UNITED STATES DEPARTMENT OF AGRICULTURE
Rural Utilities Service

BULLETIN 1767B-1

SUBJECT:	Uniform System of Accounts - Electric

TO:		All Electric Borrowers
		RUS Electric Staff
		Borrower Accounting Division

EFFECTIVE DATE:   September 5, 1997

EXPIRATION DATE:  Date of change in 7 CFR Part 1767 by rulemaking

OFFICE OF PRIMARY INTEREST:  Technical Accounting and Auditing 
Staff, Borrower Accounting Division

PREVIOUS PUBLICATIONS:  This bulletin replaces RUS
Bulletin 1767B-1, Uniform System of Accounts - Electric, dated 
December 1, 1995.

FILING INSTRUCTIONS:  Discard RUS Bulletin 1767B-1, Uniform 
System of Accounts - Electric, dated December 1, 1995.

PURPOSE:  This bulletin sets forth, in a more user-friendly 
format, the RUS Uniform System of Accounts (USoA) and accounting 
interpretations for electric borrowers.  This bulletin is a 
reprint of already codified policies and procedures found in
7 CFR Part 1767, Accounting Requirements for RUS Electric 
Borrowers, revised as of August 6, 1997.  This bulletin is for 
use by borrowers, consultants, and other interested parties.

Every effort has been made to ensure the accuracy of this 
document.  However, in case of discrepancies, the regulations at 
7 CFR Part 1767, 62 FR 42284, published August 6, 1997, are the 
authorized sources.

                                          		
Administrator                                          Date

TABLE OF CONTENTS

TEXT:

 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 RUS Uniform System of Accounts

 1767.15  General Instructions

 1767.16  Electric Plant Instructions

 1767.17  Operating Expense Instructions

 1767.18  Assets and Other Debits

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
109	[Reserved]
110	[Reserved]
111	Accumulated Provision for Amortization of Electric
	  Utility Plant
112	[Reserved]
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

Other Property and Investments

121	Nonutility Property
122	Accumulated Provision for Depreciation and Amortization
	  of Nonutility Property
123	Investment in Associated Companies
123.1	Patronage Capital from Associated Cooperatives
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 
123.3	Investment in Associated Organizations - Federal
	  Economic Development Loans
123.4	Investment in Associated Organizations - Non-Federal
	  Economic Development Loans
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

Current and Accrued Assets

131	Cash
131.1	Cash - General 
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
131.2	Cash - Construction Fund - Trustee 
131.3	Cash - Installation Loan and Collection Fund 
131.4	Transfer of Cash 
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
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

Deferred Debits

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

 1767.19  Liabilities and Other Credits

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	[Reserved]
203	[Reserved]
204	[Reserved]
205	[Reserved]
206	[Reserved]
207	[Reserved]
208	Donated Capital
209	[Reserved]
210	[Reserved]
211	Consumers' Contributions for Debt Service 
212	[Reserved]
213	[Reserved]
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 
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
225	Unamortized Premium on Long-Term Debt
226	Unamortized Discount on Long-Term Debt - Debit

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

Current and Accrued Liabilities

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
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
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

 1767.20  Plant Accounts

Intangible Plant

301	Organization
302	Franchises and Consents
303	Miscellaneous Intangible Plant

Steam Production Plant

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

Nuclear Production Plant

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

Hydraulic Production Plant

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

Other Production Plant

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

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

Distribution Plant

360	Land and Land Rights
361	Structures and Improvements
362	Station Equipment
363	Storage Battery Equipment
364	Poles, Towers and Fixtures
365	Overhead Conductors and Devices
366	Underground Conduit
367	Underground Conductors and Devices
368	Line Transformers
369	Services
370	Meters
371	Installations on Customers' Premises
372	Leased Property on Customers' Premises
373	Street Lighting and Signal Systems

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

 1767.21  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 
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 
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
412	Revenues from Electric Plant Leased to Others
413	Expenses of Electric Plant Leased to Others
414	Other Utility Operating Income

 1767.22  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

 1767.23  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

 1767.24  Extraordinary Items

434	Extraordinary Income
435	Extraordinary Deductions
435.1	Cumulative Effect on Prior Years of a Change in
	  Accounting Principle 

 1767.25  Retained earnings

433	[Reserved]
436	[Reserved]
437	[Reserved]
438	[Reserved]
439	[Reserved]

 1767.26  Operating Revenue

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

Other Operating Revenues

450	Forfeited Discounts
451	Miscellaneous Service Revenues
453	Sales of Water and Water Power
454	Rent from Electric Property
455	Interdepartmental Rents
456	Other Electric Revenues

 1767.27  Operation and Maintenance Expense

Steam Power Generation Operations

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

Steam Power Generation Maintenance

510	Maintenance Supervision and Engineering
511	Maintenance of Structures
512	Maintenance of Boiler Plant
513	Maintenance of Electric Plant
514	Maintenance of Miscellaneous Steam Plant

Nuclear Power Generation Operations

517	Operation Supervision and Engineering
518	Nuclear Fuel Expense
519	Coolants and Water
520	Steam Expenses
521	Steam from Other Sources
522	Steam Transferred - Credit
523	Electric Expenses
524	Miscellaneous Nuclear Power Expenses
525	Rents

Nuclear Power Generation Maintenance

528	Maintenance Supervision and Engineering
529	Maintenance of Structures
530	Maintenance of Reactor Plant Equipment
531	Maintenance of Electric Plant
532	Maintenance of Miscellaneous Nuclear Plant

Hydraulic Power Generation Operations

535	Operation Supervision and Engineering
536	Water for Power
537	Hydraulic Expenses
538	Electric Expenses
539	Miscellaneous Hydraulic Power Generation Expenses
540	Rents

Hydraulic Power Generation Maintenance

541	Maintenance Supervision and Engineering
542	Maintenance of Structures
543	Maintenance of Reservoirs, Dams, and Waterways
544	Maintenance of Electric Plant
545	Maintenance of Miscellaneous Hydraulic Plant

Other Power Generation Operations

546	Operation Supervision and Engineering
547	Fuel
548	Generation Expenses
549	Miscellaneous Other Power Generation Expenses
550	Rents

Other Power Generation 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

Other Power Supply Expenses

555	Purchased Power
556	System Control and Load Dispatching
557	Other Expenses

Transmission Operation Expenses

560	Operation Supervision and Engineering
561	Load Dispatching
562	Station Expenses
563	Overhead Line Expenses
564	Underground Line Expenses
565	Transmission of Electricity by Others
566	Miscellaneous Transmission Expenses
567	Rents

Transmission Maintenance Expenses

568	Maintenance Supervision and Engineering
569	Maintenance of Structures
570	Maintenance of Station Equipment
571	Maintenance of Overhead Lines
572	Maintenance of Underground Lines
573	Maintenance of Miscellaneous Transmission Plant

Distribution Operations Expenses

580	Operation Supervision and Engineering
581	Load Dispatching
582	Station Expenses
583	Overhead Line Expenses
584	Underground Line Expenses
585	Street Lighting and Signal System Expenses
586	Meter Expenses
587	Customer Installations Expenses
588	Miscellaneous Distribution Expenses
589	Rents

Distribution Maintenance Expenses

590	Maintenance Supervision and Engineering
591	Maintenance of Structures
592	Maintenance of Station Equipment
593	Maintenance of Overhead Lines
594	Maintenance of Underground Lines
595	Maintenance of Line Transformers
596	Maintenance of Street Lighting and Signal Systems
597	Maintenance of Meters
598	Maintenance of Miscellaneous Distribution Plant

 1767.28  Customer Accounts Expenses

Customer Accounts Operations Expenses

901	Supervision
902	Meter Reading Expenses
903	Customer Records and Collection Expenses
904	Uncollectible Accounts
905	Miscellaneous Customer Accounts Expenses

 1767.29  Customer Service and Informational Expenses

907	Supervision
908	Customer Assistance Expenses
909	Informational and Instructional Advertising Expenses
910	Miscellaneous Customer Service and Informational
	  Expenses

 1767.30  Sales Expenses

911	Supervision
912	Demonstrating and Selling Expenses
913	Advertising Expenses
916	Miscellaneous Sales Expenses

 1767.31  Administrative and General Expenses

Administrative and General Operations Expenses

920	Administrative and General Salaries
921	Office Supplies and Expenses
922	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

Administrative and General Maintenance Expenses

935	Maintenance of General Plant

 1767.32 - 1767.40 [Reserved]

