses for trading securities shall be recorded in either Account
421, Miscellaneous Nonoperating Income, or
Account 426.5, Other Deductions, as appropriate. Unrealized holding gains or losses for
available-for-sale securities held by the corporate entity are recognized as a component
of stockholder’s equity in Account 215.1, Unrealized Gains and Losses—Debt and Equity
Securities. A contra account of the investment account shall be debited or credited accordingly. Unrealized gains and losses for
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§ 1767.41
7 CFR Ch. XVII (1–1–12 Edition)
available-for-sale securities held in a decommissioning fund shall increase or decrease,
as appropriate, the reported value of the
fund.
Effective Date and Implementation
Statement No. 115 is effective for fiscal
years beginning after December 15, 1993. At
the beginning of the entity’s fiscal year, the
entity must classify its debt and equity securities on the basis of the entity’s current intent. This statement may not be applied
retroactively to prior years’ financial statements. For fiscal years beginning prior to
December 16, 1993, reporting entities are permitted to apply Statement No. 115 as of the
end of a fiscal year for which annual financial statements have not previously been
issued.
630
Split Dollar Life Insurance
The National Rural Electric Cooperative
Association Split Dollar Life Insurance provides life insurance benefits to cooperative
employees. The benefits provided under this
policy consist of two components, the face
value of the insurance policy and the accumulated cash surrender value. While the employee is the owner of the policy, the employee must sign a collateral assignment
giving the cooperative absolute right to the
cash surrender value of the policy. Under the
terms of this collateral assignment, the employee must reimburse the cooperative for
the premiums paid upon the employee’s termination of employment or attainment of
the age of 62 if the employee wishes to maintain the insurance coverage. If death occurs
prior to either of these events, the premiums
paid to date by the cooperative are deducted
from the death benefits payable to the policy
beneficiary.
Accounting Requirements
Financial Accounting Standards Board
Technical Bulletin 85–4, Accounting for Purchase of Life Insurance (Bulletin 85–4), states
that the amount that could be realized under
an insurance contract as of the date of the financial statements should be reported as an
asset. The change in the cash surrender or
contract value of that asset during the period should be reported as an adjustment to
the premiums paid in determining the expense or income to be recognized for the period. The cooperative shall, therefore, record
the cash surrender value of the policy as an
asset because of its absolute right to receive
that value based upon the employee’s collateral assignment. Any receivable that may
occur as a result of the employee reimbursement for the premiums paid is contingent
upon the employee electing to maintain the
insurance coverage after termination of employment or reaching the age of 62 and is not
recorded as an asset on the cooperative’s
records.
Accounting Journal Entries
The journal entries required to account for
the NRECA Split Dollar Life Insurance Program are as follows:
Dr. 124, Other Investments
Cr. Various Operations, Maintenance, and
Administrative Expense Accounts
To record an increase in the cash surrender
value of the insurance contract.
or
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Cr. 124, Other Investments
To record a decrease in the cash surrender
value of the insurance contract.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 131.1, Cash—General
To record the premium cost of the insurance
contract.
631
Special Early Retirement Plan
The Special Early Retirement Plan (SERP)
being offered through the National Rural
Electric Cooperative Association (NRECA)
constitutes an amendment to its Retirement
and Security (R&S) program. The SERP is
often chosen as a vehicle through which the
cooperative may reduce the size of its workforce or replace more highly paid employees
with lower paid entry level employees. If an
employee covered by an NRECA retirement
plan chose to retire before his/her normal retirement date, that employee would receive
an actuarially reduced benefit. However,
when a cooperative elects to offer a SERP,
no such reduction is required. The cooperative selects the criteria under which an employee will be eligible to participate such as
age, years of service, or a combination of age
and benefit service requirements. As with
other amendments to the R&S program,
NRECA calculates the cost of the plan based
upon the criteria selected by the cooperative
and allows the cooperative to pay the cost
immediately or on an installment basis.
Under this plan, the employee receives full
retirement benefits in the form of either an
immediate lump-sum settlement or annuity
payments. It is not unusual for the cooperative to add an incentive to encourage participation such as medical or life insurance, either in whole or in part, until age 65. The actuarial analysis provided by NRECA includes
the cost of the SERP and the estimated reduction and/or increase in costs associated
with Statement of Financial Accounting
Standards No. 106, Employer’s Accounting
for Postretirement Benefits Other Than Pensions (Statement No. 106).
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Rural Utilities Service, USDA
§ 1767.41
Statement of Financial Accounting Standards
No. 87, Employer’s Accounting for Pensions
(Statement No. 87)
In accordance with the provisions of Statement No. 87, the costs associated with an
amendment to a multiemployer plan are recognized when they become due and payable.
