UNITED STATES DEPARTMENT OF AGRICULTURE 

Rural Utilities Service

BULLETIN 

1767B-1 

RD-GD-2008-56

SUBJECT: · Uniform System of Accounts - Electric 

TO: All Electric Borrowers 

RUS Electric Staff

Program Accounting Services Division

EFFECTIVE DATE: May 27, 2008 

EXPIRATION DATE: Date of change in 7 CPR Part 1767 byrulemaking 

OFFICE OF PRIMARY INTEREST: Technical Accounting and Auditing Staff, Program 

Accounting Services Division 

PREVIOUS PUBLICATIONS: This bulletin replaces RUS Bulletin 1767B-1, Uniform System 

ofAccounts - Electric, dated Sept ember 1, 1997. 

FILING INSTRUCTIONS: Discard RUS Bulletin 1767B-1, Uniform System of Accounts -

Electric, dated September 1, 1997. 

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 CPR Part 1767, Accounting Requirements 

for RUS Electric Borrowers, revised as of May 27, 2008. 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 CPR Part 1767 are the authorized sources. 

SEP 1 7 ZUO�

Date

Disclaimer: The contents of this guidance document does not have the force and effect of law and is not 

meant to bind the public in any way. This document is intended only to provide clarity to the public regarding 

existing requirements under the law or agency policies.
Bulletin 1767B-1 

Page 2 

TABLE OF CONTENTS

TEXT: 

1 §1767.10 DEFINITIONS 17 

2 §1767.11 PURPOSE 21 

3 §1767.12 ACCOUNTING SYSTEM REQUIREMENTS 21 

4 §1767.13 DEPARTURES FROM THE PRESCRIBED RURAL 

 DEVELOPMENT UNIFORM SYSTEM OF ACCOUNTS 21 

5 §1767.14 INTERPRETATIONS OF THE RUS 

 UNIFORM SYSTEM OF ACCOUNTS 23 

6 §1767.15 GENERAL INSTRUCTIONS 24 

7 §1767.16 ELECTRIC PLANT INSTRUCTIONS 38 

8 §1767.17 OPERATING EXPENSE INSTRUCTIONS 56 

9 §1767.18 ASSETS AND OTHER DEBITS 59 

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 
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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 
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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 

175 Derivative instrument assets 

176 Derivative instrument assets – Hedges. 

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 

10 §1767.19 LIABILITIES AND OTHER CREDITS 87 

200 Memberships 

200.1 Memberships Issued 

200.2 Memberships Subscribed But Unissued 

201 Patronage Capital 

201.1 Patronage Capital Credits 
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201.2 Patronage Capital Assignable 

202 [Reserved] 

203 [Reserved] 

204 [Reserved] 

205 [Reserved] 

206 [Reserved] 

207 [Reserved] 

208 Donated Capital 

209 Accumulated other comprehensive income 

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 

224.18 Other Long-Term Debt – Grant Funds 

225 Unamortized Premium on Long-Term Debt 

226 Unamortized Discount on Long-Term Debt - Debit 
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Page 6 

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 

230 Asset Retirement Obligations 

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 

244 Derivative Instrument Liabilities 

245 Derivative Instrument Liabilities - Hedges 

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 
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Page 7 

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 

11 §1767.20 PLANT ACCOUNTS 108 

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 

317 Asset Retirement Costs for Steam Production Plant 

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 

326 Asset Retirement Costs for Nuclear Production Plant 

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 

337 Asset Retirement Costs for Hydraulic Production Plant 

Other Production Plant

340 Land and Land Rights 

341 Structures and Improvements 

342 Fuel Holders, Producers and Accessories 

343 Prime Movers 

344 Generators 
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Page 8 

345 Accessory Electric Equipment 

346 Miscellaneous Power Plant Equipment 

347 Asset Retirement Costs for Other Production Plant 

Transmission Plant

350 Land and Land Rights 

351 [Reserved] 

352 Structures and Improvements 

353 Station Equipment 

354 Tower and Fixtures 

355 Poles and Fixtures 

356 Overhead Conductors and Devices 

357 Underground Conduit 

358 Underground Conductors and Devices 

359 Roads and Trails 

359.1 Asset Retirement Costs for Transmission Plant 

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 

374 Asset Retirement Costs for Distribution Plant 

Regional Transmission and Market Operation Plant

380 Land and Land Rights 

381 Structures and Improvements 

382 Computer Hardware 

383 Computer Software 

384 Communication Equipment 

385 Miscellaneous Regional Transmission and Market Operation Plant 

386 Asset Retirement Costs for Regional Transmission and 

 Market Operation Plant 

General Plant

389 Land and Land Rights 

390 Structures and Improvements 

391 Office Furniture and Equipment 

392 Transportation Equipment 
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Page 9 

393 Stores Equipment 

394 Tools, Shop and Garage Equipment 

395 Laboratory Equipment 

396 Power Operated Equipment 

397 Communication Equipment 

398 Miscellaneous Equipment 

399 Other Tangible Property 

399.1 Asset Retirement Costs for General Plan 

12 §1767.21 OPERATING INCOME 143 

400 Operating Revenues 

401 Operation Expense 

402 Maintenance Expense 

403 Depreciation Expense 

403.1 Depreciation Expense - Steam Production Plant 

403.2 Depreciation Expense - Nuclear Production Plant 

403.3 Depreciation Expense - Hydraulic Production Plant 

403.4 Depreciation Expense - Other Production Plant 

403.5 Depreciation Expense - Transmission Plant 

403.6 Depreciation Expense - Distribution Plant 

403.7 Depreciation Expense - General Plant 

403.8 Depreciation Expense—Asset Retirement Costs 

403.9 Depreciation Expense – Regional Transmission and Market Operation Plant 

404 Amortization of Limited-Term Electric Plant 

405 Amortization of Other Electric Plant 

406 Amortization of Electric Plant Acquisition Adjustments 

407 Amortization of Property Losses, Unrecovered Plant and Regulatory Study Costs 

407.3 Regulatory Debits 

407.4 Regulatory Credits 

408 Taxes Other than Income Taxes 

408.1 Taxes - Property 

408.2 Taxes - U.S. Social Security - Unemployment 

408.3 Taxes - U.S. Social Security - F.I.C.A. 

408.4 Taxes - State Social Security - Unemployment 

408.5 Taxes - State Sales - Consumers 

408.6 Taxes - Gross Revenue or Gross Receipts Tax 

408.7 Taxes - Other 

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 
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411.8 Gains from Disposition of Allowances 

411.9 Losses from Disposition of Allowances 

411.10 Accretion Expense 

412 Revenues from Electric Plant Leased to Others 

413 Expenses of Electric Plant Leased to Others 

414 Other Utility Operating Income 

13 §1767.22 OTHER INCOME AND DEDUCTIONS 150 

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 

14 §1767.23 INTEREST CHARGES 157 

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 

15 §1767.24 EXTRAORDINARY ITEMS 159 

434 Extraordinary Income 

435 Extraordinary Deductions 

435.1 Cumulative Effect on Prior Years of a Change in Accounting Principle 
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16 §1767.25 RETAINED EARNINGS 159 

433 [Reserved] 

436 [Reserved] 

437 [Reserved] 

438 [Reserved] 

439 [Reserved] 

17 §1767.26 OPERATING REVENUE 160 

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 

456.1 Revenues from Transmission of Electricity of Others 

457.1 Regional Transmission Service Revenues 

457.2 Miscellaneous Revenues 

18 §1767.27 OPERATION AND MAINTENANCE EXPENSE 166 

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 
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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 
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Page 13 

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 

561.1 Load Dispatch-Reliability 

561.2 Load Dispatch-Monitor and Operate Transmission System 

561.3 Load Dispatch-Transmission Service and Scheduling 

561.4 Scheduling, System Control and Dispatch Services 

561.5 Reliability Planning and Standards Development 

561.6 Transmission Service Studies 

561.7 Generation Interconnection Studies 

561.8 Reliability Planning and Standards Development Services 

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 

569.1 Maintenance of Computer Hardware 

569.2 Maintenance of Computer Software 

569.3 Maintenance of Communication Equipment 

569.4 Maintenance of Miscellaneous Regional Transmission Plant 

570 Maintenance of Station Equipment 

571 Maintenance of Overhead Lines 

572 Maintenance of Underground Lines 

573 Maintenance of Miscellaneous Transmission Plant 

Regional Market Operations Expenses

575.1 Operation Supervision 

575.2 Day-ahead and Real-time Market Administration 

575.3 Transmission Rights Market Administration 

575.4 Capacity Market Administration 

575.5 Ancillary Services Market Administration 

575.6 Market monitoring and compliance 
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Page 14 

575.7 Market Administration, Monitoring and Compliance Services 

575.8 Rents 

Regional Market Maintenance Expenses

576.1 Maintenance of Structures and Improvements 

576.2 Maintenance of Computer Hardware 

576.3 Maintenance of Computer Software 

576.4 Maintenance of Communication Equipment 

576.5 Maintenance of Miscellaneous Market Operation Plant 

Distribution 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 

19 §1767.28 CUSTOMER ACCOUNTS EXPENSES 229 

Customer Accounts Operations Expenses

901 Supervision 

902 Meter Reading Expenses 

903 Customer Records and Collection Expenses 

904 Uncollectible Accounts 

905 Miscellaneous Customer Accounts Expenses 

20 §1767.29 Customer Service and Informational Expenses 234 

907 Supervision 

908 Customer Assistance Expenses 

909 Informational and Instructional Advertising Expenses 

910 Miscellaneous Customer Service and Informational Expenses 
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21 §1767.30 SALES EXPENSES 239 

911 Supervision 

912 Demonstrating and Selling Expenses 

913 Advertising Expenses 

916 Miscellaneous Sales Expenses 

22 §1767.31 ADMINISTRATIVE AND GENERAL EXPENSES 244 

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 

23 §1767.32 - 1767.40 [RESERVED] 254 
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24 §1767.41 ACCOUNTING METHODS AND PROCEDURES REQUIRED 254 

 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 
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Page 17 

 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 

 633 Cushion of Credit 

25 SUBPART D--PRESERVATION OF RECORDS 327 

26 §1767.66 Purpose 

27 §1767.67 General 

28 §1767.68 Designation of a supervisory official 

29 §1767.69 Index of records 

30 §1767.70 Record storage media 

31 §1767.71 Periods of retention 

32 §1767.72 – 1767.85 [Reserved] 

INDEX: 

 Accounting 

 Uniform System of Accounts 
Bulletin 1767B-1 

Page 18 

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 

1 §1767.10 DEFINITIONS 

As used in this part: 

Accounting borrower is a RUS borrower. 

Accounts are the accounts prescribed in this system of accounts. 

Actually issued as applied to securities issued or assumed by the utility, are those which have 

been sold to bona fide purchasers for a valuable consideration, those issued as dividends on 

stock, and those which have been issued in accordance with contractual requirements direct to 

trustees of sinking funds. 

Actually outstanding as applied to securities issued or assumed by the utility, are those which 

have been actually issued and are neither retired nor held by or for the utility; provided, 

however, that securities held by trustees shall be considered as actually outstanding. 

Amortization is the gradual extinguishment of an amount in an account by distributing such 

amount over a fixed period, over the life of the asset or liability to which it applies, or over the 

period during which it is anticipated the benefit will be realized. 

Associated (affiliated) companies are companies or persons that directly, or indirectly through 

one or more intermediaries, control, or are controlled by, or under common control with, the 

accounting company. 

Book Cost means the amount at which property is recorded in these accounts without deduction 

of related provisions for accrued depreciation, amortization, or for other purposes. 

CFC is the National Rural Utilities Cooperative Finance Corporation. 

Continuing Property Records are company plant records for retirement units and mass property 

that provide, as either a single record, or in separate records readily obtainable by references 

made in a single record, the following information: 
Bulletin 1767B-1 

Page 19 

 (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. It does not 

include the cost of removal activities associated with asset retirement obligations that are 

capitalized as part of the tangible long-lived assets that give rise to the obligation (See § 

1767.15(y)). 

Customer is a consumer or patron. 

Debt expense includes all expenses incurred in connection with the issuance and initial sale of 

evidence of debt, such as fees for drafting mortgages and trust deeds; fees and taxes for issuing 

or recording evidences of debt; costs of engraving and printing bonds and certificates of 

indebtedness; fees paid to trustees; specific costs of obtaining governmental authority; fees for 

legal services; fees and commissions paid underwriters, brokers, and salesmen for marketing 

such evidences of debt; fees and expenses of listing on exchanges; and other like costs. 