 1767.41 Accounting Methods and Procedures Required of All
            RUS Borrowers

 101	Work Order Procedures
 102	Line Conversion
 103	Sacrificial Anodes and the Replacement of a Neutral
 104	Terminal Facilities
 105	Pole Top Disconnect Switch
 106	Steel Pole Reinforcers
 107	Mobile Substations
 108	Security Lights
 109	Joint Use
 110	First Clearing and Grading of Land and Rights of Way
 111	Engineering Contracts for System Planning
 112	Determination of Availability of Service
 113	Temporary Facilities (Services)
 114	Construction Work in Progress Damaged or Destroyed by
	  Storm
 115	Liquidated Damages
 116	Nonrefundable Payments for Construction
 117	Refunds of Overpayments for Materials and Supplies
 118	Load Control Equipment
 119	Special Equipment
 120	Meter Sockets and Meters
 121	Minimum - Maximum Voltmeters
 122	Retrofitting Demand Meters
 123	Transformer Conversions
 124	Transclosures
 125	Retirement Units
 126	Establishment of Continuing Property Records
 127	Continuing Property Records for Buildings
 128	Sale of Property
 129	Gain or Loss on the Sale of an Office Building
 130	Salvage and Obsolete Material
 131	Plant Acquisition Adjustments
 132	General Plant
 133	Plant Abandonments and Disallowances of Plant Costs
 134	Utility Plant Phase-in Plans
 135	Accounting for Removal or Relocation of Electric
	  Facilities Resulting from the Action of Others
 136	Storm Damage
 137	Impairment of Long-Lived Assets
 138	Automatic Meter Reading Systems - Turtles
 139	Global Positioning Systems
 140	Radio-Based Automatic Meter Reading Systems
 201	Supplemental Financing
 301	Forfeited Customers' Deposits
 401	Computer Software Costs
 402	Legal Expenses
 403	Leases
 404	Consolidated Financial Statements
 501	Patronage Capital Assignments
 502	Patronage Capital Retirements
 503	Operating and Nonoperating Margins
 504	Patronage Capital from G&T Cooperatives
 505	Patronage Capital Furnished by Other Cooperative
	  Service Organizations
 506	Forfeited Membership Fees
 601	Employee Benefits
 602	Compensated Absences
 603	Employee Retirement and Group Insurance
 604	Deferred Compensation
 605	Life Insurance Premium on Life of a Borrower Employee
 606	Pension Costs
 607	Unproductive Time
 608	Training Costs, Attendance at Meetings, etc.
 609	Maintenance and Operations
 610	Financial Forecast
 611	Advertising Expense
 612	Special Power Cost Study
 613	Mapping Costs
 614	Member Relations Costs
 615	Statewide Fees
 616	Power Supply/Distribution Cooperative Borrowings
 617	Rate Discount Allowed by Power Cooperative to
	  Distribution Cooperative Owning Connecting
	  Transmission Lines
 618	Theft Losses not Covered by Insurance
 619	Self Billing
 620	Purchase Rebates
 621	Integrity Fund
 622	In-Substance Defeasance
 623	Satellite or Cable Television Services
 624	Pollution Control Bonds
 625	Prepayment of Debt
 626	Rural Economic Development Loan and Grant Program
 627	Postretirement Benefits
 628	Postemployment Benefits
 629	Investments in Debt and Equity Securities
 630	Split Dollar Life Insurance
 631	Special Early Retirement Plan

INDEX:
          Accounting
          Uniform System of Accounts

ABBREVIATIONS

CFC                 National Rural Utilities Cooperative Finance
                      Corporation
CTCs                Capital Term Certificates
GAAP                Generally Accepted Accounting Principles
G&T                 Generation and Transmission
kW                  Kilowatts
kWh                 Kilowatt-hours
RD&D                Research, Development, and Demonstration
RUS                 Rural Utilities Service
SFAS                Statement of Financial Accounting Standards
Statement No. 43    Accounting for Compensated Absences
Statement No. 71    Accounting for the Effects of Certain Types
                      of Regulation
Statement No. 87    Employers' Accounting for Pensions
Statement No. 90    Regulated Enterprises - Accounting for
                      Abandonments
Statement No. 92    Regulated Enterprises - Accounting for
                      Phase-in Plans
Statement No. 94    Consolidation of All Majority-Owned
                      Subsidiaries
Statement No. 106   Employers' Accounting for Postretirement
                      Benefits Other than Pensions
USoA                Uniform System of Accounts

 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.

  Capital lease is a lease of property used in utility or 
nonutility operations, which meets one or more of the criteria 
stated in  1767.15 (s).

  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;
  (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.

  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 no-par 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.

  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.

  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.

  Operating lease is a lease of property used in utility or 
nonutility operations, which does not meet any of the criteria 
stated in  1767.15 (s).

  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.

  RUS is the Rural Utilities Service, an agency of the United 
States Department of Agriculture, or its successor.

  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.

  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.

  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.

  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 serves as the basis for the accounts or subaccounts in 
which costs are recorded.

 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 RUS 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
 1767.18 -  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.

 1767.13  DEPARTURES FROM THE PRESCRIBED RUS UNIFORM SYSTEM OF
             ACCOUNTS:

  (a) No departures are to be made to the prescribed RUS USoA 
without the prior written approval of RUS.  RUS grants a 
departure to any borrower electing to delay implementation of the 
functional (activity-based) accounting requirements of this part 
through December 31, 1997.  Requests for departures from the RUS 
USoA shall be addressed, in writing, to the Director, Program 
Accounting Services Division (PASD).

  (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 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) 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.

 1767.14  INTERPRETATIONS OF THE RUS UNIFORM SYSTEM OF ACCOUNTS:

To maintain uniformity in accounting, borrowers must submit 
questions concerning interpretations of the RUS USoA, in writing, 
to the Director, BAD, for consideration and decision.

(Approved by the Office of Management and Budget under control 
number 0572-0002.)

 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.

  (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 
of RUS in 7 CFR chapter XVII.

  (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) All amounts included in the accounts prescribed herein for 
electric plant and operating expenses shall be just and 
reasonable and any payments or accruals by the utility in excess 
of just and reasonable charges shall be included in
Account 426.5, Other Deductions.

  (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:
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.

  (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 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.

  (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, 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 assumed 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 long-term 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 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 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 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 property 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, and Account 120.6, 
Nuclear Fuel Under Capital Leases; as appropriate, and an 
obligation in Account 227, Obligations Under Capital Leases - 
Noncurrent, or Account 243, Obligations Under Capital
Leases - Current, at an amount equal to the present value at the 
beginning of the lease term of minimum lease payments during the 
lease term, excluding that portion of the payments representing 
executory costs such as insurance, maintenance, and taxes to be 
paid by the lessor, together with any profit thereon.  However, 
if the amount so determined exceeds the fair value of the leased 
property at the inception of the lease, the amount recorded as 
the asset and obligation shall be the fair value.

  (3) 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.

  (4) 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 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 exchange-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.

 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 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.

  (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.

  (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.

  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 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 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 
casualty, 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:

  Ai=  Gross allowance for borrowed funds used during 
construction rate.
  Ac=  Allowance for other funds used during construction rate.
   S=  Average short-term debt.
   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.

  (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 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.

  (d) Overhead construction costs.

  (1) All overhead construction costs, such as 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 Purchased 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 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.)

  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 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 rights-of-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 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 
appraised 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;

  (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 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;

  (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 example, $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 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 
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 Limited-Term 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.

  (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.

  Note:  Stations which change electricity from transmission to 
distribution voltage shall be classified as distribution 
stations.

  (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.

 1767.17  OPERATING EXPENSE INSTRUCTIONS:

  (a) Supervision and engineering.  The supervision and 
engineering includible in the operating expense accounts shall 
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);

  (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 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.

 1767.18  ASSETS AND OTHER DEBITS:

  The asset and other debits accounts identified in this section 
shall be used by all RUS borrowers.

ASSETS AND OTHER DEBITS

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
109	[Reserved]
110	[Reserved]
111	Accumulated Provision for Amortization of Electric
	  Utility Plant
112	[Reserved]
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

Other Property and Investments

121	Nonutility Property
122	Accumulated Provision for Depreciation and Amortization
	  of Nonutility Property
123	Investment in Associated Companies
123.1	Patronage Capital from Associated Cooperatives
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 
123.3	Investment in Associated Organizations - Federal
	  Economic Development Loans
123.4	Investment in Associated Organizations - Non-Federal
	  Economic Development Loans
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

Current and Accrued Assets

131	Cash
131.1	Cash - General 
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
131.2	Cash - Construction Fund - Trustee 
131.3	Cash - Installation Loan and Collection Fund 
131.4	Transfer of Cash 
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
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

Deferred Debits

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).)

101.1	Property Under Capital Leases.

	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.

102	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	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, Depreciation Expense, 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.  
However, 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.

104	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 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.

	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.

106	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 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

108	Accumulated Provision for Depreciation of Electric
	  Utility Plant.

	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.  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

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.

109	[Reserved]

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 accounts.  
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.

112	[Reserved]

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, 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.

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	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.

	Note:  The provisions of this account shall not be 
construed as approving or authorizing the recording of 
appreciation of electric plant.