Since NRECA calculates the amount due and
payable at the time of the amendment, the
entire amount due, whether paid immediately or financed through NRECA or any
other institution, must be recognized as an
expense at that time. This cost may, however, be deferred in accordance with the provisions of Statement of Financial Accounting Standards No. 71, Accounting for the Effects of Certain Types of Regulation (Statement No. 71).
Accounting Journal Entries
The journal entry required to record the
additional pension costs associated with the
SERP is as follows:
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 131.1, Cash—General
or
Cr. 224, Other Long-Term Debt
To record the prior service pension costs incurred as a result of adopting the SERP.
If the borrower elects to defer and amortize the cost in accordance with Statement
No. 71, the following entries shall be recorded:
Dr. 182.3, Other Regulatory Assets
Cr. 131.1, Cash—General
or
Cr. 224, Other Long-Term Debt
To record, under the provisions of Statement
No. 71, the deferral of the prior service pension costs incurred as a result of adopting
the SERP.
Dr. Various Operations, Maintenance, and
Administrative Expense Accounts
Dr. 107, Construction Work-in-Progress
Dr. 108.8, Retirement Work-in-Progress
Cr. 182.3, Other Regulatory Assets
To record the amortization of deferred prior
service pension costs as they are recovered
through rates in accordance with Statement No. 71.
Statement No. 106
In the event that net reductions in postretirement benefits result from this plan
amendment, the reductions are recognized as
follows:
1. The amount of the reduction shall first
reduce any existing unrecognized prior service cost;
2. Any remaining reductions shall next reduce any unrecognized transition obligation;
and
3. Any remaining reduction shall be recognized in a manner consistent with the accounting for prior service postretirement
benefit costs.
In accordance with Statement No. 106,
prior service postretirement benefit costs
are recognized in equal amounts in each remaining year of service for active plan participants. Because it is an off-balance sheet
item, only a memorandum entry is required
to reduce the amount of unrecognized prior
service cost.
At adoption, Statement No. 106 permitted
the recognition of the transition obligation
in one of two ways. The transition obligation
was recognized over the longer of the average remaining service period of current plan
participants or 20 years, or it may have been
recognized immediately. If the delayed recognition option was chosen under Statement
No. 106, this, too, was an off-balance sheet
item that requires only a memorandum
entry to reduce the amount of unrecognized
transition obligation. However, if the immediate recognition option was chosen, the cooperative either recorded the expense in that
year or, with RUS approval, deferred the expense under the provisions of Statement No.
71. If the expense were recorded, in total, in
the year of adoption, no unrecognized transition obligation remains to reduce. If, however, the transition obligation was deferred
in accordance with Statement No. 71, the
journal entry required to effect the reduction in Statement No. 106 expense is as follows:
Dr. 228.3, Accumulated Provision for Pensions and Benefits
Cr. 182.3, Other Regulatory Assets
To record a reduction in the deferred Statement No. 106 transition obligation resulting from the adoption of the SERP.
NOTE: The dollar value of this entry must
not exceed the deferral shown on the balance
sheet.
If, after the two previous reductions have
been made, any net credit remains, it shall
be recognized in a manner consistent with
prior service costs; that is, as an off balance
sheet item that is amortized over the remaining service lives (to full eligibility) of
the active plan participants. The annual amortization
reduces
amounts
normally
charged to the various operations, maintenance, and administrative expense accounts
and Account 228.3 as postretirement benefit
expenses.
633
Cushion of Credit
On December 21, 1987, Section 313, Cushion
of Credits Payments Program, was added to
the Rural Electrification Act. Cushion of
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§§ 1767.42–1767.45
7 CFR Ch. XVII (1–1–12 Edition)
credit regulations are located in The Code of
Federal Regulations (CFR) 7 CFR part 1785.
A cushion of credit payment is a voluntary
unscheduled payment by a borrower in excess of amounts due and payable. A cushion
of credit account is automatically established by Rural Development for each borrower who makes a payment after October 1,
1987, in excess of amounts then due on a
Rural Development note. Payments received
in the month in which an installment is due
will be applied to the installment due. However, if the regular installment payment is
received at a later date in the month, the
first payment received will be applied retro-
actively to the cushion of credit account and
the second will be applied to the installment
due. By law, cushion of credit accounts earn
five per cent interest annually, accrued daily
and posted quarterly. Although the interest
earned will appear as a reduction in the interest billed on the borrower’s Rural Development notes and will be separately shown
on Form 694, Statement of Interest and Principal Due, interest billed must be adjusted
by adding back the interest earned while
principal is reduced by the amount of the interest earned before recording the debt payment. Below is an example of the adjustment
required:
As billed
Payment Billed ..................................................................................................
