completion of contracts, retained percentages on contracts for construction of buildings and similar items. 546 Premium on funded debt. This account shall include the total of the net credit balances in the discount, expense, and premium accounts for the several subclasses of funded debt. (See instruction 5-4.) 547 Operating and insurance reserves. This account shall include the ledger balances representing reserves created by charges to Operating Revenues or to Operating Expenses for overcharge, personal injury, and other claims and for insurance and similar purposes, such charges being made currently for the purpose of equalizing charges to operating accounts for the current accounting year. NOTE: The credit balances in reserve accounts representing appropriations of income or surplus for sinking funds, etc., shall not be included in this account. (See account No. 553.) Accrued depreciation credit balances shall be included in account No. 548 or 550, as may be appropriate. 548 Accrued depreciation; buildings and equipment. (a) To this account shall be credited amounts charged to account 31, "Depreciation," to cover the loss in service value (note instruction 01-1(o)) of depreciable carrier property. It shall be credited also with any amounts which the carrier may be authorized to charge to account 417, "Miscellaneous profit and loss debits," in respect to past accrued depreciation not provided for. (See instruction 01-2(f).) (b) At the time of retirement (note instruction 01-1(r)) of depreciable carrier property this account shall be charged with the service value (note instruction 01-1(0)) of the property retired, and to it shall be credited the insurance recovered, if any. (c) For corporate ledger and balancesheet purposes, this account shall be regarded and treated as a single composite reserve. However, for purposes of analysis, the carrier shall maintain subsidiary records in which the depreciation reserve is broken down into component parts corresponding to the primary building and equipment accounts which include depreciable carrier property (see also instruction 01-2(d)). These subsidiary records shall show the current credits and debits in the reserve in complete detail by such primary real-propertyand-equipment accounts. 550 Accrued depreciation; miscellaneous physical property. To this account shall be credited amounts charged to the expenses of operating property the cost of which is included in account No. 503, "Miscellaneous physical property," to cover the depreciation thereon. To this account shall be charged at the time of retirement amounts equal to amounts previously credited thereto with respect to any property destroyed, sold, or otherwise permanently retired from service. 551 Other unadjusted credits. This account shall include the amount of suspense account credit balances that cannot be entirely cleared and disposed of until additional information is received, credit balances in clearing accounts for shop expenses and store expenses, and similar items. 552 Additions to property through income and surplus. This account shall include such amounts of income and surplus as have been definitely appropriated or set aside and expended since June 30, 1908, in the acquisition of property the cost of which is included in property investment accounts other than those for securities. Investments in real property, equipment, and miscellaneous physical property shall be shown separately in the accounting company's records. NOTE: Temporary appropriations for the acquisition of property the cost of which is intended later to be met through an issue of securities shall not be included in this account. 553 Reserves from income and surplus. This account shall include the net balances in acounts to which are credited definite appropriations of income or surplus held in reserve. This account shall be subdivided under the following heads: (a) Sinking fund reserves. Appropriations of income or surplus specifically set aside in the hands of trustees for sinking and redemption funds, including income accretions to such funds retained therein. (b) Miscellaneous fund reserves. Appropriations of income or surplus, not provided for elsewhere, specifically set aside in the hands of trustees, including income accretions to such funds retained therein. (c) Appropriations not specifically invested. Appropriations of income or surplus for definite purposes not provided for elsewhere, and for which no specific investment or segregation of assets has been made. 554 Profit and loss balance. This account shall include the balance at the close of the fiscal period as shown in the accounts provided in the classification of profit and loss accounts. NOTE: The requirement that all similar transactions were to be recorded under accounts having identical captions gave rise to numerous queries, as to the proper application of the mandatory regulations in this part. Decisions upon these accounting questions are published in bulletin form under order of the Commission, and have the force of the original classifications affected. See Accounting Bulletin No. 13 for express companies. PART 1204-PIPELINE COMPANIES LIST OF INSTRUCTIONS AND ACCOUNTS 1-3 Accounting period. 1-4 Accrued amortization-Carrier property. Operating oil supply. 1-5 Delayed items. 