118	Other Utility Plant.

This account shall include the balances in accounts for utility 
plant, other than electric plant, such as gas, or railway.

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.

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.

120.2	Nuclear Fuel Materials and Assemblies - Stock Account.

	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 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	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	Spent Nuclear Fuel.

	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.

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 by-products.

	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 disposed.
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.

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

121	Nonutility Property.

	A.	This account shall include the book cost of land, 
structures, equipment, or other tangible or intangible property 
owned by the utility, but not used in utility service and not 
properly includible in Account 105, Electric Plant Held for 
Future Use.

	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 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.

	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.

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.

	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 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.

	C.	Account 123 shall be subaccounted as follows:

123.1	Patronage Capital from Associated Cooperatives
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
123.3	Investment in Associated Organizations - Federal Economic
	  Development Loans
123.4	Investment in Associated Organizations - Non-Federal
	  Economic Development Loans

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.

123.11	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.

	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.

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.

123.22	Investments in Capital Term Certificates - Supplemental
	  Financing.

This account shall include paid subscriptions in capital term 
certificates of CFC or other supplemental lenders.

123.23	Other Investments in Associated Organizations.

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.
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.

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.

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.

124	Other Investments.

	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.  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.

	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.

	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

124.1	Other Investments - Federal Economic Development Loans.

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.

124.2	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.

125	Sinking Funds.

This account shall include the amount of cash and book cost of 
investments held in sinking funds.  A separate account, with 
appropriate title, shall be kept for each sinking fund.  
Transfers from this account to special deposit accounts, may be 
made as necessary for the purpose of paying matured sinking fund 
obligations, or obligations called for redemption but not 
presented, or the interest thereon.

126	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.

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 elsewhere.  A separate account, 
with appropriate title, shall be kept for each fund.

	Note:  Amounts deposited with a trustee under the terms 
of an irrevocable trust agreement for pensions or other employee 
benefits shall not be included in this account.

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.

	A.	This account shall include the amount of current cash 
funds except working funds.

	B.	Account 131 shall be subaccounted as follows:

131.1	Cash - General
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
131.2	Cash - Construction Fund - Trustee
131.3	Cash - Installation Loan and Collection Fund
131.4	Transfer of Cash

131.1	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.

131.12	Cash - General - Economic Development Loan 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.

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 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.

131.2	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 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.

131.3	Cash - Installation Loan and Collection Fund.

	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.

131.4	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.

132	Interest Special Deposits.

This account shall include special deposits with fiscal agents or 
others for the payment of interest.

133	Dividend Special Deposits.

This account shall include special deposits with fiscal agents or 
others for the payment of dividends.

134	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.

	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	Working Funds.

This account shall include cash advanced to officers, agents, 
employees, and others as petty cash or working funds.

136	Temporary Cash Investments.

	A.	This account shall include the book cost of 
investments, such as demand and time loans, bankers' acceptances, 
United States Treasury certificates, marketable securities, and 
other similar investments, acquired for the purpose of 
temporarily investing cash.

	B.	This account shall be so maintained as to show 
separately temporary cash investments in securities of associated 
companies and of others.  Records shall be kept of any pledged 
investments.

141	Notes Receivable.

	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.)

	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.

	B.	Account 141 shall be subaccounted as follows:

141.1	Accumulated Provision for Uncollectible Notes - Credit

141.1	Accumulated Provision for Uncollectible Notes - Credit.

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:

142.1	Customer Accounts Receivable - Electric
142.2	Customer Accounts Receivable - Other

142.1	Customer Accounts Receivable - Electric.

This account shall include amounts due from customers for utility 
service.

142.2	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	Accumulated Provision for 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:

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

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.

144.2	Accumulated Provision for Uncollectible Merchandising
	  Accounts - Credit.

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.

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.

144.4	Accumulated Provision for Other Uncollectible Accounts -
	  Credit.

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	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.

	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.

146	Accounts Receivable from Associated Companies.

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	Fuel Stock.

This account shall include the book cost of fuel on hand.

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	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.
		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.

153	Residuals.

This account shall include the book cost of any residuals 
produced in the production or manufacturing processes.

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, first-in-first-out, or such 
other method of inventory accounting as conforms with accepted 
accounting standards consistently applied.

Items

		1.	Invoice price of materials less cash or other 
discounts.
		2.	Freight, switching, or other transportation 
charges when practicable to include as part of the cost of 
particular materials to which they relate.
		3.	Customs duties and excise taxes.
		4.	Costs of inspection and special tests prior to 
acceptance.
		5.	Insurance and other directly assignable charges.

		Note:  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	Other Materials and Supplies.

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	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	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 concurrent 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.

158.2	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.

163	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.

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 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.

	Note:  A physical inventory of each class of materials 
and supplies shall be made at least every two years.

165	Prepayments.

	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:

165.1	Prepayments - Insurance
165.2	Other Prepayments

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.

Deferred Debits

181	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	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.

	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.

182.3	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 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.

183	Preliminary Survey and Investigation Charges.

	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 in
Account 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 
several charges.

	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	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	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 Account 451, Miscellaneous Service Revenues.

186	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.

187	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.)

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.

189	Unamortized Loss on Reacquired Debt.

This account shall include the losses on long-term debt 
reacquired or redeemed.  The amounts in this account shall be 
amortized in accordance with  1767.15 (q).

190	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 
disposed of as RUS may authorize or direct.  (See  1767.15 (t).)

 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	[Reserved]
203	[Reserved]
204	[Reserved]
205	[Reserved]
206	[Reserved]
207	[Reserved]
208	Donated Capital
209	[Reserved]
210	[Reserved]
211	Consumers' Contributions for Debt Service 
212	[Reserved]
213	[Reserved]
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 
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
225	Unamortized Premium on Long-Term Debt
226	Unamortized Discount on Long-Term Debt - Debit

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

Current and Accrued Liabilities

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
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

LIABILITIES AND OTHER CREDITS

Margins and Equities

200	Memberships.

	A.	This account shall include the total amount of 
memberships issued and subscribed.

	B.	Account 200 shall be subaccounted as follows:

200.1	Memberships Issued
200.2	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.

	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	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	Patronage Capital Credits
201.2	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	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.

202	[Reserved]

203	[Reserved]

204	[Reserved]

205	[Reserved]

206	[Reserved]

207	[Reserved]

208	Donated Capital.

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.

209	[Reserved]

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 long-term 
debt.

212	[Reserved]

213	[Reserved]

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.

215.1	Unrealized Gains and Losses - Debt and Equity Securities.

This account shall include the unrealized holding gains and 
losses for available-for-sale securities.

216	[Reserved]

216.1	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.

217	Retired Capital Credits - Gain.

	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	Capital Gains and Losses.

No entries shall be made to this account without the prior 
approval of REA 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.

	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	Operating Margins.

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	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	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.

219.4	Other Margins and Equities - Prior Periods.

	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 REA 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.

Long-Term Debt

221	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.

222	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).)

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 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	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 long-term debt, and other obligations 
maturing more than one year from the date of issue or assumption.

	B.	Account 224 shall be subaccounted as follows:

224.1	Long-Term Debt - REA Construction Loan Contract
224.2	REA Loan Contract - Construction - Debit
224.3	Long-Term Debt - REA Construction Notes Executed
224.4	REA Notes Executed - Construction - Debit
224.5	Interest Accrued - Deferred - REA Construction
224.6	Advance Payments Unapplied - REA Long-Term Debt - Debit
224.7	Long-Term Debt - Installation Loan Contract
224.8	REA Loan Contract - Installation - Debit
224.9	Long-Term Debt - Installation Notes Executed
224.10	REA 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 - REA Economic Development Notes Executed
224.17	REA Notes Executed - Economic Development - Debit

224.1	Long-Term Debt - REA Construction Loan Contract.

	A.	This account shall include the contractual obligation 
to REA 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.

224.2	REA Loan Contract - Construction - Debit.

	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.

224.3	Long-Term Debt - REA Construction Notes Executed.

This account shall include the contractual liability to REA 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	REA Notes Executed - Construction - Debit.

This account shall include the total amount of the unadvanced REA 
loans for construction purposes, which are covered by executed 
notes.  When advances are received from the  REA 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 - REA Construction.

This account shall include interest on REA construction 
obligations deferred by the terms of mortgage notes or extension 
agreements.

224.6	Advance Payments Unapplied - REA 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 REA 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.

224.8	REA Loan Contract - Installation - Debit.

	A.	This account shall include the total loans for 
installation 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.

224.9	Long-Term Debt - Installation Notes Executed.

This account shall include the contractual liability to REA on 
installation notes executed.

224.10	REA Notes Executed - Installation - Debit.

This account shall include the total amount of unadvanced loans 
for installation purposes, which are covered by executed note.  
When advances are received from REA, 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.