Depreciation, as applied to depreciable electric plant, is the loss in service value, not restored by 

current maintenance, incurred in connection with the consumption or prospective retirement of 

electric plant in the course of service from causes which are known to be in current operation 

and against which the utility is not protected by insurance. Among the causes to be given 

consideration are wear and tear, decay, action of the elements, inadequacy, obsolescence, 

changes in the art, changes in demand and requirements of public authorities. 

Discount, as applied to the securities issued or assumed by the utility, is the excess of the par 

(stated value of 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. 
Bulletin 1767B-1 

Page 20 

Form 7 is the January 2004 revision (or the revision of any other date which may be specified) of 

such Form 7, Financial and Statistical Report, or any later revision which shall have been at the 

time prescribed for use by RUS. 

Form 12 is the December 2002 revision (or the revision of any other date which may be 

specified) of such Form 12, Operating Report - Financial, or any later revision which shall have 

been at the time prescribed for use by RUS. 

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. 

Lease, capital is a lease of property used in utility or nonutility operations, which meets one or 

more of the criteria stated in § 1767.15 (s). 

Lease, operating is a lease of property used in utility or nonutility operations, which does not 

meet any of the criteria stated in § 1767.15 (s). 

Minor items of property are the associated parts or items of which retirement units are 

composed. 

Net salvage value is the salvage value of property retired less the cost of removal. 

Nominally issued, as applied to securities issued or assumed by the utility, are those which have 

been signed, certified, or otherwise executed, and placed with the proper officer for sale and 

delivery, or pledged, or otherwise placed in some special funds of the utility, but which have not 

been sold, or issued direct to trustees of sinking funds in accordance with contractual 

requirements. 

Nominally outstanding, as applied to securities issued or assumed by the utility, are those which, 

after being actually issued, have been reacquired by or for the utility under circumstances which 

require them to be considered as held alive and not retired, provided, however, that securities 

held by trustees shall be considered as actually outstanding. 

NRECA is the National Rural Electric Cooperative Association. 

Original cost, as applied to electric plant, is the cost of such property to the person first devoting 

it to public service. 

Person is an individual, a corporation, a partnership, an association, a joint stock company, a 

business trust, or any organized group of persons, whether incorporated or not, or any receiver or 

trustee. 

Premium, as applied to securities issued or assumed by the utility, is the excess of the cash value 

of the consideration received from their sale over the sum of their par (stated value of no-par 

stocks) or face value and interest or dividends accrued at the date of sale. 

Project is a complete unit of improvement or development, consisting of a power house, all water 

conduits, all dams and appurtenant works and structures (including navigation structures) which 

are a part of said unit, and all storage, diverting, or forebay reservoirs directly connected 

therewith, the primary line or lines transmitting power therefrom to the point of junction with the 
Bulletin 1767B-1 

Page 21 

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. 

Regional Market is an organized energy market operated by a public utility, whether directly or 

through a contractual relationship with another entity. 

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

its successor. 

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. 
Bulletin 1767B-1 

Page 22 

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 a 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. 

2 §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. 

3 §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 § 

1767.13 - § 1767.31. 

(b) Each RUS electric borrower shall maintain and keep its books of accounts and all other 

books and records which support the entries in such books of accounts in accordance with § 

1767.41, Accounting Methods and Procedures Required of All RUS Borrowers, herein, which 

prescribes accounting principles to be applied to specific factual circumstances. 
Bulletin 1767B-1 

Page 23 

4 §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. Requests for departures from the RUS USoA shall be addressed, in writing, to the 

Assistant Administrator, Program Accounting and Regulatory Analysis (AA-PARA). 

(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 AA-PARA, 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 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: 
Bulletin 1767B-1 

Page 24 

(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; 

(4) A resolution from the borrower’s Board of Directors authorizing such action; and 

(5) Any additional information RUS may deem necessary to adequately evaluate the 

borrower's request. 

(f) RUS will, within 90 days of final receipt of this information, render a decision on the 

borrower's request for a departure from the prescribed RUS USoA. 

(1) If, due to extenuating circumstances, RUS is unable to reach a decision within the 

required time period, RUS will notify the borrower of the delay within this same 90-day 

period, and provide a projected decision date. 

(2) The requested departure from the prescribed RUS USoA must not be implemented 

until final approval is granted by RUS. 

5 §1767.14 INTERPRETATIONS OF THE UNIFORM SYSTEM OF ACCOUNTS 

To maintain uniformity in accounting, borrowers must submit questions concerning 

interpretations of the RUS USoA, in writing, to the AA-PARA, for consideration and decision. 

(Approved by the Office of Management and Budget under control number 0572-0002.) 
Bulletin 1767B-1 

Page 25 

6 §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 contained in subpart D of this part. 

(5) In addition to the prescribed accounts, clearing accounts, temporary or experimental 

accounts, and subdivisions of any accounts, may be kept, provided the integrity of the 

prescribed accounts is not impaired. 

(6) 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. 
Bulletin 1767B-1 

Page 26 

(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). 
Bulletin 1767B-1 

Page 27 

(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. 
Bulletin 1767B-1 

Page 28 

(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 
Bulletin 1767B-1 

Page 29 

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 Form 7, Financial and Statistical Report, or 

its 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 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 
Bulletin 1767B-1 

Page 30 

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. 
Bulletin 1767B-1 

Page 31 

(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 credited with the amount of the related tax effect, such amount to be 

allocated to the periods affected in accordance with the provisions of Account 190, 

Accumulated Deferred Income Taxes. 

(7) 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 
Bulletin 1767B-1 

Page 32 

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. 
Bulletin 1767B-1 

Page 33 

(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, 
Bulletin 1767B-1 

Page 34 

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 or Account 121 

Nonutility Property; 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) The utility, as a lessee, shall recognize an asset retirement obligation arising from the 

plant under a capital lease unless the obligation is recorded as an asset and liability under 

a capital lease. The utility shall record the asset retirement cost by debiting account 

101.1, Property under capital leases, or account 120.6, Nuclear fuel under capital leases, 

or account 121, Nonutility property, as appropriate, and crediting the liability for the 

asset retirement obligation in account 230, Asset retirement obligations. Asset retirement 

costs recorded in account 101.1, account 120.6, or account 121 shall be amortized by 

charging rent expense, or account 518, Nuclear fuel expense, or account 421, 

Miscellaneous nonoperating income, as appropriate, and crediting a separate subaccount 

of the account in which the asset retirement costs are recorded. Charges for the periodic 

accretion of the liability in account 230, Asset retirement obligations, shall be recorded 

by a charge to account 411.10, accretion expense, for electric utility plant, and account 

421, Miscellaneous nonoperating income, for nonutility plant and a credit to account 230, 

Asset retirement obligations. 

(4) Rental payments on all leases shall be charged to rent expense, fuel expense, 

construction work in progress, or other appropriate accounts as they become payable. 

(5) For a capital lease, for each period during the lease term, the amounts recorded for the 

asset and obligation shall be reduced by an amount equal to the portion of each lease 

payment that would have been allocated to the reduction of the obligation, if the payment 

had been treated as a payment on an installment obligation (liability) and allocated 

between interest expense and a reduction of the obligation so as to produce a constant 

periodic rate of interest on the remaining balance. 

(u) Allowances. 

(1) Title IV of the Clean Air Act Amendments of 1990, Pub. L. 101-549, 104 Stat. 2399, 

2584, 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 
Bulletin 1767B-1 

Page 35 

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 presentvalue 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. 
Bulletin 1767B-1 

Page 36 

(v) Depreciation Accounting. 

(1) Method. Utilities must use a method of depreciation that allocates in a systematic and 

rational manner the service value of depreciable property over the service life of the 

property. 

(2) Service lives. Estimated useful service lives of depreciable property must be 

supported by engineering, economic, and other depreciation studies. 

(3) Rate. Utilities must use percentage rates of depreciation that are based on a method of 

depreciation that allocates in a systematic and rational manner the service value of 

depreciable property to the service life of the property. Where composite depreciation 

rates are used, they should be based on the weighted average estimated useful service 

lives of the depreciable property comprising the composite group. 

(w) Accounting for other comprehensive income. 

(1) Utilities shall record items of other comprehensive income in account 209, 

Accumulated other comprehensive income. Amounts included in this account shall be 

maintained by each category of other comprehensive income. Examples of categories of 

other comprehensive income include foreign currency items, minimum pension liability 

adjustments, unrealized gains and losses on available-for-sale type securities and cash 

flow hedge amounts. Supporting records shall be maintained for account 209 so that the 

cumulative amount of other comprehensive income for each item included in this account 

can be readily identified. 

(2) When an item of other comprehensive income enters into the determination of net 

income in the current or subsequent periods, a reclassification adjustment shall be 

recorded in account 209 to avoid double counting of that amount. 

(3) When it is probable that an item of other comprehensive income will be included in 

the development of cost-of-service rates in subsequent periods, that amount of unrealized 

losses or gains will be recorded in Accounts 182.3 or 254 as appropriate. 

(x) Accounting for derivative instruments and hedging activities. 

(1) Utilities shall recognize derivative instruments as either assets or liabilities in the 

financial statements and measure those instruments at fair value, except those falling 

within recognized exceptions. Normal purchases or sales are contracts that provide for 

the purchase or sale of goods that will be delivered in quantities expected to be used or 

sold by the utility over a reasonable period in the normal course of business. A derivative 

instrument is a financial instrument or other contract with all of the following 

characteristics: 

(i) It has one or more underlyings and a notional amount or payment provision. 

Those terms determine the amount of the settlement or settlements, and, in some 

cases, whether or not a settlement is required. 

(ii) It requires no initial net investment or an initial net investment that is smaller 

than would be required for other types of contracts that would be expected to have 

a similar response to changes in market factors. 
Bulletin 1767B-1 

Page 37 

(iii) Its terms require or permit net settlement, can readily be settled net by a 

means outside the contract, or provides for delivery of an asset that puts the 

recipient in a position not substantially different from net settlement. 

(2) The accounting for the changes in the fair value of derivative instruments depends 

upon its intended use and designation. Changes in the fair value of derivative 

instruments not designated as fair value or cash flow hedges shall be recorded in account 

175, Derivative instrument assets, or account 244, Derivative instrument liabilities, as 

appropriate, with the gains recorded in account 421, Miscellaneous nonoperating income, 

and losses recorded in account 426.5, Other deductions. 

(3) A derivative instrument may be specifically designated as a fair value or cash flow 

hedge. A hedge is used to manage risk to price, interest rates, or foreign currency 

transactions. A company shall maintain documentation of the hedge relationship at the 

inception of the hedge that details the risk management objective and strategy for 

undertaking the hedge, the nature of the risk being hedged, and how hedge effectiveness 

will be determined. 

(4) If the utility designates the derivative instrument as a fair value hedge against 

exposure to changes in the fair value of a recognized asset, liability, or a firm 

commitment, it shall record the change in fair value of the derivative instrument to 

account 176, Derivates in instruments assets-Hedges, or account 245, Derivative 

instrument liabilities-Hedges, as appropriate, with a corresponding adjustment to the 

subaccount of the item being hedged. The ineffective portion of the hedge transaction 

shall be reflected in the same income or expense account that will be used when the 

hedged item enters into the determination of net income. In the case of a fair value hedge 

of a firm commitment a new asset or liability is created. As a result of the hedge 

relationship, the new asset or liability will become part of the carrying amount of the item 

being hedged. 

(5) If the utility designates the derivative instrument as a cash flow hedge against 

exposure to variable cash flows of a probable forecasted transaction, it shall record 

changes in the fair value of the derivative instrument in account 176, Derivative 

instrument assets-Hedges, or account 245, Derivative instrument liabilities-Hedges, as 

appropriate, with a corresponding amount in account 209, accumulated other 

comprehensive income, for the effective portion of the hedge. The ineffective portion of 

the hedge transaction shall be reflected in the same account or expense account that will 

be used when the hedged item enters into the determination of net income. Amounts 

recorded in other comprehensive income shall be reclassified into earning in the same 

period or periods that the hedged forecasted item enters into the determination of net 

income. 

(y) Accounting for asset retirement obligations. 