34 Noncarrier property. 35 1-7 Items in texts of accounts. Accrued depreciation-Noncarrier property. Organization costs and other intan property. gibles. Accrued amortization of intangibles. property. 42 1-10 Amortization of intangibles. 1-11 Interpretation of rules. Unamortized discount and interest on 43 long-term debt. Miscellaneous other assets. Other deferred charges. Payables to affiliated companies. Accounts payable. 2-2 Investments and special funds. 53 Salaries and wages payable. 2-3 Tangible property. 54 Interest payable. Taxes payable. Dividends payable. Long-term debt payable within one year. Other current liabilities. INSTRUCTIONS FOR CARRIER PROPERTY ACCOUNTS Unamortized premium on long-term debt. Other noncurrent liabilities. 680 Pumping equipment. 690 695 700 710 720 740 750 Extraordinary and Prior Period Items Extraordinary items (net). Prior period items (net). Federal income taxes on extraordinary and prior period items. Retained Income Accounts Net balance transferred from income. Form of balance sheet statement. Form of unappropriated retained AUTHORITY: The provisions of this Part 20 issued under sec. 12, 20, 24 Stat. 383, as amended, 49 U.S.C. 12, 20. SOURCE: The provisions of this Part 1204 appear at 32 F.R. 20241, Dec. 20, 1967, unless otherwise noted. LIST OF INSTRUCTIONS AND ACCOUNTS (i) Definitions. Definitions of terms used in this system of accounts: 1. "Accounts" means the accounts prescribed in this system of accounts. 2. "Actually issued," as applied to securities issued or assumed by the carrier, means those which have been sold to bona fide purchasers or holders for a valuable consideration, those issued in exchange for other securities or other property, and those issued as dividends on stock; and the purchasers or holders secured them free from control by the carrier. 3. "Actually outstanding," as applied to securities issued or assumed by the carrier, means those which have been actually issued and are neither retired nor held by or for the carrier. 4. "Additions" means facilities, equipment, and structures added to existing property exclusive of replacements. 5. "Affiliated companies" means companies or persons that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the accounting carrier. 6. "Amortization" means the gradual extinguishment of an amount in an account by distributing such amount over a fixed period, over the life of the asset or liability to which it applies, or over the period during which it is anticipated the benefit will be realized. 7. "Book cost" means the amount at which assets are recorded in the accounts without deduction of related provisions for accrued depreciation, amortization, or for other purposes. 8. "Carrier" means a common carrier by pipeline subject to the Interstate Commerce Act. 9. "Commission" means the Interstate Commerce Commission. 10. "Control" (including the terms "controlling," "controlled by," and "under common control with") means 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 voting of securities, common directors, officers or stockholders, voting trusts, holding trusts, associated companies, contract or any other direct or indirect means. When there is doubt about an existence of control in any particular situation, the carrier shall report all pertinent facts to the Commission for determination. 11. "Cost" means amount of money actually paid for property or services or the current cash value of the consideration given when it is other than money. 12. "Cost of removal" means cost of demolishing, dismantling, tearing down, or otherwise removing property including costs of handling and transportation. 13. "Date of retirement" means the date that property is withdrawn from service. 14. "Debt expense" means all expense in connection with the issuance and sale of evidences of debt, such as fees for drafting mortgages and trusts; fees and taxes for issuing or recording evidences of debt; cost of engraving and printing bonds, certificates of indebtedness, and other evidences of debt; fees paid to trustees; specific costs of obtaining governmental authority; fees for legal services; fees and commissions paid underwriters, brokers, and salesmen for marketing evidences of debt; fees and expenses of listing on exchanges; and other like costs. 235 15. "Depreciation" means the loss in service value not restored by current maintenance and incurred in connection with the consumption or prospective retirement of property in the course of service from causes against which the carrier is not protected by insurance, and the effect of which can be forecast with a reasonable approach to accuracy. 16. "Discount," as applied to securities issued or assumed by the carrier, means the excess of the par 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. 17. "Group plan" means the plan under which depreciation charges are computed on the book cost of all property included in each depreciable account by application of a composite rate of depreciation based on the weighted average service lives of such property. 18. "Improvements" means alterations or changes in structural design of property which result in increased service life or efficiency. 19. "Minor items of property" means the associated parts or items of which units of property are composed. 