This account shall include the contractual obligation to purchase 
CFC Capital Term Certificates and any other similar obligation 
relating to supplemental financing.

224.12	Other Long-Term Debt - Supplemental Financing.

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.

224.13	Supplemental Financing Notes Executed - Debit.

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.

224.14	Other Long-Term Debt - Miscellaneous.

This account shall include the amount of other long-term debt not 
provided for elsewhere.

224.15	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, Cash - Construction Fund - 
Trustee, debited with the amount of cash so advanced.

224.16	Long-Term Debt - REA Economic Development Notes Executed.

This account shall include the contractual liability to REA 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.

224.17	REA Notes Executed - Economic Development - Debit.

This account shall include the total amount of the unadvanced REA 
loans for rural economic development purposes, which are covered 
by executed notes.  When advances are received from the REA 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.

225	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).)

226	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).)

Other Noncurrent Liabilities

227	Obligations Under Capital Leases - Noncurrent.

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	Accumulated Provision for Property Insurance.

	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 Injuries and Damages.

	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.

	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.

228.3	Accumulated Provision for Pensions and Benefits.

	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.

	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.

228.4	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 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.

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 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.

231	Notes Payable.

This account shall include the face value of all notes, drafts, 
acceptances, or other similar evidences of indebtedness, payable 
on demand or within a time not exceeding 1 year from the date of 
issue, to other than associated companies.

232	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:

232.1	Accounts Payable - General
232.2	Accounts Payable - REA Construction
232.3	Accounts Payable - Other

233	Notes Payable to Associated Companies.

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.

	Note:  Notes which are includible in Account 223, 
Advances from Associated Companies, shall be excluded from this 
account.

234	Accounts Payable to Associated Companies.

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.

235	Customer Deposits.

This account shall include all amounts deposited with the utility 
by its customers as security for the payment of bills.

236	Taxes Accrued.

	A.	This account shall be credited with the amount of 
taxes accrued during the accounting period, corresponding debits 
being made to the appropriate accounts for tax charges.  Such 
credits may be based upon estimates, but from time to time during 
the year as the facts become known, the amount of the periodic 
credits shall be adjusted so as to include, as nearly as can be 
determined in each year, the taxes applicable thereto.  Any 
amount representing a prepayment of taxes applicable to the 
period subsequent to the date of the balance sheet, shall be 
shown under Account 165, Prepayments.

	B.	If accruals for taxes are found to be insufficient or 
excessive, correction therefor shall be made through current tax 
accruals.

	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

237	Interest Accrued.

This account shall include the amount of interest accrued but not 
matured on all liabilities of the utility not including, however, 
interest which is added to the principal of the debt on which 
incurred.  Supporting records shall be maintained so as to show 
the amount of interest accrued on each obligation.

238	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	Patronage Capital Payable.

This account shall include the amount of patronage capital which 
has been authorized to be returned to the patron.

238.2  Patronage Refunds Payable.

This account shall include the amount of patronage refunds which 
have been authorized to be paid to patrons.

239	Matured Long-Term Debt.

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.

240	Matured Interest.

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	Tax Collections Payable.

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.

	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	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
242.4	Accrued Insurance
242.5	Other Current and Accrued Liabilities

242.1	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.

242.2	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.

242.3	Accrued Employees' Vacations and Holidays.

This account shall include the liability for accrued wages for 
employees' vacation, holidays, and sick leave.

242.4	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.

242.5	Other Current and Accrued Liabilities.

This account shall include current and accrued liabilities not 
provided for elsewhere.

243	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.

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	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	Other Deferred Credits - Consumers' Energy Prepayments.

This account shall include the amount of advance payments made by 
consumers in connection with electric service.

254	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 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.

255	Accumulated Deferred Investment Tax Credits.

	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 REA.

	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 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	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	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 identification of 
items relating to each utility deductions.

281	Accumulated Deferred Income Taxes - Accelerated
	  Amortization Property.

	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 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	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 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.

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.

	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.

 1767.20  PLANT ACCOUNTS:

  The plant accounts identified in this section shall be used by 
all RUS borrowers.

Intangible Plant

301	Organization
302	Franchises and Consents
303	Miscellaneous Intangible Plant

Steam Production Plant

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

Nuclear Production Plant

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

Hydraulic Production Plant

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

Other Production Plant

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

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

Distribution Plant

360	Land and Land Rights
361	Structures and Improvements
362	Station Equipment
363	Storage Battery Equipment
364	Poles, Towers and Fixtures
365	Overhead Conductors and Devices
366	Underground Conduit
367	Underground Conductors and Devices
368	Line Transformers
369	Services
370	Meters
371	Installations on Customers' Premises
372	Leased Property on Customers' Premises
373	Street Lighting and Signal Systems

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

Intangible Plant

301	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 public-utility 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 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 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.

302	Franchises and Consents.

	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.

	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.

Steam Production Plant

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.
		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.

	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.

Items

		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	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 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).

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.

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, 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, truck-type 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.

	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	Miscellaneous Power Plant Equipment.

This account shall include the cost installed of miscellaneous 
equipment in and 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.

Nuclear Production Plant

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).)

	Note:  Include vapor containers and nuclear production 
roads and railroads in this account.

322	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.
  	   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.

	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.
  	   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	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:  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.

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, 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, 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, truck-type 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.

	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.

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 nuclear-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 
and site 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 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.

	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.

Hydraulic Production Plant

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	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	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 electricity.  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, water-
hammer 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.

333	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 draft-tube 
supports.
		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 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	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 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.

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 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, truck-type 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.

	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.

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.	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, 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.

	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.

336	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.

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.

	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 activities, 
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.

Other Production Plant

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	Fuel Holders, Producers, and Accessories.

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.

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.

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

		1.	Air-filtering system.
		2.	Belting, shafting, pulleys, and reduction 
gearing.
		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	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 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, trunk-type 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.

	Note A:  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.

	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	Miscellaneous Power Plant Equipment.

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.

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.

	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.

Transmission Plant

350	Land and Land Rights.

This account shall include the cost of land and land rights used 
in connection with transmission operations.  (See
 1767.16 (g).)

351	[Reserved]

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).)

353	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

		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.

354	Towers and Fixtures.

This account shall include the cost installed of towers and 
appurtenant fixtures used for supporting overhead transmission 
conductors.

Items

		1.	Anchors, guys, and braces.
		2.	Brackets.
		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	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	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 Conduit.

This account shall include the cost installed of underground 
conduit and tunnels used for housing transmission cables or 
wires.  (See  1767.16 (n).)

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.
		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.

358	Underground Conductors and Devices.

This account shall include the cost installed of underground 
conductors and devices used for transmission purposes.

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.

359	Roads and Trails.

This account shall include the cost of roads, trails, and bridges 
used primarily as transmission facilities.

Items

	1.	Bridges, including foundation piers, girders, 
trusses, and flooring.
	2.	Clearing land.
	3.	Roads, including grading, surfacing, and 
culverts.
	4.	Structures, constructed and maintained in 
connection with items included herein.
	5.	Trails, including grading, surfacing, and 
culverts.

	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.

Distribution Plant

360	Land and Land Rights.

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	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	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.
	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 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.

363	Storage Battery Equipment.

This account shall include the cost installed of storage battery 
equipment used for the purpose of supplying electricity to meet 
emergency or peak demands.

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.

	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.

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.	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	Overhead Conductors and Devices.

This account shall include the cost installed of overhead 
conductors and devices used for distribution purposes.

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.

	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 Conduit.

This account shall include the cost installed of underground 
conduit and tunnels used for housing distribution cables or 
wires.

Items

	1.	Conduit, concrete, brick and 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.
	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.

	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.

367	Underground Conductors and Devices.

This account shall include the cost installed of underground 
conductors and devices used for distribution purposes.

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, 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.

	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.

368	Line Transformers.

	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.	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	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.

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.

370	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.

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.

	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.

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.	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.

	Note:  Do not include in this account any costs incurred 
in connection with merchandising, jobbing, or contract work 
activities.

372	Leased Property on Customers' Premises.

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.

	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	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.

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	Structures and Improvements.

This account shall include the cost, in place, of structures and 
improvements used for utility purposes, the cost of which is not 
properly includible in other structures and improvements 
accounts.  (See  1767.16 (h).)

391	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.

392	Transportation Equipment.

This account shall include the cost of transportation vehicles 
used for utility purposes.

Items

		1.	Airplanes.
		2.	Automobiles.
		3.	Bicycles.
		4.	Electrical vehicles.
		5.	Motor trucks.
		6.	Motorcycles.
		7.	Repair cars or trucks.
		8.	Tractors and trailers.
		9.	Other transportation vehicles.

393	Stores Equipment.

This account shall include the cost of equipment used for the 
receiving, shipping, handling, and storage of materials and 
supplies.

Items

		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.

394	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.