(1) An asset retirement obligation represents a liability for the legal obligation associated 

with the retirement of a tangible long-lived asset that a company is required to settle as a 

result of an existing or enacted law, statute, ordinance, or written or oral contract or by 

legal construction of a contract under the doctrine of promissory estoppel. An asset 

retirement cost represents the amount capitalized when the liability is recognized for the 

long-lived asset that gives rise to the legal obligation. The amount recognized for the 

liability and an associated asset retirement cost shall be stated at the fair value of the 

asset retirement obligation in the period in which the obligation is incurred. 
Bulletin 1767B-1 

Page 38 

(2) The utility shall initially record a liability for an asset retirement obligation in account 

230, Asset retirement obligations, and charge the associated asset retirement costs to 

electric utility plant (including accounts 101.1 and 120.6), and nonutility plant, as 

appropriate, related to the plant that gives rise to the legal obligation. The asset 

retirement cost shall be depreciated over the useful life of the related asset that gives rise 

to the obligation. For periods subsequent to the initial recording of the asset retirement 

obligation, a utility shall recognize the period to period changes of the asset retirement 

obligation that result from the passage of time due to the accretion of the liability and any 

subsequent measurement changes to the initial liability for the legal obligation recorded 

in account 230, Asset retirement obligations, as follows: 

(i) The utility shall record the accretion of the liability by debiting account 

411.10, Accretion expense, for electric utility plant, account 413, Expenses of 

electric plant leased to others, for electric plant leased to others, and account 421, 

Miscellaneous nonoperating income, for nonutility plant and crediting account 

230, Asset retirement obligations; and 

(ii) The utility shall recognize any subsequent measurement changes of the 

liability initially recorded in account 230, Asset retirement obligation, for each 

specific asset retirement obligation as an adjustment of that liability in account 

230 with the corresponding adjustment to electric utility plant, electric plant 

leased to others, and nonutility plant, as appropriate. The utility shall on a timely 

basis monitor any measurement changes of the asset retirement obligations. 

(3) Gains or losses resulting from the settlement of asset retirement obligations associated 

with utility plant resulting from the difference between the amount of the liability for the 

asset retirement obligation included in account 230, Asset retirement obligations, and the 

actual amount paid to settle the obligation shall be accounted for as follows: 

(i) Gains shall be credited to account 411.6, Gains from disposition of utility 

plant, and; 

(ii) Losses shall be charged to account 411.7, Losses from disposition of utility 

plant. 

(4) Gains or losses on the settlement of asset retirement obligations associated with 

nonutility plant resulting from the difference between the amount of the liability for the 

asset retirement obligation in account 230, Asset retirement obligations, and the amount 

paid to settle the obligation, shall be accounted for as follows: 

(i) Gains shall be credited to account 421, Miscellaneous nonoperating income, 

and; 

(ii) Losses shall be charged to account 426.5, Other deductions. 

(5) Separate subsidiary records shall be maintained for each asset retirement obligation 

showing the initial liability and associated asset retirement cost, any incremental amounts 

of the liability incurred in subsequent reporting periods for additional layers of the 

original liability and related asset retirement cost, the accretion of the liability, the 

subsequent measurement changes to the asset retirement obligation, the depreciation and 

amortization of the asset retirement costs and related accumulated depreciation, and the 

settlement date and actual amount paid to settle the obligation. For purposes of analyses 

a utility shall maintain supporting documentation so as to be able to furnish accurately 
Bulletin 1767B-1 

Page 39 

and expeditiously with respect to each asset retirement obligation the full details of the 

identity and nature of the legal obligation, the year incurred, the identity of the plant 

giving rise to the obligation, the full particulars relating to each component and 

supporting computations related to the measurement of the asset retirement obligation. 

7 §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. 

(4) Plant acquired by lease which qualifies as capital lease property under § 1767.15 (s), 

Criteria for Classifying Leases, shall be recorded in Account 101.1, Property under 

Capital Leases, or Account 120.6, Nuclear Fuel under Capital Leases, as appropriate. 

(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). 
Bulletin 1767B-1 

Page 40 

(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 
Bulletin 1767B-1 

Page 41 

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. 
Bulletin 1767B-1 

Page 42 

(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 = s(S/W) +d (D/D+P+C) (1-S/W) 

Ae = [1-S/W][p(P/D+P+C)+c(C/D+P+C)] 

 Ai = Gross allowance for borrowed funds used during construction rate. 

 Ae = 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, less 

asset retirement costs related to plant under construction. 

(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. 
Bulletin 1767B-1 

Page 43 

(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 
Bulletin 1767B-1 

Page 44 

nature, or are new to the company's operations, these costs may be capitalized as a 

component of construction cost. 

(ii) Once plant is placed in service, the capitalization of training costs shall cease 

and subsequent training costs shall be expensed. (See § 1767.17 (d).) 

(20) Studies. 

(i) Studies include the costs of studies such as nuclear operational, safety, or 

seismic studies, or environmental studies mandated by regulatory bodies relative 

to plant under construction. 

(ii) Studies relative to facilities in service shall be charged to Account 183, 

Preliminary Survey and Investigation Charges. 

(21) Asset retirement. The costs recognized as a result of asset retirement obligations 

incurred during the construction and testing of utility plant shall constitute a component 

of construction costs. 

(d) Overhead construction costs. 

(1) All overhead construction costs, such as 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. 
Bulletin 1767B-1 

Page 45 

(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: 
Bulletin 1767B-1 

Page 46 

(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. 
Bulletin 1767B-1 

Page 47 

(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 
Bulletin 1767B-1 

Page 48 

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 limitedterm 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; 
Bulletin 1767B-1 

Page 49 

(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 
Bulletin 1767B-1 

Page 50 

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; 
Bulletin 1767B-1 

Page 51 

(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) Mail chutes 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; 
Bulletin 1767B-1 

Page 52 

(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). 
Bulletin 1767B-1 

Page 53 

 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. 
Bulletin 1767B-1 

Page 54 

(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), 
Bulletin 1767B-1 

Page 55 

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 limitedterm 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. 
Bulletin 1767B-1 

Page 56 

(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. 
Bulletin 1767B-1 

Page 57 

(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. 

8 §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; 
Bulletin 1767B-1 

Page 58 

(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. 
Bulletin 1767B-1 

Page 59 

(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). 
Bulletin 1767B-1 

Page 60 

(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. 

9 §1767.18 ASSETS AND OTHER DEBITS 

The asset and other debits accounts identified in this section shall be used by all 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 
Bulletin 1767B-1 

Page 61 

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 
Bulletin 1767B-1 

Page 62 

146 Accounts Receivable from Associated Companies 

151 Fuel Stock 

152 Fuel Stock Expenses Undistributed 

153 Residuals 

154 Plant Materials and Operating Supplies 

155 Merchandise 

156 Other Materials and Supplies 

157 Nuclear Materials Held for Sale 

158.1 Allowance Inventory 

158.2 Allowances Withheld 

163 Stores Expense Undistributed 

165 Prepayments 

165.1 Prepayments - Insurance 

165.2 Other Prepayments 

171 Interest and Dividends Receivable 

172 Rents Receivable 

173 Accrued Utility Revenues 

174 Miscellaneous Current and Accrued Assets 

175 Derivative instrument assets. 

176 Derivative instrument assets – Hedges. 

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.) 
Bulletin 1767B-1 

Page 63 

 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. Records shall also be maintained for plant under a lease, it identify the asset 

retirement obligation and cost originally recognized for each lease and the periodic charges and 

credits made to the asset retirement obligations and asset retirement costs. 

102 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 account 403.8, Depreciation expense for asset retirement costs, as 

appropriate, and credited to Account 108, Accumulated Provision for Depreciation of Electric 

Utility Plant. The amounts herein shall be depreciated over a period which would correspond to 

the estimated useful life of the relevant project considering the characteristics involved. 

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. 
Bulletin 1767B-1 

Page 64 

 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. 
Bulletin 1767B-1 

Page 65 

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. 
Bulletin 1767B-1 

Page 66 

 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 

108.9 Accumulated Provision for Depreciation of Asset Retirement Costs 

These subsidiary records shall reflect the current credits and debits to this account in sufficient 

detail to show separately for each such functional classification: (1) the amount of accrual for 

depreciation, (2) the book cost of property retired, (3) cost of removal, (4) salvage, and (5) other 

items, including recoveries from insurance. 

 D. When transfers of plant are made from one electric plant account to another, or 

from or to another utility department, of from or to nonutility property accounts, the accounting 

for depreciation shall be as provided in § 1767.16 (l). 

 E. The utility is restricted in its use of the accumulated provision for depreciation 

to the purposes set forth above. It shall not transfer any portion of this account to retained 

earnings or make any other use thereof without authorization by RUS. 

109 [Reserved] 

110 [Reserved] 
Bulletin 1767B-1 

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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 
Bulletin 1767B-1 

Page 68 

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. 
Bulletin 1767B-1 

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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. 
Bulletin 1767B-1 

Page 70 

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. 
Bulletin 1767B-1 

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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. This account shall also 

include, where applicable, amounts recorded for asset retirement costs associated with nonutility 

plant. 

 B. This account shall also include the amount recorded under capital leases for 

property leased from others and used by the utility in its nonutility operations. Records shall be 

maintained with respect to each lease reflecting: (1) name of lessor, (2) basic details of lease, (3) 

terminal date, (4) original cost or fair market value of property leased, (5) future minimum lease 

payments, (6) executory costs, (7) present value of minimum lessee payments, (8) the amount 

representing interest and the interest rate used, and (9) expenses paid. 

 C. This account shall be subdivided so as to show the amount of property used in 

operations which are nonutility in character but nevertheless constitute a distinct operating 

activity of the company (such as operation of an ice department where such activity is not 

classed as a utility) and the amount of 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. 
Bulletin 1767B-1 

Page 72 

 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. 
Bulletin 1767B-1 

Page 73 

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. This account shall also include unrealized holding 

gains and losses on trading and available-for-sale types of security investments. Include also the 

offsetting entry to the recording of amortization of discount or premium on interest bearing 

investments. (See Account 419, Interest and Dividend Income.) 

 B. The records shall be maintained in such manner as to show the amount of each 

investment and the investment advances to each person. 
Bulletin 1767B-1 

Page 74 

 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. This account shall also include unrealized holding gains and losses on trading and 

available-for-sale types of investments. A separate account, with appropriate title, shall be kept 

for each sinking fund. Transfers from this account to special deposit accounts, may be 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. This account shall also include unrealized holding gains and losses 

on trading and available-for-sale types of security investments. 

128 Other Special Funds. 

This account shall include the amount of cash and book cost of investments which have been 

segregated in special funds for insurance, employee pensions, savings, relief, hospital, and other 

purposes not provided for elsewhere. This account shall also include unrealized holding gains 

and losses on trading and available-for-sale types of security investments. A separate account, 

with appropriate title, shall be kept for each fund. 

 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. 
Bulletin 1767B-1 

Page 75 

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 collectability 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. 
Bulletin 1767B-1 

Page 76 

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. 
Bulletin 1767B-1 

Page 77 

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. 
Bulletin 1767B-1 

Page 78 

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 
Bulletin 1767B-1 

Page 79 

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. 
Bulletin 1767B-1 

Page 80 

 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. 
Bulletin 1767B-1 

Page 81 

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. 
Bulletin 1767B-1 

Page 82 

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 
Bulletin 1767B-1 

Page 83 

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. 
Bulletin 1767B-1 

Page 84 

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. 

175 Derivative instrument assets 

This account shall include the amounts paid for derivative instruments, and the change in the fair 

value hedges. Account 421, Miscellaneous nonoperating income, shall be credited or debited, as 

appropriate, with the corresponding amount of the change in the fair value of the derivative 

instrument. 
Bulletin 1767B-1 

Page 85 

176 Derivative instrument assets-Hedges 

 A. This account shall include the amounts paid for derivative instruments, and the 

change in the fair value of derivative instrument assets designated by the utility as cash flow or 

fair value hedges. 

 B. When a utility designates a derivative instrument asset as a cash flow hedge it 

will record the change in the fair value of the derivative instrument in this account with a 

concurrent charge to account 209, accumulated other comprehensive income, with the effective 

portion of the gain or loss. The ineffective portion of the cash flow hedge shall be charged to the 

same income or expense account that will be used when the hedged item enters into the 

determination of net income. 

 C. When a utility designates a derivative instrument as a fair value hedge it shall 

record the change in the fair value of the derivative instrument in this account with a concurrent 

charge to a subaccount of the asset or liability that carries the item being hedged. The ineffective 

portion of the fair value hedge shall be charged to the same income or expense account that will 

be used when the hedged item enters into the determination of net income. 

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. 
Bulletin 1767B-1 

Page 86 

 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, or accumulated other comprehensive income, 

determinations in the current period under the general requirements of the Uniform System of 

Accounts but for it being probable that such items will be included in a different period(s) for 

purposes of developing the rates that the utility is authorized to charge for its utility services. 