Principal .............................................................................................................
Interest ...............................................................................................................
Adjustment
$1,000
800
* 200
Adjusted
........................
¥$50
50
$1,000
750
250
* Includes reduction of $50 for interest earned on cushion of credit account.
Cushion of credit is intended to enable the
borrower to deposit funds and have those
funds available to make scheduled payments
(or installments) only. A borrower may not
have more cushion of credit funds, including
accrued interest, than their entire Rural Development debt which includes loans made in
Rural Electric and Telephone (RET) and Federal Financing Bank (FFB). If a borrower
makes less than or no payment when their
billing invoice is due, cushion of credit will
automatically add to or make their payment
systematically for them.
Cushion of credit is not available to use for
prepayment of loan accounts before maturity except for the following situations:
1. The total amount of cushion of credit
principal with accrued interest equals the
borrower’s total debt
2. The borrower intends to prepay all remaining debt using a combination of payment with all cushion of credit funds available.
On January 15, 2003, Rural Development
issued letter guidance permitting a proportionate share of the cushion of credit balance
be reported as a reduction in Current Maturities Long-Term Debt. Additionally, beginning with calendar year 2006 submissions,
Form 7 has been revised to include a separate line for cushion of credit balances within the long-term debt section of Part C.
For purposes of the audited financial statements, presentation of the balance of the
cushion of credit account as a long-term investment is an acceptable alternative to
Rural Development.
[58 FR 59825, Nov. 10, 1993, as amended at 59
FR 27436, May 27, 1994; 60 FR 55430, 55435–
55438, Nov. 1, 1995; 62 FR 42319–42321, 42323,
42330, Aug. 6, 1997; 73 FR 30288, May 27, 2008]
§§ 1767.42–1767.45
Subpart C—Depreciation Rates
and Procedures [Reserved]
ACCOUNTING REQUIREMENTS
All payments made to a cushion of credit
account should be recorded as follows:
Dr. 224.6, Advance Payments Unapplied—
Long-Term Debt—Debit
Cr. 131.1, Cash—General
All interest earned on the balance of funds
in the account should be recorded as follows:
Dr. 224.6, Advance Payments Unapplied—
Long-Term Debt—Debit
Cr. 419, Interest and Dividend Income
§§ 1767.46–1767.65
[Reserved]
Subpart D—Preservation of
Records
SOURCE: 73 FR 30290, May 27, 2008, unless
otherwise noted.
§ 1767.66
REPORTING REQUIREMENTS
Previously, Rural Development required
that the balance in the cushion of credit account be reported, on the Form 7, Financial
and Statistical Report, as a reduction of the
Rural Development long-term debt balance.
[Reserved]
Purpose.
This subpart establishes policies and
procedures for the effective preservation and efficient maintenance of financial records of Electric borrowers.
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Rural Utilities Service, USDA
§ 1767.71
§ 1767.67 General.
(a) Rural Development endorses the
guidelines as described by the Federal
Energy
Regulatory
Commission’s
(FERC) ‘‘Regulations to Govern the
Preservation of Records of Public Utilities and Licensees.’’ The FERC guidelines can be found in 18 CFR part 125.
(b) The regulations prescribed in this
part apply to all books of account, contracts, records, memoranda, documents, papers, and correspondence prepared by or on behalf of the borrower
as well as those which come into its
possession in connection with the acquisition of property by purchase, consolidation, merger, etc.
(c) The regulations prescribed in this
part shall not be construed as excusing
compliance with any other lawful requirements for the preservation of
records.
§ 1767.68 Designation of a supervisory
official.
Each borrower shall designate one or
more officials to supervise the preservation of its records.
§ 1767.69 Index of records.
(a) Each borrower shall maintain a
master index of records. The master
index shall identify the records retained, the related retention period,
and the locations where the records are
maintained. The master index shall be
subject to review by Rural Development and Rural Development shall reserve the right to add records, or
lengthen retention periods upon finding that retention periods may be insufficient for its purposes.
(b) At each office where records are
kept or stored the borrower shall arrange, file, and index the records currently at that site so that they may be
readily identified and made available
to representatives of Rural Development.
§ 1767.70 Record storage media.
The media used to capture and store
the data will play an important part of
each Rural Development borrower.
Each borrower has the flexibility to select its own storage media. The following are required:
(a) The storage media shall have a
life expectancy at least equal to the
applicable retention period provided
for in the master index of records, unless there is a quality transfer from
one media to another with no loss of
data. Each transfer of data from one
media to another shall be verified for
accuracy and documented.