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.
    	   19.	Hoists.
    	   20.	Ladders.
    	   21.	Lathes.
    	   22.	Machine tools.
    	   23.	Motor-driven tools.
    	   24.	Motors.
    	   25.	Pipe threading and cutting tools.
    	   26.	Pneumatic tools.
    	   27.	Pumps.
    	   28.	Riveters.
    	   29.	Smithing equipment.
   	   30.	Tool racks.
    	   31.	Vises.
    	   32.	Welding apparatus.
    	   33.	Work benches.

395	Laboratory Equipment.

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.

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.

396	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.	Air compressors, including driving unit and 
vehicle.
		2.	Back filling machines.
		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.

397	Communication Equipment.

This account shall include the cost installed of telephone, 
telegraph, and wireless equipment for general use in connection 
with utility operations.
Items

		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.

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.

Items

		1.	Hospital and infirmary equipment.
		2.	Kitchen equipment.
		3.	Employees' recreation equipment.
		4.	Radios.
		5.	Restaurant equipment.
		6.	Soda fountains.
		7.	Operators' cottage furnishings.
		8.	Other miscellaneous equipment.

	Note:  Miscellaneous equipment of the nature indicated 
above wherever practicable, shall be included in the utility 
plant accounts on a functional basis.

399	Other Tangible Property.

This account shall include the cost of tangible utility plant not 
provided for elsewhere.

 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 
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 
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
412	Revenues from Electric Plant Leased to Others
413	Expenses of Electric Plant Leased to Others
414	Other Utility Operating Income

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 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.

	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.

	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

404	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, limited-term interests in 
land, and expenditures on leased property where the service life 
of the improvements is terminable by action of the lease.  The 
charges to this account shall be such as to distribute the book 
cost of each investment as evenly as may be over the period of 
its benefit to the utility.  (See Account 111, Accumulated 
Provision for Amortization of Electric Utility Plant.)

405	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 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.

406	Amortization of Electric Plant Acquisition Adjustments.

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.

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	Regulatory Debits.

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.

407.4	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.

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 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.

	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.

	D.	Account 408 shall be subaccounted as follows:

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
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:  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.

409.2	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.

410	[Reserved]

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	Provision for Deferred Income Taxes, Utility Operating
	  Income.

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	Provision for Deferred Income Taxes, Other Income and
	  Deductions.

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	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.

This account shall include the amounts of those allocations of 
deferred taxes and deferrals of taxes, credit, which relate to 
Other Income and Deductions.

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 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.

411.4	Investment Tax Credit Adjustments, Utility Operations.

This account shall include the amount of those investment tax 
credit adjustments related to property used in Utility Operations 
(by department).

411.5	Investment Tax Credit Adjustments, Nonutility
	  Operations.

This account shall include the amount of those investment tax 
credit adjustments related to property used in Nonutility 
Operations.

411.6	Gains from Disposition of Utility Plant.

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.

411.7	Losses from Disposition of Utility Plant.

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.

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	Losses from Disposition of Allowances.

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.

412	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.	Operation.
		2.	Maintenance.
		3.	Depreciation.
		4.	Amortization.

	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.

414	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.

	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.

 1767.22  OTHER INCOME AND DEDUCTIONS:

  The other income and deductions accounts identified in this 
section shall be used by all RUS borrowers.

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

Other Income and Deductions

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 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.

	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.

	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.

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.
    	   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.

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:  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.

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 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.	Operation.
		2.	Maintenance.
		3.	Rents.
		4.	Depreciation.
		5.	Amortization.

	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.

This account shall include the utility's equity in the earnings 
or losses of subsidiary companies for the year.

419	Interest and Dividend Income.

	A.	This account shall include interest revenues on 
securities, loans, notes, advances, special deposits, tax 
refunds, and all other interest-bearing assets, and dividends on 
stocks of other companies, whether the securities on which the 
interest and dividends are received are carried as investments or 
included in sinking or other special fund accounts.

	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	Allowance for Funds Used During Construction.

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).)

420	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	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.

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).)

421.1	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 (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	Loss on Disposition of Property.

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	Nonoperating Taxes.

This account shall be charged with taxes relating to nonoperating 
income.

423	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	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	Miscellaneous Amortization.

This account shall include amortization charges not includible in 
other accounts which are properly deductible in determining the 
income of the utility before interest charges.  Charges 
includible herein, if significant in amount, must be in 
accordance with an orderly and systematic amortization program.

Items

		1.	Amortization of utility plant acquisition 
adjustments, or of intangibles included in utility plant in 
service when not authorized to be included in utility operating 
expenses by RUS.
		2.	Other miscellaneous amortization charges allowed 
to be included in this account by RUS.

426	[Reserved]

SPECIAL INSTRUCTIONS

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.

426.1	Donations.

This account shall include all payments or donations for 
charitable, social, or community welfare purposes.

426.2	Life Insurance.

This account shall include all payments for life insurance of 
officers and employees where the company is the beneficiary (net 
premiums less the increase in the cash surrender value of 
policies.)

426.3	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.

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.

426.5	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.

Items

		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.

 1767.23  INTEREST CHARGES:

  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

Interest Charges

427	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.

	Note:  This account shall not include interest on 
nominally issued or nominally outstanding long-term debt, 
including securities assumed.

427.3  Interest Charged to Construction - Credit.

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	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.

428.1	Amortization of Loss on Reacquired Debt.

	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).)

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	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).)

430	Interest on Debt to Associated Companies.

	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	Other Interest Expense.

This account shall include all interest charges not provided for 
elsewhere.

Items

		1.	Interest on notes payable on demand or maturing 
one year or less from date and on open accounts, except notes and 
accounts with associated companies.
		2.	Interest on customers' deposits.
		3.	Interest on claims and judgments, tax 
assessments, and assessments for public improvements past due.
		4.	Income and other taxes levied upon bondholders of 
the utility and assumed by it.

432	Allowance for Borrowed Funds Used During Construction -
	  Credit.

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).

 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 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 
to the amounts recorded in this account shall be recorded in 
Account 409.3, Income Taxes, Extraordinary Items.  (See
 1767.15 (g).)

435	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).)

435.1	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.

 1767.25  RETAINED EARNINGS:

  The retained earnings accounts identified in this section shall 
be used by all RUS borrowers.

Retained Earnings

433	[Reserved]
436	[Reserved]
437	[Reserved]
438	[Reserved]
439	[Reserved]

Retained Earnings

433	[Reserved]

436	[Reserved]

437	[Reserved]

438	[Reserved]

439	[Reserved]

 1767.26  OPERATING REVENUE:

  The operating revenue accounts identified in this section shall 
be used by all RUS borrowers.

OPERATING REVENUE

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

Other Operating Revenues

450	Forfeited Discounts
451	Miscellaneous Service Revenues
453	Sales of Water and Water Power
454	Rent from Electric Property
455	Interdepartmental Rents
456	Other Electric Revenues

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 440 shall be subaccounted as follows:

440.1	Residential Sales - Excluding Seasonal
440.2	Residential Sales - Seasonal

440.1	Residential Sales - Excluding Seasonal.

	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.

	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.

440.2	Residential Sales - Seasonal.

This account shall include the net billings for electricity 
supplied for residential and domestic purposes to seasonal 
consumers.

441	Irrigation Sales.

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.

442	Commercial and Industrial Sales.

	A.	This account shall include the net billing for 
electricity supplied to customers for commercial and industrial 
purposes.

	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.

	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

442.1	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.

	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.

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.

444	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 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	Other Sales to Public Authorities.

	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	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.

	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.

	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	Sales for Resale - RUS Borrowers.

	A.	This account shall include the net billing for 
electricity supplied to RUS borrowers for resale.

	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	Sales for Resale - Other.

	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.

	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.

448	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.

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.

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.

451	Miscellaneous Service Revenues.

This account shall include revenues for all miscellaneous 
services and charges billed to customers which are not 
specifically provided for in other accounts.

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	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.

	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	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 interest or return and 
depreciation and taxes shall be credited to this account.

456	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.

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.	Revenues from transmission of electricity of 
others over transmission facilities of the utility.
		6.	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.

 1767.27  OPERATION AND MAINTENANCE EXPENSE:

  The operation and maintenance expense accounts identified in 
this section shall be used by all RUS borrowers.