When specific identification of the particular source of a regulatory asset cannot be made, such 

as in plant phase-ins, rate moderation plans, or rate levelization plans, Account 407.4, 

Regulatory Credits, shall be credited. The amounts recorded in this account are generally to be 

charged, concurrently with the recovery of the amounts in rates, to the same account that would 

have been charged if included in income when incurred, except all regulatory assets established 

through the use of Account 407.4 shall be charged to Account 407.3, Regulatory Debits, 

concurrent with the recovery of the amounts in rates. 

 C. If rate recovery of all or part of an amount included in this account is 

disallowed, the disallowed amount shall be charged to Account 426.5, Other Deductions, or 

Account 435, Extraordinary Deductions, in the year of the disallowance. 

 D. The records supporting the entries to this account shall be kept so that the 

utility can furnish full information as to the nature and amount of each regulatory asset included 

in this account, including justification for inclusion of such amounts in this account. 

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 
Bulletin 1767B-1 

Page 87 

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. 
Bulletin 1767B-1 

Page 88 

 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, 
Bulletin 1767B-1 

Page 89 

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).) 

10 §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 Accumulated other comprehensive income 

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 - RD Construction Loan Contract 

224.2 RD Loan Contract - Construction - Debit 

224.3 Long-Term Debt - RD Construction Notes Executed 
Bulletin 1767B-1 

Page 90 

224.4 RD Notes Executed - Construction - Debit 

224.5 Interest Accrued - Deferred - RD Construction 

224.6 Advance Payments Unapplied - RD Long-Term Debt - Debit 

224.7 Long-Term Debt - Installation Loan Contract 

224.8 RD Loan Contract - Installation - Debit 

224.9 Long-Term Debt - Installation Notes Executed 

224.10 RD 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 - RD Economic Development Notes Executed 

224.17 RD Notes Executed - Economic Development - Debit 

224.18 Other Long-Term Debt – Grant Funds 

225 Unamortized Premium on Long-Term Debt 

226 Unamortized Discount on Long-Term Debt - Debit 

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 

230 Asset Retirement Obligations 

Current and Accrued Liabilities

231 Notes Payable 

232 Accounts Payable 

232.1 Accounts Payable - General 

232.2 Accounts Payable - RD 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 
Bulletin 1767B-1 

Page 91 

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 

244 Derivative Instrument Liabilities 

245 Derivative Instrument Liabilities - Hedges 

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. 
Bulletin 1767B-1 

Page 92 

 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] 
Bulletin 1767B-1 

Page 93 

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 Accumulated other comprehensive Income

 A. This account shall include revenues, expenses, gains, and losses that are properly 

includable in other comprehensive income during the period. Examples of other comprehensive 

income include foreign currency items, minimum pension liability adjustment, unrealized gains 

and losses on certain investments in debt and equity securities, and cash flow hedges. Records 

supporting the entries to this account shall be maintained so that the utility can furnish the 

amount of other comprehensive income for each item included in this account. 

 B. This account shall also be debited or credited, as appropriate, with amounts of 

accumulated other comprehensive income that have been included in the determination of net 

income during the period and in accumulated other comprehensive income in prior periods. 

Separate records for each category of items shall be maintained to identify the amount of the 

reclassification adjustments from accumulated other comprehensive income to earning made 

during the period. 

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 
Bulletin 1767B-1 

Page 94 

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 RUS unless it is to 

distribute past capital gains and losses as capital credits or to eliminate accumulated capital 

losses in conformance with the bylaws of the cooperative. 

219 Other Margins and Equities. 

 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. 
Bulletin 1767B-1 

Page 95 

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 RUS prior approval. 

 C. These transactions are limited to items to (1) correct an error in the financial 

statements of a prior year, and (2) make adjustments that result from realization of income tax 

benefits of preacquisition operating loss carryforwards. This account shall also include the 

related income taxes (state and Federal) on items included herein. 

 D. Amounts in this account shall be transferred at the end of the year to Account 

219.1, Operating Margins, or Account 219.2, Nonoperating Margins, as appropriate. Also, at the 

end of the year, these amounts should be transferred from Account 219.1 or Account 219.2 to 

Account 201.2, Patronage Capital Assignable, when appropriate. 

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. 
Bulletin 1767B-1 

Page 96 

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 - RUS Construction Loan Contract 

224.2 RUS Loan Contract - Construction - Debit 

224.3 Long-Term Debt - RUS Construction Notes Executed 

224.4 RUS Notes Executed - Construction - Debit 

224.5 Interest Accrued - Deferred - RUS Construction 

224.6 Advance Payments Unapplied - RUS Long-Term Debt - Debit 

224.7 Long-Term Debt - Installation Loan Contract 

224.8 RUS Loan Contract - Installation - Debit 

224.9 Long-Term Debt - Installation Notes Executed 

224.10 RUS Notes Executed - Installation - Debit 

224.11 Other Long-Term Debt - Subscriptions 

224.12 Other Long-Term Debt - Supplemental Financing 

224.13 Supplemental Lender Notes Executed - Debit 

224.14 Other Long-Term Debt - Miscellaneous 

224.15 Notes Executed - Other - Debit 

224.16 Long-Term Debt - RUS Economic Development Notes Executed 

224.17 RUS Notes Executed - Economic Development – Debit 

224.18 Other Long-Term Debt – Grant Funds 

224.1 Long-Term Debt - RUS Construction Loan Contract. 

 A. This account shall include the contractual obligation to RUS on construction 

loans covered by loan contract but not by executed notes. 

 B. This account is to be used at the option of the borrower. 

224.2 RUS 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 - RUS Construction Notes Executed. 

This account shall include the contractual liability to RUS on construction notes executed. 

Records shall be maintained to show separately for each class of obligation all details as to the 

date of obligation, date of maturity, interest date and rate, and securities for the obligation. 
Bulletin 1767B-1 

Page 97 

224.4 RUS Notes Executed - Construction - Debit. 

This account shall include the total amount of the unadvanced RUS loans for construction 

purposes, which are covered by executed notes. When advances are received from RUS for 

construction, this account shall be credited and Account 131.2, Cash - Construction Fund - 

Trustee, debited with the amount of cash advanced. 

224.5 Interest Accrued - Deferred - RUS Construction. 

This account shall include interest on RUS construction obligations deferred by the terms of 

mortgage notes or extension agreements. 

224.6 Advance Payments Unapplied - RUS Long-Term Debt - Debit. 

 A. This account shall include principal payments on mortgage notes paid in 

advance of the date due and not applied to a specific note. Also, include in this account interest 

savings which are accrued and added to the advance payment unapplied. 

 B. At such time as these payments are applied to a specific note or loan balances, 

this account shall be credited and the long-term debt account debited with the amount so applied. 

224.7 Long-Term Debt - Installation Loan Contract. 

 A. This account shall include the contractual obligation to RUS on installation 

loans covered by loan contract but not covered by executed notes. 

 B. This account is to be used at the option of the borrower. 

224.8 RUS 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 RUS on installation notes executed. 

224.10 RUS 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 RUS, this account shall be 

credited and Account 131.3, Cash - Installation Loan and Collection Fund, debited with the 

amount of cash advanced. 

224.11 Other Long-Term Debt - Subscriptions. 

This account shall include the contractual obligation to purchase CFC Capital Term Certificates 

and any other similar obligation relating to supplemental financing. 
Bulletin 1767B-1 

Page 98 

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 - RUS Economic Development Notes Executed. 

This account shall include the contractual liability to RUS on rural economic development notes 

executed. Records shall be maintained to show separately for each class of obligation all details 

as to the date of obligation, date of maturity, interest date and rate, and securities for the 

obligation. 

224.17 RUS Notes Executed - Economic Development - Debit. 

This account shall include the total amount of the unadvanced RUS loans for rural economic 

development purposes, which are covered by executed notes. When advances are received from 

the RUS for rural economic development projects, this account shall be credited and Account 

131.12, Cash - General - Economic Development Funds, debited with the amount of cash 

advanced. 

224.18 Other Long-Term Debt – Grant Funds 

This account shall include the total amount of RUS grant funds awarded for rural economic 

development purposes, which are subject to repayment at the conclusion of the project. (See § 

1767.41, Interpretation 626, Rural Economic Development Loan and Grant Program) 

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 
Bulletin 1767B-1 

Page 99 

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. 
Bulletin 1767B-1 

Page 100 

 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 
Bulletin 1767B-1 

Page 101 

classified as current liabilities regardless of date due; and minor amounts payable in installments 

which may be classified as current liabilities. If a liability is due more than 1 year from the date 

of issuance or assumption by the utility, it shall be credited to a long-term debt account 

appropriate for the transaction; except however, the current liabilities previously mentioned. 

230 Asset Retirement Obligations 

 A. This account shall include the amount of liabilities for the recognition of asset 

retirement obligations related to electric utility plant and nonutility plant that gives rise to the 

obligations. This account shall be credited for the amount of the liabilities for asset retirement 

obligations with amounts charged to the appropriate electric utility plant accounts or nonutility 

plant account to record the related asset retirement costs. 

 B. The utility shall charge the accretion expense to account 411.10, Accretion 

expense, for electric utility plant, account 413, Expenses for electric plant leased to others, for 

electric plant leased to others, or account 421, Miscellaneous nonoperating income, for nonutility 

plant, as appropriate, and credit account 230, Asset retirement obligations. 

 C. This account shall be debited with amounts paid to settle the asset retirement 

obligations recorded herein. 

 D. The utility shall clear from this account any gains or losses resulting from the 

settlement of asset retirement obligations in accordance with the instruction prescribed in § 

1767.15 (y). 

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 - RUS 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. 
Bulletin 1767B-1 

Page 102 

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. 
Bulletin 1767B-1 

Page 103 

 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 
Bulletin 1767B-1 

Page 104 

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. 

244 Derivative instrument liabilities 

This account shall include the change in the fair value of all derivative instrument liabilities not 

designated as cash flow or fair value hedges. Account 426, Other deductions, shall be debited or 

credited as appropriate with the corresponding amount of the change in the fair value of the 

derivative instrument. 

245 Derivative instrument liabilities – Hedges 

 A. This account shall include the change in the fair value of derivative instrument 

liabilities designated by the utility as cash flow or fair value hedges. 
Bulletin 1767B-1 

Page 105 

 B. A utility shall record the changed in the fair value of a derivative instrument 

liability related to a cash flow hedge in this account, with a concurrent charge to account 209, 

Accumulated other comprehensive income, with the effective portion of the derivative’s gain or 

loss. The ineffective portion of the cash flow hedge shall be charged to the same income or 

expense account that will be used when the hedged item enters into the determination of net 

income. 

 C. A utility shall record the change in the fair value of a derivative instrument 

liability related to a fair value hedge in this account, with a concurrent charge to a subaccount of 

the asset or liability that carries the item being hedged. The ineffective portion or the fair value 

hedge shall be charged to the same income or expense account that will be used when the hedged 

item enters into the determination of net income. 

Deferred Credits

251 [Reserved] 

252 Customer Advances for Construction. 

This account shall include consumer advances for construction which are to be refunded either 

wholly or in part. When a customer is refunded the entire amount to which he is entitled, 

according to the agreement or rule under which the advance was made, the balance, if any, 

remaining in this account shall be credited to the respective plant accounts. 

253 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, or accumulated other comprehensive income, 

determinations in the current period under the general requirements of the Uniform System of 

Accounts but for it being probable that: (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. 
Bulletin 1767B-1 

Page 106 

 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 RUS. 

 B. Where the company's accounting provides that investment tax credits are to be 

passed on to customers, this account shall be debited and Account 411.4 credited with a 

proportionate amount determined in relation to the average useful life of electric utility property 

to which the tax credits relate or such lesser period of time as allowed 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.) 
Bulletin 1767B-1 

Page 107 

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 
Bulletin 1767B-1 

Page 108 

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. 
Bulletin 1767B-1 

Page 109 

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. 