20. "Net salvage value" means salvage value of property retired less the cost of removal. 21. "Nominally issued," as applied to securities issued or assumed by the carrier, means 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 fund of the accounting company. 22. “Nominally outstanding," as applied to securities issued or assumed by the carrier, means those which, after being actually issued, have been reacquired by or for the accounting company under such circumstances which require them to be considered as held alive and not retired and canceled. 23. "Premium," as applied to securities issued or assumed by the carrier, means 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. 24. "Property retired" means units of property which have been removed, sold, abandoned, destroyed, or which for any cause have been withdrawn from service; also, minor items of property not replaced. 25. "Replacement" means the substitution of a part or of a complete unit of property with a new part or unit. 26. "Salvage value" means the amount received or estimated to be received for property retired less any expenses incurred in connection with the sale or preparing the property for sale; or, if retained, the value at which the recovered material is chargeable to the material and supplies account or other appropriate account. 27. "Service life" means the period between the date that property is placed in service and the date of its retirement. 28. "Service value" means the book cost less the actual or estimated net salvage value of property. 29. "Straight-line method," as applied to depreciation and amortization accounting, means the plan under which the service value of property is charged to expense and credited to the related accrued depreciation or amortization account through equal monthly charges during the service life of the property. GENERAL INSTRUCTIONS Ac 1-1 Classification of accounts. counts are prescribed to record the cost of property used in transportation and related operations and for revenues, expenses, taxes, rents, and other items of income for such operations. Separate accounts are prescribed for cost of property not used in transportation operations and for income and expenses pertaining thereto; for other investments and related income; for extraordinary and prior period items, including applicable income taxes; and for assets and liabilities. In addition, stockholders' equity accounts, designed to segregate directly contributed capital from appropriated and unappropriated retained income, are provided. Retained income accounts form the connecting link between the income account and the equity section of the balance sheet. They are provided to record the transfer of net income or loss for the year; certain capital transactions; and, when authorized by the Commission, other items. 1-2 Records. (a) Carriers shall keep their accounts and records in accordance with the prescribed accounts. In addition, clearing accounts, temporary accounts, and subdivisions of any account may be kept provided the integrity of the prescribed accounts is not impaired. Each carrier shall keep its books of account, and all other books, records and memoranda which support the entries in such books of account, so as to be able to furnish readily full information as to any item included in any account. Each entry shall be supported by such detailed information as will permit ready identification, analysis, and verification of all facts relevant thereto. (b) The books and records referred to herein include not only accounting records in a limited technical sense, but all records, such as minute books, stock books, reports, correspondence, memorandums, etc., which may be useful in developing the history of or facts regarding any transaction. (c) Carriers shall not destroy any books or records unless the destruction thereof is permitted by The Regulations to Govern the Destruction of Records of Pipeline Companies. Part 1224 of this chapter. 1-3 Accounting period. (a) Each carrier shall keep its books on a monthly basis so that all transactions, as nearly as may be ascertained, shall be entered in the accounts not later than 60 days after the last day of the period for which the accounts are stated, except that the time within which the final entries for the year ending December 31 shall be made may be extended to such date in the following March as shall not interfere with the preparation and filing of the annual report. (b) Changes shall not be made in the accounts for periods covered by reports that have been filed with the Commisauthorized by the Commission. 1-4 Accounting method. (a) This system of accounts shall be kept by the accrual method of accounting. The basis used for accruing income and expense items each month shall be consistently applied and any change in such basis or any unusual accruals involving material amounts shall be promptly reported to the Commission. (b) When the amount of any transaction cannot be accurately determined in time for inclusion in the applicable month's accounts, an estimated amount shall be entered in the proper accounts. Appropriate adjustments shall be made as soon as the actual amounts become known or at the time a substantial change is indicated. Carriers are not required to anticipate minor items which do not appreciably affect the accounts. |