OPERATION AND MAINTENANCE EXPENSE ACCOUNTS

Steam Power Generation Operations

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

Steam Power Generation Maintenance

510	Maintenance Supervision and Engineering
511	Maintenance of Structures
512	Maintenance of Boiler Plant
513	Maintenance of Electric Plant
514	Maintenance of Miscellaneous Steam Plant

Nuclear Power Generation Operations

517	Operation Supervision and Engineering
518	Nuclear Fuel Expense
519	Coolants and Water
520	Steam Expenses
521	Steam from Other Sources
522	Steam Transferred - Credit
523	Electric Expenses
524	Miscellaneous Nuclear Power Expenses
525	Rents

Nuclear Power Generation Maintenance

528	Maintenance Supervision and Engineering
529	Maintenance of Structures
530	Maintenance of Reactor Plant Equipment
531	Maintenance of Electric Plant
532	Maintenance of Miscellaneous Nuclear Plant

Hydraulic Power Generation Operations

535	Operation Supervision and Engineering
536	Water for Power
537	Hydraulic Expenses
538	Electric Expenses
539	Miscellaneous Hydraulic Power Generation Expenses
540	Rents

Hydraulic Power Generation Maintenance

541	Maintenance Supervision and Engineering
542	Maintenance of Structures
543	Maintenance of Reservoirs, Dams, and Waterways
544	Maintenance of Electric Plant
545	Maintenance of Miscellaneous Hydraulic Plant

Other Power Generation Operations

546	Operation Supervision and Engineering
547	Fuel
548	Generation Expenses
549	Miscellaneous Other Power Generation Expenses
550	Rents

Other Power Generation 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

Other Power Supply Expenses

555	Purchased Power
556	System Control and Load Dispatching
557	Other Expenses

Transmission Operation Expenses

560	Operation Supervision and Engineering
561	Load Dispatching
562	Station Expenses
563	Overhead Line Expenses
564	Underground Line Expenses
565	Transmission of Electricity by Others
566	Miscellaneous Transmission Expenses
567	Rents

Transmission Maintenance Expenses

568	Maintenance Supervision and Engineering
569	Maintenance of Structures
570	Maintenance of Station Equipment
571	Maintenance of Overhead Lines
572	Maintenance of Underground Lines
573	Maintenance of Miscellaneous Transmission Plant

Distribution Operations Expenses

580	Operation Supervision and Engineering
581	Load Dispatching
582	Station Expenses
583	Overhead Line Expenses
584	Underground Line Expenses
585	Street Lighting and Signal System Expenses
586	Meter Expenses
587	Customer Installations Expenses
588	Miscellaneous Distribution Expenses
589	Rents

Distribution Maintenance Expenses

590	Maintenance Supervision and Engineering
591	Maintenance of Structures
592	Maintenance of Station Equipment
593	Maintenance of Overhead Lines
594	Maintenance of Underground Lines
595	Maintenance of Line Transformers
596	Maintenance of Street Lighting and Signal Systems
597	Maintenance of Meters
598	Maintenance of Miscellaneous Distribution Plant

OPERATION AND MAINTENANCE EXPENSE ACCOUNTS

Steam Power Generation Operations

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).)

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 
boiler-house 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.

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.
		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 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.	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.
		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 high-pressure 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.

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.	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.	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 an 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.
		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)).

Steam Power Generation 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.
		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 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.)

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 Operations

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.

	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	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.	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.
		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 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.
		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.
		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	Rents.

This account shall include all rents of property of others used, 
occupied, or operated in connection with nuclear generation.  
(See  1767.17 (c).)

Nuclear Power Generation Maintenance

528	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 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	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	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 incurred 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 Power Generation Operations

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	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	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.
		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 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.	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).
		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.)
		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 right-of-way.  (See  1767.17 (c).)

Hydraulic Power Generation 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	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	Maintenance of Reservoirs, Dams, and Waterways.

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 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.

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 Operations

546	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	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.

548	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, 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 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.	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.
		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).)

Other Power Generation 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 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.

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 Account 561, Load Dispatching, and Account 581, Load 
Dispatching.

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 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 Operation Expenses

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	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, materials used, 
and expenses incurred in load dispatching operations pertaining 
to the transmission of electricity.

Items

		Labor:

		1.	Direct switching.
		2.	Arranging and controlling clearances for 
construction, maintenance, test, and emergency purposes.
		3.	Controlling system voltages.
		4.	Obtaining reports on the weather and special 
events.
		5.	Preparing operating reports and data for billing 
and budget purposes.

		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.

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.
		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	Overhead Line Expenses.

564	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:

		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.
		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	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-of-way.  (See  1767.17 (c).)

Transmission Maintenance Expenses

568	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 transmission system.  Direct 
field supervision of specific jobs shall be charged to the 
appropriate maintenance account.  (See  1767.17 (a).)

569	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).)

570	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

		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.
			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 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.

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.
			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 high-
voltage 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).)

Distribution Operations Expenses

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.
		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:

		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 expenses.

	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	Overhead Line Expenses.

584	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 purposes.
    	   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 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:

		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, 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' appliances, 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, 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 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).)

Distribution Maintenance Expenses

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:

		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, Underground 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.
		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:

		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.

 1767.28  CUSTOMER ACCOUNTS EXPENSES:

  The customer accounts expense accounts identified in this 
section shall be used by all RUS borrowers.

Customer Accounts Operations Expenses

901	Supervision
902	Meter Reading Expenses
903	Customer Records and Collection Expenses
904	Uncollectible Accounts
905	Miscellaneous Customer Accounts Expenses

Customer Accounts Operations Expenses

901	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	Meter Reading 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 reading 
customer meters, and determining consumption when performed by 
employees engaged in reading meters.

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:

		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.	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:

		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, 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 is 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.
		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.

 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

907	Supervision
908	Customer Assistance Expenses
909	Informational and Instructional Advertising Expenses
910	Miscellaneous Customer Service and Informational
	  Expenses

Customer Service and Informational Expenses

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.
		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 incurred 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.
		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.
	   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.

 1767.30  SALES EXPENSES:

  The sales expense accounts identified in this section shall be 
used by all RUS borrowers.

Sales Expenses

911	Supervision
912	Demonstrating and Selling Expenses
913	Advertising Expenses
916	Miscellaneous Sales Expenses

Sales Expenses

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 appliances 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.
		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 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.	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 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.

 1767.31  ADMINISTRATIVE AND GENERAL EXPENSES:

  The administrative and general expense accounts identified in 
this section shall be used by all RUS borrowers.

Administrative and General Operations Expenses

920	Administrative and General Salaries
921	Office Supplies and Expenses
922	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

Administrative and General Maintenance Expenses

935	Maintenance of General Plant

Administrative and Operations General

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 expenses 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.

Items

		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.

	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.

	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 activities 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.

	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.  Include, 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 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.
		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).)

Administrative and General Maintenance Expenses

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.

 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 
cooperatives 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.

Numerical Index

Number                          Title

 101	Work Order Procedures
 102	Line Conversion
 103	Sacrificial Anodes and the Replacement of a Neutral
 104	Terminal Facilities
 105	Pole Top Disconnect Switch
 106	Steel Pole Reinforcers
 107	Mobile Substations
 108	Security Lights
 109	Joint Use
 110	First Clearing and Grading of Land and Rights of Way
 111	Engineering Contracts for System Planning
 112	Determination of Availability of Service
 113	Temporary Facilities (Services)
 114	Construction Work in Progress Damaged or Destroyed by
	  Storm
 115	Liquidated Damages
Number                          Title

 116	Nonrefundable Payments for Construction
 117	Refunds of Overpayments for Materials and Equipment
 118	Load Control Equipment
 119	Special Equipment
 120	Meter Sockets and Meters
 121	Minimum - Maximum Voltmeters
 122	Retrofitting Demand Meters
 123	Transformer Conversions
 124	Transclosures
 125	Retirement Units
 126	Establishment of Continuing Property Records
 127	Continuing Property Records for Buildings
 128	Sale of Property
 129	Gain or Loss on the Sale of an Office Building
 130	Salvage and Obsolete Material
 131	Plant Acquisition Adjustments
 132	General Plant
 133	Plant Abandonments and Disallowances of Plant Costs
 134	Utility Plant Phase-in Plans
 135	Accounting for Removal or Relocation of Electric
	  Facilities Resulting from the Action of Others
 136	Storm Damage
 137	Impairment of Long-Lived Assets
 138	Automatic Meter Reading Systems-Turtles
 139	Global Positioning Systems
 140	Radio-Based Automatic Meter Reading Systems
 201	Supplemental Financing
 301	Forfeited Customers' Deposits
 401	Computer Software Costs
 402	Legal Expenses
 403	Leases
 404	Consolidated Financial Statements
 501	Patronage Capital Assignments
 502	Patronage Capital Retirements
 503	Operating and Nonoperating Margins
 504	Patronage Capital from G&T Cooperatives
 505	Patronage Capital Furnished by Other Cooperative
	  Service Organizations
 506	Forfeited Membership Fees
 601	Employee Benefits
 602	Compensated Absences
 603	Employee Retirement and Group Insurance
 604	Deferred Compensation
 605	Life Insurance Premium on Life of a Borrower Employee
 606	Pension Costs
 607	Unproductive Time
 608	Training Costs, Attendance at Meetings, etc.
 609	Maintenance and Operations
 610	Financial Forecast
 611	Advertising Expense
 612	Special Power Cost Study
Number                           Title