11 §1767.20 PLANT ACCOUNTS 

The plant accounts identified in this section shall be used by all RUS borrowers. 
Bulletin 1767B-1 

Page 110 

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 

317 Asset Retirement Costs for Steam Production Plant 

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 

326 Asset Retirement Costs for Nuclear Production Plant 

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 

337 Asset Retirement Costs for Hydraulic Production Plant 

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 

347 Asset Retirement Costs for Other Production Plant 

Transmission Plant

350 Land and Land Rights 

351 [Reserved] 
Bulletin 1767B-1 

Page 111 

352 Structures and Improvements 

353 Station Equipment 

354 Tower and Fixtures 

355 Poles and Fixtures 

356 Overhead Conductors and Devices 

357 Underground Conduit 

358 Underground Conductors and Devices 

359 Roads and Trails 

359.1 Asset Retirement Costs for Transmission Plant 

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 

374 Asset Retirement Costs for Distribution Plant 

Regional Transmission and Market Operation Plant

380 Land and Land Rights 

381 Structures and Improvements 

382 Computer Hardware 

383 Computer Software 

384 Communication Equipment 

385 Miscellaneous Regional Transmission and Market Operation Plant 

386 Asset Retirement Costs for Regional Transmission and Market Operation Plant 

General Plant

389 Land and Land Rights 

390 Structures and Improvements 

391 Office Furniture and Equipment 

392 Transportation Equipment 

393 Stores Equipment 

394 Tools, Shop and Garage Equipment 

395 Laboratory Equipment 

396 Power Operated Equipment 

397 Communication Equipment 

398 Miscellaneous Equipment 

399 Other Tangible Property 

399.1 Asset Retirement Costs for General Plant 
Bulletin 1767B-1 

Page 112 

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. 
Bulletin 1767B-1 

Page 113 

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. 
Bulletin 1767B-1 

Page 114 

 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. 
Bulletin 1767B-1 

Page 115 

 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. 
Bulletin 1767B-1 

Page 116 

 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 
Bulletin 1767B-1 

Page 117 

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. 

317 Asset Retirement Costs for Steam Production Plant 

This account shall include asset retirement costs on plant included in the steam production 

function. 

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).) 
Bulletin 1767B-1 

Page 118 

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. 
Bulletin 1767B-1 

Page 119 

 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. 
Bulletin 1767B-1 

Page 120 

 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, fireextinguishing 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. 
Bulletin 1767B-1 

Page 121 

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. 

326 Asset Retirement Costs for Nuclear Production Plant 

This account shall include asset retirement costs on plant included in the nuclear production 

function. 

Hydraulic Production 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 
Bulletin 1767B-1 

Page 122 

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. 
Bulletin 1767B-1 

Page 123 

 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 
Bulletin 1767B-1 

Page 124 

for mechanically connected, truck-type boards complete, cubicles, station supervisory control 

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 

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. 
Bulletin 1767B-1 

Page 125 

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. 

337 Asset Retirement Costs for Hydraulic Production Plant 

This account shall include asset retirement costs on plant included in the hydraulic production 

function. 

Other Production 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. 
Bulletin 1767B-1 

Page 126 

 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. 
Bulletin 1767B-1 

Page 127 

 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. 
Bulletin 1767B-1 

Page 128 

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. 

347 Asset Retirement Costs for Other Production Plant. 

This account shall include asset retirement costs on plant included in the other production 

function. 

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. 
Bulletin 1767B-1 

Page 129 

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. 
Bulletin 1767B-1 

Page 130 

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. 
Bulletin 1767B-1 

Page 131 

 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. 
Bulletin 1767B-1 

Page 132 

359.1 Asset Retirement Costs for Transmission Plant 

This account shall include asset retirement costs on plant included in the transmission plant 

function. 

Distribution Plant

360 Land and Land Rights. 

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. 
Bulletin 1767B-1 

Page 133 

 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. 
Bulletin 1767B-1 

Page 134 

 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. 
Bulletin 1767B-1 

Page 135 

 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, compoundfilled, 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. 
Bulletin 1767B-1 

Page 136 

 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. 
Bulletin 1767B-1 

Page 137 

 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. 
Bulletin 1767B-1 

Page 138 

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. 

374 Asset Retirement Costs for Distribution Plant 

This account shall include asset retirement costs on plant included in the distribution plant 

function. 

Regional Transmission and Market Operation Plant

380 Land and Land Rights 

This account shall include the cost of land and land rights used in connection with regional 

transmission and market operations. 

381 Structures and Improvements 

This account shall include the cost in place of structures and improvement used for regional 

transmission and market operations. 

382 Computer Hardware 

This account shall include the cost of computer hardware and miscellaneous information 

technology equipment to provide scheduling, system control and dispatching, system planning, 

standards development, market monitoring, and market administration activities. Records shall 

be maintained identifying to the maximum extent practicable computer hardware owned and 

used for: (1) scheduling, system control and dispatching, (2) system planning and standards 

development, and (3) market monitoring and market administration activities. 
Bulletin 1767B-1 

Page 139 

Items 

 1. Personal computers 

 2. Servers 

 3. Workstations 

 4. Energy Management System (EMS) hardware 

 5. Supervisory Control and Data Acquisition (SCADA) system hardware 

 6. Peripheral equipment 

 7. Networking components 

383 Computer Software 

This account shall include the cost of off-the-shelf and in-house developed software purchased 

and used to provide scheduling, system control and dispatching, system planning, standards 

development, market monitoring, and market administration activities. Records shall be 

maintained identifying to the maximum extent practicable the cost of software used for: 

 (1) scheduling, system control and dispatching, 

 (2) system planning and standards development, and 

 (3) market monitoring and market administration activities. 

Items 

 1. Software licenses 

 2. User interface software 

 3. Modeling software 

 4. Database software 

 5. Tracking and monitoring software 

 6. Energy Management System (EMS) software 

 7. Supervisory Control and Data Acquisition (SCADA)system software 

 8. Evaluation and assessment system software 

 9. Operating, planning and transaction scheduling software 

 10. Reliability applications 

 11. Market application software 

384 Communication Equipment 

This account shall include the cost of communication equipment owned and used to acquire or 

share data and information used to control and dispatch the system. 

Items 

 1. Fiber optic cable 

 2. Remote terminal units 

 3. Microwave towers 

 4. Global Positioning System (GPS) equipment 

 5. Servers 

 6. Workstations 

 7. Telephones 

385 Miscellaneous Regional Transmission and Market Operation Plant 

This account shall include the cost of regional transmission and market operation plant and 

equipment not provided for elsewhere. 
Bulletin 1767B-1 

Page 140 

386 Asset Retirement Costs for Regional Transmission and Market Operation Plant 

This account shall include asset retirement costs on regional transmission and market operations 

plant and equipment. 

General Plant

389 Land and Land Rights. 

This account shall include the cost of land and land rights used for utility purposes, the cost of 

which is not properly includible in other land and land rights accounts. (See § 1767.16 (g).) 

390 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. 
Bulletin 1767B-1 

Page 141 

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. 
Bulletin 1767B-1 

Page 142 

 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. 
Bulletin 1767B-1 

Page 143 

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 selfpropelled 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. 
Bulletin 1767B-1 

Page 144 

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. 

399.1 Asset Retirement Costs for General Plant 

This account shall include asset retirement costs on plant included in the general plant function. 

12 §1767.21 OPERATING INCOME 

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

Utility Operating Income

400 Operating Revenues 

401 Operation Expense 

402 Maintenance Expense 

403 Depreciation Expense 

403.1 Depreciation Expense - Steam Production Plant 

403.2 Depreciation Expense - Nuclear Production Plant 

403.3 Depreciation Expense - Hydraulic Production Plant 

403.4 Depreciation Expense - Other Production Plant 

403.5 Depreciation Expense - Transmission Plant 

403.6 Depreciation Expense - Distribution Plant 

403.7 Depreciation Expense - General Plant 

403.8 Depreciation Expense—Asset Retirement Costs 

403.9 Depreciation Expense – Regional Transmission and Market Operation Plant 

404 Amortization of Limited-Term Electric Plant 

405 Amortization of Other Electric Plant 

406 Amortization of Electric Plant Acquisition Adjustments 

407 Amortization of Property Losses, Unrecovered Plant and Regulatory Study Costs 

407.3 Regulatory Debits 

407.4 Regulatory Credits 

408 Taxes Other than Income Taxes 
Bulletin 1767B-1 

Page 145 

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 

411.10 Accretion Expense 

412 Revenues from Electric Plant Leased to Others 

413 Expenses of Electric Plant Leased to Others 

414 Other Utility Operating Income 

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. 
Bulletin 1767B-1 

Page 146 

 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 

403.8 Depreciation Expense—Asset Retirement Costs 

403.9 Depreciation Expense-Regional Transmission and Market Operation 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. 
Bulletin 1767B-1 

Page 147 

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. 
Bulletin 1767B-1 

Page 148 

 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. 
Bulletin 1767B-1 

Page 149 

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). 
Bulletin 1767B-1 

Page 150 

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. 

 A. This account shall include, as approved by RUS, amounts relating to gains 

from the disposition of future use utility plant including amounts which were previously 

recorded in and transferred from Account 105, Electric Plant Held for Future Use, under the 

Provisions of Paragraphs B, C, and D thereof. Income taxes relating to gains recorded in this 

account shall be recorded in Account 409.1, Income Taxes, Utility Operating Income. 

 B. The utility shall record in this account gains resulting from the settlement of 

asset retirement obligations related to utility plant in accordance with the accounting prescribed 

in § 1767.15 (y). 

411.7 Losses from Disposition of Utility Plant. 

 A. This account shall include, as approved by RUS, amounts relating to losses 

from the disposition of future use utility plant including amounts which were previously 

recorded in and transferred from Account 105, Electric Plant Held for Future Use, under the 

provisions of Paragraphs B, C, and D thereof. Income taxes relating to losses recorded in this 

account shall be recorded in Account 409.1, Income Taxes, Utility Operating Income. 
Bulletin 1767B-1 

Page 151 

 B. The utility shall record in this account gains resulting from the settlement of 

asset retirement obligations related to utility plant in accordance with the accounting prescribed 

in § 1767.15 (y). 

411.8 Gains from Disposition of Allowances. 

This account shall be credited with the gain on the sale, exchange, or other disposition of 

allowances in accordance with §1767.15 (u) (8). Income taxes relating to gains recorded in this 

account shall be recorded in Account 409.1, Income Taxes, Utility Operating Income. 

411.9 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. 

411.10 Accretion Expense 

This account shall be charged for accretion expense on the liabilities associated with asset 

retirement obligations included in account 230, Asset retirement obligations, relating to electric 

utility plant. 

412 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. 
Bulletin 1767B-1 

Page 152 

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. 

13 §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. 
Bulletin 1767B-1 

Page 153 

 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. 
Bulletin 1767B-1 

Page 154 

 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. 
Bulletin 1767B-1 

Page 155 

 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. 
Bulletin 1767B-1 

Page 156 

Items

 1. Profit on sale of timber. (See § 1767.16 (g)(3).) 

 2. Profits from operations of others realized by the utility under contracts. 

 3. Gains on disposition of investments. Also, gains on reacquisition and 

resale or retirement of the utility's debt securities when the gain is not amortized or used by a 

jurisdictional regulatory agency to reduce embedded debt cost in establishing rates. (See 

§ 1767.15 (q).) 

 4. This account shall include the accretion expense on the liability for an 

asset retirement obligation included in account 230, Asset retirement obligations, related to 

nonutility plant. 

 5. This account shall include the depreciation expense for asset retirement 

costs related to nonutility plant. 

 6. The utility shall record in this account gains resulting from the settlement 

of asset retirement obligations related to nonutility plant in accordance with the accounting 

prescribed in § 1767.15 (y). 

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. 
Bulletin 1767B-1 

Page 157 

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 
Bulletin 1767B-1 

Page 158 

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. 

 6. The utility shall record in this account losses resulting from the 

settlement of asset retirement obligations related to nonutility plant in accordance with the 

accounting prescribed in § 1767.15 (y). 

14 §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. 
Bulletin 1767B-1 

Page 159 

 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. 
Bulletin 1767B-1 

Page 160 

 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). 

15 §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).) 
Bulletin 1767B-1 

Page 161 

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. 

16 §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] 

17 §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 
Bulletin 1767B-1 

Page 162 

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 

456.1 Revenues from Transmission of Electricity of Others 

457.1 Regional Transmission Service Revenues 

457.2 Miscellaneous 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. 
Bulletin 1767B-1 

Page 163 

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. 
Bulletin 1767B-1 

Page 164 

 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. 
Bulletin 1767B-1 

Page 165 

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. 
Bulletin 1767B-1 

Page 166 

 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. 
Bulletin 1767B-1 

Page 167 

 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. 

456.1 Revenues from Transmission of Electricity of Others 

This account shall include revenues from transmission of electricity of others over transmission 

facilities of the utility. 

457.1 Regional Transmission Service Revenues 

This account shall include revenues derived from providing scheduling, system control and 

dispatching services. Include also in this account reimbursements for system planning, standards 

development, and market monitoring and market compliance activities. Records shall be 

maintained so as to show: (1) the services supplied and revenues received from each customer 

and (2) the amounts billed by tariff or specified rates. 

457.2 Miscellaneous Revenues 

This account shall include revenues and reimbursements for costs incurred by regional 

transmission service providers not provided for elsewhere. Records shall be maintained so as to 

show: (1) the services supplied and revenues received fro each customer, and (2) the amounts 

billed by tariff or specified rates. 