(b) Each borrower shall implement
internal control procedures that assure
the reliability of, and ready access to,
data
stored
on
machine-readable
media. The borrower’s internal control
procedures shall be documented by a
responsible supervisory official.
(c) Records shall be indexed and retained in such a manner that they are
easily accessible.
(d) The borrower shall have the hardware and software available to locate,
identify, and reproduce the records in
readable form without loss of clarity.
(e) At the expiration of the retention
period, the borrower may use any appropriate method to destroy records.
(f) When any records are lost or destroyed before the expiration of the retention period set forth in the master
index, a certified statement shall be
added to the master index listing, as
far as may be determined, the records
lost or destroyed and describing the
circumstances of the premature loss or
destruction.
§ 1767.71 Periods of retention.
(a) Records of Rural Development
borrowers of a kind not listed in the
FERC regulations should be governed
by those applicable to the closest similar records. Financial requirement and
expenditure statements, which are not
specifically covered by FERC regulations, are recommended to be kept for
one year after the ‘‘as of date’’ of Rural
Development’s loan fund and accounting review.
(b) Consumer accounts’ records
should be kept for those years for
which patronage capital has not been
allocated.
(c) Records supporting construction
financed by Rural Development shall
be retained until audited and approved
by Rural Development.
(d) Records related to plant in service
must be retained until the facilities
are permanently removed from utility
service, all removal and restoration activities are completed, and all costs are
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§§ 1767.72–1767.85
7 CFR Ch. XVII (1–1–12 Edition)
retired from the accounting records unless accounting adjustments resulting
from reclassification and original costs
studies have been approved by Rural
Development or other regulatory body
having jurisdiction.
(e) Life and mortality study data for
depreciation purposes must be retained
for 25 years or for 10 years after plant
is retired, whichever is longer.
§§ 1767.72–1767.85
[Reserved]
PART 1770—ACCOUNTING REQUIREMENTS FOR RUS TELECOMMUNICATIONS
BORROWERS
Subpart A—Preservation of Records
Sec.
1770.1 General.
1770.2 Designation of a supervisory official.
1770.3 Index of records.
1770.4 Record storage media.
1770.5 Periods of retention.
1770.6–1770.9 [Reserved]
Subpart B—Uniform System of Accounts
1770.10 General.
1770.11 Accounting system requirements.
1770.12 Supplementary accounts.
1770.13 Accounting requirements.
1770.14 Continuing property records.
1770.15 Supplementary accounts required of
all borrowers.
1770.16 Supplementary accounts required of
nonprofit organizations.
1770.17 Expense matrix.
1770.18–1770.24 [Reserved]
1770.25 Unusual items and contingent liabilities.
Subpart C—Accounting Interpretations
1770.26 General.
1770.27 Definitions.
1770.28–1770.45 [Reserved]
APPENDIX TO SUBPART C—ACCOUNTING METHODS AND PROCEDURES REQUIRED OF ALL
BORROWERS
AUTHORITY: 7 U.S.C. 901 et seq.; 7 U.S.C.
1921 et seq.; Pub. L. 103–354, 108 Stat. 3178 (7
U.S.C. 6941 et seq.).
SOURCE: 55 FR 3388, Feb. 1, 1990, unless otherwise noted.
Subpart A—Preservation of
Records
SOURCE: 70 FR 25755, May 16, 2005, unless
otherwise noted.
§ 1770.1
General.
(a) This subpart establishes RUS polices and procedures for the preservation of records of telecommunications
borrowers.
(b) The regulations prescribed in this
part apply to all books of account, contracts, records, memoranda, documents, papers, and correspondence prepared by or on behalf of the borrower
as well as those which come into its
possession in connection with the acquisition of property by purchase, consolidation, merger, etc.
(c) The regulations prescribed in this
part shall not be construed as excusing
compliance with any other lawful requirements for the preservation of
records.
§ 1770.2 Designation of a supervisory
official.
Each borrower shall designate one or
more officials to supervise the preservation of its records.
§ 1770.3
Index of records.
(a) Each borrower shall maintain a
master index of records. The master
index shall identify the records retained, the related retention period,
and the locations where the records are
maintained. The master index shall be
subject to review by RUS and RUS
shall reserve the right to add records,
or lengthen retention periods upon
finding that retention periods may be
insufficient for its purposes.
(b) At each office where records are
kept or stored the borrower shall arrange, file, and index the records currently at that site so that they may be
readily identified and made available
to representatives of RUS.
§ 1770.4
Record storage media.
Each RUS borrower has the flexibility to select its own storage media
subject to the following conditions:
(a) The storage media must have a
life expectancy at least equal to the
applicable retention period provided
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| File Type | application/pdf |
| File Modified | 2012-02-15 |
| File Created | 2012-02-15 |