 613	Mapping Costs
 614	Member Relations Costs
 615	Statewide Fees
 616	Power Supply/Distribution Cooperative Borrowings
 617	Rate Discount Allowed by the Power Cooperative to
	  Distribution Cooperative Owning Connecting
	  Transmission Lines
 618	Theft Losses not Covered by Insurance
 619	Self Billing
 620	Purchase Rebates
 621	Integrity Fund
 622	In-Substance Defeasance
 623	Satellite or Cable Television Services
 624	Pollution Control Bonds
 625	Prepayment of Debt
 626	Rural Economic Development Loan and Grant Program
 627	Postretirement Benefits
 628	Postemployment Benefits
 629	Investments in Debt and Equity Securities
 630	Split Dollar Life Insurance
 631	Special Early Retirement Plan

Subject Matter Index	Number

A
	Abandonments - Plant	 133
	Acquisition Adjustments - Plant	 131
	Advertising Expenses	 611
	Assignments - Patronage Capital	 501
	Attendance at Meetings	 608
	Automatic Meter Reading Systems-Radio-Based	 140
	Automatic Meter Reading Systems-Turtle	 138
	Availability of Service - Determination of	 112
B
	Benefits - Employee	 601
	Bonds - Pollution Control	 624
	Borrowing - Power Supply Cooperative/
	  Distribution Cooperative	 616
	Buildings - Continuing Property Records	 127
	Buildings, Office - Gain or Loss on Sale of	 129
C
	Cable Television Services	 623
	Capital Credits - Assignment	 501
	Capital Credits - G&T Cooperative	 504
	Capital Credits - Other Service Cooperatives	 505
	Capital Credits - Retirement	 502
	Compensated Absences	 602
	Computer Software Costs	 401
	Consolidated Financial Statements	 404
	Construction Work in Progress Damaged or
	  Destroyed by Storm	 114
	Number
C
	Continuing Property Records - Buildings	 127
	Continuing Property Records - Establishment of	 126
	Contributions - Nonrefundable	 116
	Conversion - Line	 102
	Conversion - Transformer	 123
	Customers' Deposits - Forfeited	 301
D
	Damaged or Destroyed Construction Work in
	  Progress	 114
	Damages - Liquidated	 115
	Debt - Prepayment of	 625
	Debt Securities - Investments in	 629
	Deferred Compensation	 604
	Demand Meters - Retrofitting	 122
	Determination of Availability of Service	 113
	Disallowances of Plant Costs	 133
	Disconnect Switch - Pole Top	 105
	Discounts Allowed by Power Cooperative to
	  Distribution Cooperative Owning Transmission
	  Lines	 617
	Distribution Cooperative/Power Supply
	  Cooperative Borrowing	 616
E
	Early Retirement Plan	 631
	Employee Benefits	 601
	Equity Securities - Investments in	 629
F
	Fees - Statewide	 615
	Financial Forecast	 610
	Financial Statements - Consolidated	 404
	Financing - Supplemental	 201
	First Clearing and Grading of Land and
	  Rights of Way	 110
	Forfeited Customer Deposits	 301
	Forfeited Membership Fees	 506
G
	Gain or Loss on Sale of Office Building	 129
	General Plant	 132
	Generation and Transmission (G&T) Capital
	  Credits	 504
	Global Positioning Systems	 139
I
	Impairment of Long-Lived Assets	 137
	In-substance Defeasance	 622
	Insurance - Employee Retirement and Group	 603
	Insurance - Premium on Life of a Borrower
	  Employee	 605
	Insurance - Split Dollar	 630
	Integrity Fund	 621
	Investments in Debt and Equity Securities	 629

		Number 
J
	Joint Use	 109

L
	Land - First Clearing and Grading	 110
	Leases	 403
	Legal Expenses	 402
	Life Insurance Premiums on Life of a Borrower
	  Employee	 605
	Life Insurance - Split Dollar	 630
	Line Relocations	 135
	Liquidated Damages	 115
	Load Control Equipment	 118
	Long-Lived Assets-Impairment	 137
M
	Maintenance and Operations	 609
	Mapping Costs	 613
	Margins - Operating and Nonoperating	 503
	Material - Salvage and Obsolete	 130
	Materials and Supplies - Refund for
	  Overpayments	 117
	Member Relation Costs	 614
	Membership Fees - Forfeited	 506
	Meter Reading Systems - Radio-Based	 140
	Meter Reading Systems - Turtles	 138
	Meter Sockets and Meters	 120
	Minimum - Maximum Voltmeters	 121
	Mobile Substations	 107
N
	Neutral - Replacement of	 103
	Nonoperating Margins	 503
	Nonrefundable Payments for Construction	 116
O
	Obsolete Material	 130
	Operating and Nonoperating Margins	 503
	Operations Costs	 609
P
	Patronage Capital Assignments	 501
	Patronage Capital Furnished by Other Cooperative
	  Service Organizations	 505
	Patronage Capital from G&T Cooperatives	 504
	Patronage Capital Retirements	 502
	Payments for Construction - Nonrefundable 	 116
	Pension Costs	 606
	Phase-in Plans	 134
	Plant Abandonments	 133
	Plant Acquisition Adjustments	 131
	Plant Costs - Disallowances	 133
	Plant - General	 132
	Pole Reinforcers - Steel	 106
	Pole Top Disconnect Switch	 105
	Pollution Control Bonds	 624
	Number
P
	Postemployment Benefits	 628
	Postretirement Benefits	 627
	Power Cost Study	 612
	Power Supply/Distribution Cooperative Borrowing	 616
	Prepayment of Debt	 625
	Property - Sale of	 128
	Purchase Rebates	 620
R
	Radio-Based Automatic Meter Reading Systems	 140
	Rate Discount Allowed by Power Cooperative to a
	  Distribution Cooperative Owning Transmission
	  Lines	 617
	Rebates - Purchase	 620
	Refunds for Overpayments for Materials and
	  Supplies	 117
	Reimbursement for Line Relocations	 135
	Relocations of Lines	 135
	Replacement of a Neutral	 103
	Retirement Units	 125
	Retirements - Patronage Capital	 502
	Retrofitting Demand Meters	 122
	Rights of Way - First Clearing and Grading	 110
	Rural Economic Development Loan and Grant
	  Program	 626
S
	Sacrificial Anodes and the Replacement of a
	  Neutral	 103
	Sale of an Office Building	 129
	Sale of Property	 128
	Salvage and Obsolete Material	 130
	Satellite Television Services	 623
	Security Lights	 108
	Securities - Investments in Debt and Equity	 629
	Self Billing	 619
	Software Costs	 401
	Special Early Retirement Plan	 631
	Special Equipment	 119
	Special Power Cost Study	 612
	Split Dollar Life Insurance	 630
	Statewide Fees	 615
	Steel Pole Reinforcers	 106
	Storm Damage	 136
	Substation - Mobile	 107
	Supplemental Financing	 201
	System Planning - Engineering Contracts	 111
T
	Temporary Facilities (Services)	 113
	Terminal Facilities	 104
	Theft Losses not Covered by Insurance	 618
	Training Costs, Attendance at Meetings, etc.	 608
	Transclosures	 124
	Number
T
	Transformer Conversions	 123
	Turtles - Automatic Meter Reading Systems	 138
U
	Unproductive Time	 607
V
	Voltmeters - Minimum/Maximum	 121
W
	Work Order Procedures	 101

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.

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 in 
progress 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 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 incurred 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 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 in Progress - 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 Work in 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 year, 
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 in Progress - 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 
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 in Progress - 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 SCADA-type 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.

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 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 end-use 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.

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 
RUS 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.

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
1 1/2 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 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  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 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 pole-top 
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  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.

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 Work in 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 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 long-
term 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 in progress 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 to
Account 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, 
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 within
Account 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 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 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 
the deferred costs;

     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; and

     d.  A statement from the borrower's certified public 
accountant (CPA) or CPA firm indicating that the deferral and 
amortization of these costs is in accordance with generally 
accepted accounting principles.

To assist in the restoration of the damaged facilities, the 
Federal government often provides assistance through 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, FEMA does not specify which 
costs are to be reimbursed.  When the funds are received, 
therefore, they should be accounted for by crediting 
construction, retirement, maintenance expense, and administrative 
expense in direct proportion to the total costs incurred.  For 
example, if total storm damage costs are $1,000,000 with $450,000 
incurred for maintenance, $300,000 for retirement, $200,000 for 
construction, and $50,000 for administrative costs, the FEMA 
reimbursement should be accounted for by applying 45 percent of 
the funds received as a credit to maintenance expense, 30 percent 
as a credit to retirement costs, 20 percent as a credit to 
construction, and 5 percent as a credit to administrative and 
general 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            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 & Fixtures                 $ 133,377.55
    Cr. 365, Overhead Conductors & Devices              59,683.08
    Cr. 368, Lines Transformers                         19,704.60
    Cr. 369, Services                                   97,651.23
    Cr. 373, Street Lighting & 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             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            area.  (See Retirement Work Order 
#4401X.)