18 §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 
Bulletin 1767B-1 

Page 168 

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 
Bulletin 1767B-1 

Page 169 

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 

561.1 Load Dispatch-Reliability 

561.2 Load Dispatch-Monitor and Operate Transmission System 

561.3 Load Dispatch-Transmission Service and Scheduling 

561.4 Scheduling, System Control and Dispatch Services 

561.5 Reliability Planning and Standards Development 

561.6 Transmission Service Studies 

561.7 Generation Interconnection Studies 

561.8 Reliability Planning and Standards Development Services 

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 

569.1 Maintenance of Computer Hardware 

569.2 Maintenance of Computer Software 

569.3 Maintenance of Communication Equipment 

569.4 Maintenance of Miscellaneous Regional Transmission Plant 

570 Maintenance of Station Equipment 

571 Maintenance of Overhead Lines 

572 Maintenance of Underground Lines 

573 Maintenance of Miscellaneous Transmission Plant 

Regional Market Operations Expenses

575.1 Operation Supervision 

575.2 Day-ahead and Real-time Market Administration 

575.3 Transmission Rights Market Administration 

575.4 Capacity Market Administration 

575.5 Ancillary Services Market Administration 

575.6 Market monitoring and compliance 

575.7 Market Administration, Monitoring and Compliance Services 
Bulletin 1767B-1 

Page 170 

575.8 Rents 

Regional Market Maintenance Expenses

576.1 Maintenance of Structures and Improvements 

576.2 Maintenance of Computer Hardware 

576.3 Maintenance of Computer Software 

576.4 Maintenance of Communication Equipment 

576.5 Maintenance of Miscellaneous Market Operation Plant 

Distribution 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, 
Bulletin 1767B-1 

Page 171 

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. 
Bulletin 1767B-1 

Page 172 

 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. 
Bulletin 1767B-1 

Page 173 

 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. 
Bulletin 1767B-1 

Page 174 

 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, 
Bulletin 1767B-1 

Page 175 

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. 
Bulletin 1767B-1 

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 2. Amounts credited to Account 228.1, Accumulated Provision for Property 

Insurance, for similar protection. 

 3. Special costs incurred in procuring insurance. 

 4. Insurance inspection service. 

 5. Insurance counsel, brokerage fees, and expenses. 

 6. Premiums payable to insurance companies for protection against claims 

from injuries and damages by employees or others, such as public liability, property damages, 

casualty, employee liability, etc., and amounts credited to Account 228.2, Accumulated 

Provision for Injuries and Damage, for similar protection. 

 7. Losses not covered by insurance or reserve accruals on account of 

injuries or deaths to employees or others and damages to the property of others. 

 8. Fees and expenses of claim investigators. 

 9. Payment of awards to claimants for court costs and attorneys' services. 

 10. Medical and hospital service and expenses for employees as the result of 

occupational injuries or resulting from claims of others. 

 11. Compensation payments under workmen's compensation laws. 

 12. Compensation paid while incapacitated as the result of occupational 

injuries. (See Account 924, Note A.) 

 13. Cost of safety, accident prevention, and similar educational activities. 

 Materials and Expenses: 

 1. Lubricants and control system oils. 

 2. Generator cooling gases. 

 3. Circulating water purification supplies. 

 4. Cooling water purchased. 

 5. Motor and generator brushes. 

506 Miscellaneous Steam Power Expenses.

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and materials used and expenses incurred which are 

not specifically provided for or not readily assignable to other steam generation operation 

expense accounts. 

Items

 Labor: 

 1. General clerical and stenographic work. 

 2. Guarding and patrolling plant and yard. 

 3. Building service. 

 4. Care of grounds including snow removal, and grass cutting. 

 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 
Bulletin 1767B-1 

Page 177 

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).) 
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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).) 
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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. 
Bulletin 1767B-1 

Page 180 

 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. 
Bulletin 1767B-1 

Page 181 

 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. 
Bulletin 1767B-1 

Page 182 

 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. 
Bulletin 1767B-1 

Page 183 

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. 
Bulletin 1767B-1 

Page 184 

 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. 
Bulletin 1767B-1 

Page 185 

 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).) 
Bulletin 1767B-1 

Page 186 

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. 
Bulletin 1767B-1 

Page 187 

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. 
Bulletin 1767B-1 

Page 188 

 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. 
Bulletin 1767B-1 

Page 189 

 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. 
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Page 190 

 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. 
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Page 191 

 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 
Bulletin 1767B-1 

Page 192 

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. 
Bulletin 1767B-1 

Page 193 

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. 
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Page 194 

 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. 
Bulletin 1767B-1 

Page 195 

 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).) 
Bulletin 1767B-1 

Page 196 

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. 

Note: The records supporting this account shall provide information pertaining to the 

purchase of power from renewable energy sources. 

556 System Control and Load Dispatching.

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, and expenses 

incurred in load dispatching activities for system control. Utilities having an interconnected 

electric system or operating under a central authority which controls the production and 

dispatching of electricity may apportion these costs to this account and transmission expense 

Account 561.1 through 561.4, and Account 581, Load Dispatching-Distribution. 

Items

 Labor: 

 1. Allocating loads to plants and interconnections with others. 

 2. Directing switching. 

 3. Arranging and controlling clearances for construction, maintenance, test, 

and emergency purposes. 

 4. Controlling system voltages. 

 5. Recording loadings, and water conditions. 
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Page 197 

 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. 
Bulletin 1767B-1 

Page 198 

 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).) 

561.1 Load Dispatch-Reliability 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and 

expenses incurred by a regional transmission service provider or other transmission provider to 

manage the reliability coordination function as specified by the North American Electric 

Reliability Council (NERC) and individual reliability organizations. These activities shall 

include performing current and next day reliability analysis. This account shall include the costs 

incurred to calculate load forecasts, and performing contingency analysis. 

561.2 Load Dispatch-Monitor and Operate Transmission System 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and 

expenses incurred by a regional transmission service provider or other transmission provider to 

monitor, assess and operate the power system and individual transmission facilities in real-time 

to maintain safe and reliable operation of the transmission system. This account shall also 

include the expense incurred to manage transmission facilities to maintain system reliability and 

to monitor real-time flows and direct actions according to regional plans and tariffs if necessary. 

Items

 1. Receive and analyze outage requests 

 2. Reschedule outage plans 
Bulletin 1767B-1 

Page 199 

 3. Monitor solution quality field data values, providing model updates to 

NERC and coordinating network model changes across all systems 

 4. Conduct operating training related to NERC Certification 

 5. Monitor generation resources and communicate expected dispatch 

actions 

 6. Ensure ancillary service requirements are met 

 7. Directing switching 

 8. Controlling system voltages 

 9. Obtaining reports on the weather and special events 

 10. Preparing operating reports and data for billing and budget purposes 

561.3 Load Dispatch-Transmission Service and Scheduling 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and 

expenses incurred by a regional transmission service provider or other transmission provider to 

process hourly, daily, weekly and monthly transmission service requests using an automated 

system such as an Open Access Same-Time Information System (OASIS). It shall include the 

expenses incurred to operate the automated transmission service request system and to monitor 

the status of all scheduled energy transactions. 

561.4 Scheduling, System Control and Dispatching Services 

This account shall include the costs billed to the transmission owner, load serving entity or 

generator for scheduling, system control and dispatching service. Include in this account service 

billings for system control to maintain the reliability of the transmission area in accordance with 

reliability standards, maintaining defined voltage profiles, and monitoring operations of the 

transmission facilities. 

561.5 Reliability, Planning and Standards Development 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and 

expenses incurred for the system planning of the interconnected bulk electric transmission 

system within a planning authority area. 

Items

 1. Developing and maintaining transmission system models to evaluate 

transmission system performance. 

 2. Maintaining and applying methodologies and tools for the analysis and 

simulation of the transmission systems for the assessment and development of transmission 

expansion plans. 

 3. Assessing, developing and documenting transmission expansion plans. 

 4. Maintaining transmission system models (steady-state, dynamics, and 

short circuit). 

 5. Collecting transmission information and transmission facility 

characteristics and ratings. 

 6. Notifying participants of any planned transmission changes that may 

impact their facilities. 

 7. Developing and reporting on transmission expansion plans for 

assessment and compliance with reliability standards. 
Bulletin 1767B-1 

Page 200 

 8. Developing reliability standards for the planning and operation of the 

interconnected bulk electric transmission systems that serve the United States, Canada and 

Mexico. 

 9. Developing criteria and certification procedures for reliability 

authorities, transmission operators and others. 

 10. Outside services employed. 

Note: The cost of supervision, customer records and collection expenses, administrative 

and general salaries, regulatory commission expenses, general advertising, and rents shall be 

charged to the customer accounts, service, administrative and general expense accounts 

contained in the Uniform System of Accounts. 

561.6 Transmission Service Studies 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and 

expenses incurred to conduct generation interconnection studies for proposed interconnections 

with the transmission system. Detailed records shall be maintained for each study undertaken 

and all reimbursements received for conducting such a study. 

561.7 Generation Interconnection Studies 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and 

expenses incurred to conduct generation interconnection studies for proposed interconnections 

with the transmission system. Detailed records shall be maintained for each study undertaken 

and all reimbursements received for conducting such a study. 

561.8 Reliability Planning and Standards Development Services 

This account shall include the costs billed to the transmission owner, load serving entity, or 

generator for system planning of the interconnected bulk electric transmission service provider 

for system reliability and resource panning to develop long-term strategies to meet customer 

demand and energy requirements. This account shall also include fees and expenses for outside 

services incurred by the regional transmission service provider and billed to the load serving 

entity, transmission owner or generator. 

562 Station Expenses.

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, property insurance, property taxes, materials used, and 

expenses incurred in operating transmission substations and switching stations. If transmission 

station equipment is located in or adjacent to a generating station, the expenses applicable to 

transmission station operations shall nevertheless be charged to this account. 

Items

 Labor: 

 1. Supervising station operation. 

 2. Adjusting station equipment where such adjustment primarily affects 

performance, such as regulating the flow of cooling water, adjusting current in fields of a 

machine or changing voltage of regulators, changing station transformer taps. 
Bulletin 1767B-1 

Page 201 

 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. 
Bulletin 1767B-1 

Page 202 

 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. 
Bulletin 1767B-1 

Page 203 

 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. 
Bulletin 1767B-1 

Page 204 

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. 
Bulletin 1767B-1 

Page 205 

 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).) 

569.1 Maintenance of Computer Hardware 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, materials used and expenses incurred in the 

maintenance of computer hardware serving the transmission function. 
Bulletin 1767B-1 

Page 206 

569.2 Maintenance of Computer Software 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, materials used and expenses incurred for annual 

computer software license renewals, annual software update services and the cost of ongoing 

support for software products serving the transmission function. 

Items 

 1. Telephone Support 

 2. Onsite support 

 3. Software updates and minor revisions 

569.3 Maintenance of Communication Equipment 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, materials used and expenses incurred in the 

maintenance of communication equipment serving the transmission function. 

569.4 Maintenance of Miscellaneous Regional Transmission Plant 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, materials used and expenses incurred in the 

maintenance of miscellaneous regional transmission plant serving the transmission function. 

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. 
Bulletin 1767B-1 

Page 207 

 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. 
Bulletin 1767B-1 

Page 208 

 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. 
Bulletin 1767B-1 

Page 209 

 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).) 
Bulletin 1767B-1 

Page 210 

Regional Market Operations Expenses

575.1 Operation Supervision 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred in the general supervision and 

direction of the regional energy markets. 

575.2 Day-ahead and Real-time Market Administration 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred to facilitate the Day-Ahead and 

Real-Time markets. This account shall also include the costs incurred to manage the real-time 

deployment of resources to meet generation needs and to provide capacity adequacy verification. 

Include in this account the costs incurred to maintain related sections of the tariff, market rules, 

operating procedures, and standards and coordinating with neighboring areas. 

Items

1. Consultant fees and expenses 

2. System record and report forms 

3. Meals, traveling and incidental expenses 

 Note: The cost of supervision, customer records and collection expenses, administrative 

and general salaries, regulatory commission expenses, general advertising, and rents shall be 

charged to the customer accounts, service, administrative and general expense accounts 

contained in the Uniform System of Accounts. 

575.3 Transmission Rights Market Administration 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred to manage the allocation and 

auction of transmission rights. 

575.4 Capacity Market Administration 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred to manage the allocation of 

capacity rights. 

575.5 Ancillary Services Market Administration 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred to manage all other ancillary 

services market functions 

575.6 Market Monitoring and Compliance 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred to review market data and 

operational decisions for compliance with market rules. It shall also include the costs incurred to 

interface with external market monitors. 
Bulletin 1767B-1 

Page 211 

575.7 Market Administration, Monitoring and Compliance Services 

This account shall include the cost billed to the transmission owner, load serving entity or 

generator for market administration, monitoring and compliance services. 

575.8 Rents 

This account shall include all rents of property of others used, occupied, or operated in 

connection with market administration and monitoring. (See § 1767.17 (c).) 

Regional Market Maintenance Expenses

576.1 Maintenance of Structures and Improvements 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred in the maintenance of structures 

used in market administration and monitoring. (See § 1767.17 (b)) 

576.2 Maintenance of Computer Hardware 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred in the maintenance of computer 

hardware used in market administration and monitoring. 

576.3 Maintenance of Computer Software 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred for annual computer software 

license renewals, annual software update services and the cost of ongoing support for software 

products used in market administration and monitoring. 

Items

 1. Telephone Support 

 2. Onsite support 

 3. Software updates and minor revisions 

576.4 Maintenance of Communication Equipment 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred in the maintenance of 

communication equipment used in market administration and monitoring. 

576.5 Maintenance of Miscellaneous Market Operation Plant 

This account shall include the cost of labor, employee pensions and benefits, social security and 

other payroll taxes, injuries and damages, and expenses incurred in the maintenance of 

miscellaneous market operation plant used in market administration and monitoring. 
Bulletin 1767B-1 

Page 212 

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. 
Bulletin 1767B-1 

Page 213 

 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. 
Bulletin 1767B-1 

Page 214 

 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. 
Bulletin 1767B-1 

Page 215 

 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. 
Bulletin 1767B-1 

Page 216 

 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. 
Bulletin 1767B-1 

Page 217 

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. 
Bulletin 1767B-1 

Page 218 

 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. 
Bulletin 1767B-1 

Page 219 

 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. 
Bulletin 1767B-1 

Page 220 

 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. 
Bulletin 1767B-1 

Page 221 

 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. 
Bulletin 1767B-1 

Page 222 

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. 
Bulletin 1767B-1 

Page 223 

 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).) 
Bulletin 1767B-1 

Page 224 

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. 
Bulletin 1767B-1 

Page 225 

 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).) 
Bulletin 1767B-1 

Page 226 

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. 
Bulletin 1767B-1 

Page 227 

 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).) 
Bulletin 1767B-1 

Page 228 

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. 

19 §1767.28 CUSTOMER ACCOUNTS EXPENSES 

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

borrowers. 
Bulletin 1767B-1 

Page 229 

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 
Bulletin 1767B-1 

Page 230 

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. 
Bulletin 1767B-1 

Page 231 

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: 
Bulletin 1767B-1 

Page 232 

 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 
Bulletin 1767B-1 

Page 233 

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, 
Bulletin 1767B-1 

Page 234 

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. 

20 §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. 
Bulletin 1767B-1 

Page 235 

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. 
Bulletin 1767B-1 

Page 236 

 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). 
Bulletin 1767B-1 

Page 237 

 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 
Bulletin 1767B-1 

Page 238 

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. 
Bulletin 1767B-1 

Page 239 

 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. 

21 § 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. 
Bulletin 1767B-1 

Page 240 

 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. 
Bulletin 1767B-1 

Page 241 

 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, 
Bulletin 1767B-1 

Page 242 

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.) 
Bulletin 1767B-1 

Page 243 

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, 
Bulletin 1767B-1 

Page 244 

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. 

22 §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. 
Bulletin 1767B-1 

Page 245 

 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. 
Bulletin 1767B-1 

Page 246 

 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. 
Bulletin 1767B-1 

Page 247 

 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 appropriate 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.) 
Bulletin 1767B-1 

Page 248 

 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 appropriate 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. 
Bulletin 1767B-1 

Page 249 

 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. 
Bulletin 1767B-1 

Page 250 

Items

 1. Salaries, fees, retainers, and expenses of counsel, solicitors, attorneys, 

accountants, engineers, clerks, attendants, witnesses, and others engaged in the prosecution of or 

defense 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 
Bulletin 1767B-1 

Page 251 

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. 
Bulletin 1767B-1 

Page 252 

 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, 
Bulletin 1767B-1 

Page 253 

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 
Bulletin 1767B-1 

Page 254 

 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. 

23 §1767.32 - 1767.40 [Reserved] 
Bulletin 1767B-1 

Page 255 

24 §1767.41 ACCOUNTING METHODS AND PROCEDURES REQUIRED OF ALL 

 RUS BORROWERS 

All RUS borrowers shall maintain and keep their books of accounts and all other books and 

records which support the entries in such books of accounts in accordance with the accounting 

principles prescribed in this section. Interpretations Nos. 133, 134, 137, 403, 404, 602, 606, 618, 

627, 628, and 629 adopt and implement the provisions of standards issued by the Financial 

Accounting Standards Board (FASB). Each interpretation includes a synopsis of the 

requirements of the standard as well as specific accounting requirements and interpretations 

required by RUS. The synopsis provides general information to assist borrowers in determining 

whether the standard applies to an individual cooperative’s operations. The synopsis is not 

intended to change the requirements of the FASB standards unless it is set forth in the section 

entitled RUS Accounting Requirements in each interpretation. If a particular borrower believes 

a conflict exists between the FASB standard and a 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 

 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 
Bulletin 1767B-1 

Page 256 

 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 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 

 633 Cushion of Credit 
Bulletin 1767B-1 

Page 257 

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 

 Continuing Property Records - Buildings 127 

 Continuing Property Records - Establishment of 126 

 Contributions - Nonrefundable 116 

 Conversion - Line 102 

 Conversion - Transformer 123 

 Cushion of Credit 633 

 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 
Bulletin 1767B-1 

Page 258 

 Number 

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 

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 
Bulletin 1767B-1 

Page 259 

 Number

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 

P 

 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 

 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 

S 

 Securities - Investments in Debt and Equity 629 

 Self Billing 619 

 Software Costs 401 
Bulletin 1767B-1 

Page 260 

 Number

S

 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 

 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 
Bulletin 1767B-1 

Page 261 

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. 
Bulletin 1767B-1 

Page 262 

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 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 
Bulletin 1767B-1 

Page 263 

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. 
Bulletin 1767B-1 

Page 264 

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 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. 
Bulletin 1767B-1 

Page 265 

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 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. 
Bulletin 1767B-1 

Page 266 

 4. Continuing property records shall be adjusted to reflect the above transactions. 

 5. Amounts approved for advance on the 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 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. 
Bulletin 1767B-1 

Page 267 

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. 
Bulletin 1767B-1 

Page 268 

 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 
Bulletin 1767B-1 

Page 269 

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 
Bulletin 1767B-1 

Page 270 

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. 

Electric borrowers that wish to receive such a waiver from the special equipment accounting 

requirements should submit a letter request to RUS. In order to expedite these requests the letter 

to RUS should state that the borrower will adhere to the following requirements to account for 

special equipment using the work order procedure rather than the special equipment accounting 

procedures prescribed by RUS: 

1. New purchases of special equipment items are to be charged to Account 154, Materials 

and Supplies, upon purchase. 

2. Labor, material and overhead costs associated with the initial installation and all 

subsequent installations of special equipment are recorded on construction work orders and 

charged to the appropriate plant accounts upon closeout of the construction work order. 

3. Labor and overhead costs associated with the removal of special equipment items, 

whether the items removed are placed in inventory or permanently retired and disposed of, 

are recorded on retirement work orders and charged or credited to the depreciation reserve 

account upon closeout of the retirement work order. 

4. The special equipment items retired and salvaged for reuse are returned to the materials 

and supplies account at the average material cost in the materials and supplies account and 

credited to the depreciation reserve upon closeout of the retirement work order. 

In addition to recognition of the requirements noted above, the borrower should indicate how it 

plans to account for the items of special equipment that have been charged to the plant accounts 

but not installed (in inventory). Two acceptable methods to account for this equipment are: (1) 

leave the equipment in the plant accounts until the inventory is depleted and charge only new 

purchases to materials and supplies, or (2) credit the plant accounts for the installed cost of the 

equipment in inventory, charge the equipment cost to materials and supplies, and charge the 

installation cost to the appropriate operations expense account. Also, under the second method, 

the borrower must submit a “negative” special equipment summary to RUS to return to the 

balance in reserve for the current loan the installed cost of special equipment in inventory on the 

date of transition. 

120 Meter Sockets and Meters. 

When a utility furnishes meter sockets, ownership by the utility of the meter socket or base, as 

well as the meter itself, is established by virtue of them being furnished without cost to the 

consumer by the cooperative. While no agreement as to ownership between the cooperative and 
Bulletin 1767B-1 

Page 271 

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 
Bulletin 1767B-1 

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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. 
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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 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 
Bulletin 1767B-1 

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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 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. 
Bulletin 1767B-1 

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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. 
Bulletin 1767B-1 

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 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. 
Bulletin 1767B-1 

Page 277 

 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. 
Bulletin 1767B-1 

Page 278 

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: 
Bulletin 1767B-1 

Page 279 

 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 (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, 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 
Bulletin 1767B-1 

Page 280 

above construction and retirement costs represent maintenance expense. Maintenance costs 

include the costs of resagging lines, straightening poles, and replacing minor items of property. 

When extensive damage has occurred, the need to restore the property to an operating condition 

without delay usually results in excessive costs being incurred. Standard property unit costs may 

be used as a guide in determining the amount to be capitalized. It should be noted, however, that 

when standard property unit costs are used, all excess costs are charged to maintenance expense. 

Because of the storm's destruction, property is retired prematurely and as a result, extraordinary 

retirement losses occur. When such extraordinary losses occur, they should be recorded in the 

year in which the losses are incurred. If the recording of such losses will materially distort the 

income statement, such losses may be charged to Account 435, Extraordinary Deductions. 

These costs may be deferred and amortized to future periods only if the provisions of Statement 

of Financial Accounting Standards No. 71, Accounting for the Effects of Certain Types of 

Regulation (Statement No. 71), are applied. Under the provisions of Statement No. 71, a utility 

may defer certain costs, provided such costs are included in the utility's rate base and recovered 

through future rates. If an RUS borrower elects to apply the provisions of Statement No. 71, 

RUS approval is required. To obtain RUS approval, a borrower must submit: 

 a. A detailed description of the plan including the nature of the expense item, the amount 

of the deferral, the specific time period for rate recovery, and justifying support for the time 

period selected; 

 b. The accounting journal entries being used by the cooperative to record the expense 

deferral and amortization of deferred costs; and 

 c. A copy of the state Commission order authorizing recovery of the deferred costs 

through future rates, or in the absence of commission jurisdiction, a resolution from the 

cooperative’s board of directors authorizing such recovery. 

To assist in the restoration of the damaged facilities, the Federal government often provides 

assistance through Federal Emergency Management Agency (FEMA). Under current FEMA 

procedures, FEMA provides funds for the restoration of facilities based upon the cost estimates 

submitted by the entity requesting assistance. 

If the FEMA grant is for less than 100 percent of the cost estimates, and does not specify offset 

expenses, thereby providing the borrower with the maximum opportunity to utilize RUS loan 

funds to finance capitalizable costs. When the funds are received, they should be accounted for 

by first applying the funds received as a credit to maintenance expense and administrative and 

general costs. Any remaining funds should then be applied as a credit to construction and 

retirement costs. 

137 Impairment of Long-Lived Assets

Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of LongLived 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 
Bulletin 1767B-1 

Page 281 

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 
Bulletin 1767B-1 

Page 282 

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; 
Bulletin 1767B-1 

Page 283 

 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. 
Bulletin 1767B-1 

Page 284 

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 manufacturer’s estimated 

useful service life. The system software shall be depreciated over the estimated useful service 

life of the program not to exceed 5 years. 
Bulletin 1767B-1 

Page 285 

139 Global Positioning Systems.

The Global Positioning System (GPS) is a worldwide radio-navigation system formed from a 

network of 24 satellites and their ground stations. Utilities are using this advanced technology 

geographic data collection system to update and modernize their system maps. GPS uses a 

system of satellites orbiting the earth to establish plant locations with pinpoint accuracy. By 

triangulating from three satellites and using radio signals to measure distances and locate items, 

system-wide maps can be created of the utility’s service area. A field inventory is then taken of 

the utility’s plant and plotted onto the map. The GPS consists of base station equipment, remote 

station equipment, the GPS program, and mapping conversion software. 