Dr. 364, Poles, Towers & Fixtures         $  99,075.40
Dr. 365, Overhead Conductors & Devices      104,142.22
Dr. 368, Line Transformers                   25,036.07
Dr. 369, Services                            28,865.08
Dr. 373, Street Lighting & 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            rebuild.

This entry includes:

		Material Issued                  $ 150,336.49
		Less: Materials Returned            15,631.39
		Net Material Used                  134,705.10
		Labor and overhead estimated
		  by using standard record
		  unit costs                       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 & 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.)

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             $ 34,129.50        $ 128,042.56
     Add: Cost of Removal           418.00            1,966.00
                                 34,547.50          130,008.56
     Less: Material Salvaged        394.00            1,545.74
     Total                     $ 34,153.50        $ 128,462.82

Dr. 355, Poles & Fixtures                 $ 161,784.05
Dr. 356, Overhead Conductors & 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 (            ) 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 & 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            area.

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                                            $ 6,595.56
	Transformers                        $ 18,869.95
	Voltage Regulators                       495.91
	Oil Circuit Reclosers    $ 607.24                 	
     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 & Fixtures                        129,056.00
    Cr. 356,   Overhead Conductors & Devices            99,408.00
    Cr. 364,   Poles, Towers & Fixtures                 78,916.00
    Cr. 365,   Overhead Conductors & Devices            82,840.00
    Cr. 368,   Line Transformers                        20,056.00
    Cr. 369,   Services                                 23,108.00
    Cr. 373,   Street Lighting & 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
    Cr. 597,   Maintenance of Meters                     5,200.00
    Cr. 920,   Administrative and General Salaries      25,491.00
    Cr. 921,   Office Supplies and Expenses              3,509.00

To allocate FEMA funds to the proper accounts.

Summary of Costs

Maintenance:

	Account 571, Maintenance of Overhead Lines    $     3,675.60
	Account 593, Maintenance of Overhead Lines         33,687.24
	Account 595, Maintenance of Line Transformers      19,365.86
	Account 597, Maintenance of Meters                  6,595.56
		Total Maintenance Costs                   $    63,324.26

Retirement Loss:

	Account 108.5, Accumulated Provision for
			   Depreciation of
			   Transmission Plant           $    93,462.82
	Account 108.6, Accumulated Provision for
			   Depreciation of
			   Distribution Plant               240,599.35
	Account 426.5, Other Deductions                   275,000.00
		Total Retirement Loss                     $   609,062.17

Construction:

	Account 186, Miscellaneous Deferred Debits    $     1,319.85
	Account 355, Poles & Fixtures                     161,784.05
	Account 356, Overhead Conductors & Devices        124,704.77
	Account 364, Poles, Towers & Fixtures              99,075.40
	Account 365, Overhead Conductor & Devices         104,142.22
	Account 368, Line Transformers                     25,036.07
	Account 369, Services                              28,865.08
	Account 373, Street Lighting & Signal Systems       2,101.60
		Total Construction Cost                   $   547,029.04

Administrative:

	Account 920, Administrative and General
                   Salaries                        $    32,000.00
	Account 921, Office Supplies and Expenses           4,421.69
		Total Administrative Cost                 $    36,421.69

		Maintenance                               $    63,324.26
		Retirement Loss                               609,062.17
		Construction                                  547,029.04
		Administrative                                 36,421.69
		    Total Costs                           $ 1,255,837.16

Distribution of FEMA Funds

	Maintenance:       63,324.26   =  .0504  =   5.0%
                      1,255,837.16 

	Retirement:       609,062.17   =  .4850  =  48.5%
                      1,255,837.16

	Construction:     547,029.04   =  .4356  =  43.6%
                      1,255,837.16

	Administrative:    36,421.69   =  .0290  =   2.9%
                      1,255,837.16

	Maintenance:     $ 1,000,000.00 X  5.0% = $    50,000.00
	Retirement:      $ 1,000,000.00 X 48.5% =     485,000.00
	Construction:    $ 1,000,000.00 X 43.6% =     436,000.00
	Administrative:  $ 1,000,000.00 X  2.9% =      29,000.00
		Total                                 $ 1,000,000.00

Distribution of FEMA Funds - Maintenance

	Account 571:      3,675.60  =  .0580  =   5.8%
                      63,324.26

	Account 593:     33,687.24  =  .5320  =  53.2%
                      63,324.26

	Account 595:     19,365.86  =  .3058  =  30.6%
                      63,324.26

	Account 597:      6,595.56  =  .1041  =  10.4%
                      63,324.26

	Account 571:     $ 50,000.00 X  5.8% = $  2,900.00
	Account 593:     $ 50,000.00 X 53.2% =   26,600.00
	Account 595:     $ 50,000.00 X 30.6% =   15,300.00
	Account 597:     $ 50,000.00 X 10.4% =    5,200.00
		Total                             $ 50,000.00

Distribution of FEMA Funds - Retirement Loss

	Account 108.5:    93,462.82  =  .1535  =  15.3%
                      609,062.17

	Account 108.6:   240,599.35  =  .3950  =  39.5%
                      609,062.17

	Account 426.5:   275,000.00  =  .4515  =  45.2%
                      609,062.17

	Account 108.5:   $ 485,000.00 X 15.3% = $  74,205.00
	Account 108.6:   $ 485,000.00 X 39.5% =   191,575.00
	Account 426.5:   $ 485,000.00 X 45.2% =   219,220.00
		Total                              $ 485,000.00

Distribution of FEMA Funds - Construction

	Account 186:      1,319.85   =  .0024  =    .2%
                      547,029.04

	Account 355:     161,784.05  =  .2958  =  29.6%
                      547,029.04

	Account 356:     124,704.77  =  .2280  =  22.8%
                      547,029.04

	Account 364:      99,075.40  =  .1811  =  18.1%
                      547,029.04

	Account 365:     104,142.22  =  .1904  =  19.0%
                      547,029.04

	Account 368:      25,036.07  =  .0457  =   4.6%
                      547,029.04

	Account 369:      28,865.08  =  .0528  =   5.3%
                      547,029.04

	Account 373:      2,101.67   =  .0038  =    .4%
                      547,029.04

	Account 186:     $ 436,000.00 X   .2% = $     872.00
	Account 355:     $ 436,000.00 X 29.6% =   129,056.00
	Account 356:     $ 436,000.00 X 22.8% =    99,408.00
	Account 364:     $ 436,000.00 X 18.1% =    78,916.00
	Account 365:     $ 436,000.00 X 19.0% =    82,840.00
	Account 368:     $ 436,000.00 X  4.6% =    20,056.00
	Account 369:     $ 436,000.00 X  5.3% =    23,108.00
	Account 373:     $ 436,000.00 X   .4% =     1,744.00
		Total                              $ 436,000.00

Distribution of FEMA Funds - Administrative

	Account 920:     32,000.00  =  .8786  =  87.9%
                      36,421.69

	Account 921:      4,421.69  =  .1213  =  12.1%
                      36,421.69

	Account 920:     $  29,000.00 X 87.9% = $  25,491.00
	Account 921:     $  29,000.00 X 12.1% =     3,509.00
		Total                              $  29,000.00

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;
     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 
arms-length 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 long-lived 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;
     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 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 
receiver; the personal computer; and the system software.  The 
meters, receivers, and personal computer shall be depreciated 
over the manufacturers 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 utilitys service area.  A field inventory 
is then taken of the utilitys 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 utilitys 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 low-power 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 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 manufacturers 
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 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 Long-Term 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.

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 patrons, 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:

	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 in progress 
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 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, RUS Forms 7 and 12 must be prepared on an 
unconsolidated basis.

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.

   	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, 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 Equities-Prior 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 201.2.

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 prior
to 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 short-term 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 the allocation notice is received, to Account 424, Other 
Capital Credits and Patronage Allocations, or to construction 
work in progress, 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 in 
progress 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.

603  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 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 
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 long-term 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 (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 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 
net periodic pension cost is less than 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.

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.

			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.

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 safety 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 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, modification, 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.

618  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  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 
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.

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 scheduled 
payments of both principal and interest related to a specific 
debt obligation.  Under the structural arrangements of an in-
substance 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 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  Pollution Control Bonds.

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
				  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.

625  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 long-term 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 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 development 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. 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

				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-as-you-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 compensation 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 
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-you-go" 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
				  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 reasonable 
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 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 securities 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-for-
sale 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 
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, Employers Accounting for Postretirement Benefits Other 
Than Pensions (Statement No. 106).

Statement of Financial Accounting Standards No. 87, Employers 
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.

Bulletin 1767B-1
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Bulletin 1767B-1
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