All equipment associated with GPS is dedicated to the mapping effort. The base station is 

installed at a fixed location and ties satellite measurements into a solid local reference. The 

remote station is a portable receiver that is taken into the field to determine locations and is 

moved from site to site. The GPS program is the application software that operates the station 

equipment and is used by layout technicians to gather information of existing and new facilities 

in the field. The conversion software is used for converting the GPS and inventory information 

gathered in the field into a form usable by the mapping program. 

Accounting Requirements

The function and location of the equipment are the primary factors in determining the account in 

which the equipment shall be recorded. The components of the GPS shall be accounted for as 

follows: 

 1. Remote and Base Station Equipment The cost of the equipment, both remote and 

fixed, shall be capitalized in a subaccount of Account 391, Office Furniture and Equipment. 

 2. GPS Program and Conversion Software for Mapping The cost of GPS program and 

conversion software shall be capitalized in a subaccount of Account 391, Office Furniture and 

Equipment. 

 3. GPS/GIS Field Inventory of System The cost of performing a GPS/GIS survey and 

field inventory of the existing system by either a consultant or the utility’s own forces, shall be 

charged to Account 588, Miscellaneous Distribution Expenses. 

140 Radio-Based Automatic Meter Reading Systems.

Radio-based automatic meter reading technology allows meters equipped with a 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. 
Bulletin 1767B-1 

Page 286 

Separate continuing property records shall be established for the meters, either fitted or 

retrofitted with the device; the handheld computer; and the upload software. The meters and 

handheld computer shall be depreciated over the manufacturer’s estimated useful service life. 

The upload software shall be depreciated over the estimated useful service life of the program 

not to exceed 5 years. 

201 Supplemental Financing. 

Many borrowers secure additional financing from sources other than RUS. CFC was established 

to provide a source of supplemental financing. Although the accounting provided in this section 

refers to CFC, it is applicable to other sources of supplemental financing as well. 

 1. Membership Fees. When a membership fee is paid to CFC, the payment shall be 

recorded as a debit to Account 123.23, Other Investments in Associated Organizations. 

 2. Subscriptions. The subscription agreement to purchase Capital Term Certificates 

(CTCs) is a binding obligation to pay an initial subscription in equal annual payments over the 

first three 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. 
Bulletin 1767B-1 

Page 287 

 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 debtequity 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. 
Bulletin 1767B-1 

Page 288 

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. 
Bulletin 1767B-1 

Page 289 

 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. 
Bulletin 1767B-1 

Page 290 

 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. 
Bulletin 1767B-1 

Page 291 

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. A 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. 
Bulletin 1767B-1 

Page 292 

 2. In those cases in which an RUS borrower has a majority-ownership in a subsidiary, the 

borrower must prepare consolidated financial statements in accordance with the requirements of 

Statement No. 94. These consolidated statements must also include supplementary schedules 

presenting a Balance Sheet and Income Statement for each majority-owned subsidiary included 

in the consolidated statements. 

Although Statement No. 94 requires the consolidation of majority-owned subsidiaries, Forms 7 

and 12 must be prepared on a basis consistent with the equity method of accounting for 

investments. For distribution borrowers, this requires that the investment be shown on Form 7 in 

Part C, Balance Sheet, on line 7, Investments in Subsidiary Companies, or line 9, Investments in 

Associated Organizations – Other – General Funds, as appropriate. The result of operation is 

shown in Part A, Statement of Operations, on line 23, Income (Loss) from Equity Investments. 

For generation and transmission borrowers, the investments should be shown on Form 12, in 

Section C, Balance Sheet, on Line 7, Investments in Subsidiary Companies, or Line 9, 

Investments in Associated Organizations – Other – General Funds, as appropriate. The result of 

operations should be shown in Section A, Statement of Operations, on line 30, Income (Loss) 

from Equity Investments. 

501 Patronage Capital Assignments. 

Accounting for patronage capital and margins may vary depending upon the individual 

cooperative's bylaws. The comments contained in this section relate to the application of the 

standard bylaw provisions. 

The entries required, at year's end, to record patronage capital transactions where there is no 

major merchandising program are as follows: 

Dr. 219.1, Operating Margins 

Dr. 219.2, Nonoperating margins 

 Cr. 201.2, Patronage Capital Assignable 

To record the amount of patronage capital assignable. 

Dr. 201.2, Patronage Capital Assignable 

 Cr. 201.1, Patronage Capital Credits 

To record the allocation of patronage capital to the patrons' accounts. 

The procedure for determining the amount of patronage capital assignable to the individual 

patron on a total dollar basis is as follows: 

 1. Determine the total amount to be assigned for the year (Account 201.2). 

 2. Determine patronage from electric service, the total of consumers' billings (Accounts 

440-447). 

 3. Determine the percentage factor to be used in calculating patronage capital to be 

credited to each consumer account. Divide "1" by "2". 

 4. Determine the amount of capital to be credited to each consumer. Multiply the 

individual consumer's billings for the year by the percentage factor obtained in "3" above. 
Bulletin 1767B-1 

Page 293 

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. 
Bulletin 1767B-1 

Page 294 

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 
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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 
Bulletin 1767B-1 

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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. 
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 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. 
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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 employer’s 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 
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Page 299 

 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: 
Bulletin 1767B-1 

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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 
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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. 
Bulletin 1767B-1 

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 The cost of retroactive benefits (including benefits that are granted to retirees) is the 

increase in the projected benefit obligation at the date of the amendment. Except as noted below, 

prior service cost shall be amortized by assigning an equal amount to each future period of 

service of each employee active at the date of the amendments who is expected to receive 

benefits under the plan. If all or almost all of the plan's participants are inactive, the cost of 

retroactive plan amendments affecting benefits of inactive participants shall be amortized based 

upon the remaining life expectancy of those participants rather than the remaining service period. 

 To reduce the complexity and detail of the computations required, consistent use of an 

alternative amortization approach that more rapidly reduces the unrecognized cost of retroactive 

amendments is acceptable. For example, a straight-line amortization of the cost over the average 

remaining service period of employees expected to receive benefits under the plan is acceptable. 

The alternative method used shall be disclosed. 

 In some situations, a history of regular plan amendments and other evidence may 

indicate that the period during which the employee expects to realize economic benefits from an 

amendment granting retroactive benefits is shorter than the entire remaining service period of the 

active employees. Identification of such situations requires an assessment of the individual 

circumstances and the substance of the particular plan situation. In those circumstances, the 

amortization of prior service cost shall be accelerated to reflect the more rapid expiration of the 

employer's economic benefits and to recognize the cost in the periods benefited. 

 A plan amendment can reduce rather than increase the projected benefit obligation. 

Such a reduction shall be used to reduce an existing unrecognized prior service cost, and the 

excess, if any, shall be amortized on the same basis as the cost of benefit increases. 

 e. Gains and losses are changes in the amount of either the projected benefit 

obligation or plan assets resulting from experience different from that assumed and changes in 

assumptions. Gains and losses include amounts that have been realized. Because gains and 

losses may reflect refinements in estimates as well as real changes in economic values and 

because some gains in one period may be offset by losses in another or vice versa, the 

recognition of gains and losses as components of net pension cost of the period in which they 

arise, is not required. 

 The expected return on plan assets shall be determined based upon the expected longterm rate of return on plan assets and the market-related value of plan assets. The market-related 

value of plan assets shall be either fair value or a calculated value that recognizes changes in fair 

value in a systematic and rational manner over not more than 5 years. Different ways of 

calculating market-related value may be used for different classes of assets but the manner of 

determining market-related value shall be applied consistently from year to year for each asset 

class. 

 Asset gains and losses are the differences between the actual return on assets during a 

period and the expected return on assets for that period. Assets gains and losses include both 

changes reflected in the market-related value of assets and changes not yet reflected in the 

market-related value (that is, the difference between the fair value of assets and the marketrelated 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 
Bulletin 1767B-1 

Page 303 

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 
Bulletin 1767B-1 

Page 304 

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. 
Bulletin 1767B-1 

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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. 
Bulletin 1767B-1 

Page 306 

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 
Bulletin 1767B-1 

Page 307 

 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: 
Bulletin 1767B-1 

Page 308 

 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. 
Bulletin 1767B-1 

Page 309 

 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. 
Bulletin 1767B-1 

Page 310 

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. 
Bulletin 1767B-1 

Page 311 

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. 
Bulletin 1767B-1 

Page 312 

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 
Bulletin 1767B-1 

Page 313 

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 Form 7, Financial and Statistical Report, and the Form 12, Operating Report - Financial, 

must, however, reflect the actual amounts recorded in the books and records of the borrower. 
Bulletin 1767B-1 

Page 314 

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: 
Bulletin 1767B-1 

Page 315 

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; 
Bulletin 1767B-1 

Page 316 

 2. Amortize them by equal monthly amounts over the remaining life of the old debt 

issue; or 

 3. Amortize them by equal monthly amounts over the life of the new debt issue. 

Once an election has been made, it shall be applied on a consistent basis. Regardless of the 

option selected, the amortization shall be charged to either Account 428.1 or 429.1, as 

appropriate. 

Where a regulatory authority having jurisdiction over the borrower specifically disallows the rate 

principle of amortizing gains or losses on the redemption of long-term debt without refunding, 

and does not apply the gain or loss to interest charges in computing the borrower's rates, the 

alternative method may be used to account for gains or losses relating to the redemption of longterm debt with or without refunding. The alternative method requires that gains or losses be 

recorded in Account 421, Miscellaneous Nonoperating Income, or Account 426.5, Other 

Deductions, as incurred. When the alternative method is used, the borrower 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 
Bulletin 1767B-1 

Page 317 

 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. 426.5, Other Deductions 

 Cr. 123, Investment in Associated Organizations or 

 Cr. 124, Other Investments 

To record the default, by a project, of economic development loan funds. 

Dr. 224.16, Long-Term Debt - RUS Economic Development Notes Executed 

 Cr. 131.12, Cash - General - Economic Development Funds 

To record the repayment, to RUS, of the economic development loan funds. 

The accounting journal entries required to record the transactions associated with a rural 

economic development grant are as follows: 

Dr. 131.13, Cash - General - Economic Development Grant Funds 

 Cr. 224.18, Other Long-Term Debt - Grant Funds; 

 Cr. 208, Donated Capital; or 

 Cr. 421, Miscellaneous Nonoperating Income 

To record grant funds disbursed by RUS. If the grant agreement requires 

repayment of the funds upon termination of the revolving loan program, Account 

224.18 should be credited. If the grant agreement states that there is absolutely no 

obligation for repayment upon termination of the revolving loan program, the funds 

should be accounted for as a permanent infusion of capital by crediting Account 
Bulletin 1767B-1 

Page 318 

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. 
Bulletin 1767B-1 

Page 319 

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 "payas-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 multipleemployer 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 
Bulletin 1767B-1 

Page 320 

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 
Bulletin 1767B-1 

Page 321 

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 
Bulletin 1767B-1 

Page 322 

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. 
Bulletin 1767B-1 

Page 323 

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 
Bulletin 1767B-1 

Page 324 

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-forsale 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-forsale 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. 
Bulletin 1767B-1 

Page 325 

All trading securities are reported as current assets in the balance sheet and individual held-tomaturity 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 
Bulletin 1767B-1 

Page 326 

termination of employment or reaching the age of 62 and is not recorded as an asset on the 

cooperative's records. 

Accounting Journal Entries

The journal entries required to account for the NRECA Split Dollar Life Insurance Program are 

as follows: 

Dr. 124, Other Investments 

 Cr. Various Operations, Maintenance, and Administrative Expense Accounts 

To record an increase in the cash surrender value of the insurance contract. 

or 

Dr. Various Operations, Maintenance, and Administrative Expense Accounts 

 Cr. 124, Other Investments 

To record a decrease in the cash surrender value of the insurance contract. 

Dr. Various Operations, Maintenance, and Administrative Expense Accounts 

Dr. 107, Construction Work in Progress 

Dr. 108.8, Retirement Work in Progress 

 Cr. 131.1, Cash - General 

To record the premium cost of the insurance contract. 

631 Special Early Retirement Plan.

The Special Early Retirement Plan (SERP) being offered through the National Rural Electric 

Cooperative Association (NRECA) constitutes an amendment to its Retirement and Security 

(R&S) program. The SERP is often chosen as a vehicle through which the cooperative may 

reduce the size of its workforce or replace more highly paid employees with lower paid entry 

level employees. If an employee covered by an NRECA retirement plan chose to retire before 

his/her normal retirement date, that employee would receive an actuarially reduced benefit. 

However, when a cooperative elects to offer a SERP, no such reduction is required. The 

cooperative selects the criteria under which an employee will be eligible to participate such as 

age, years of service, or a combination of age and benefit service requirements. As with other 

amendments to the R&S program, NRECA calculates the cost of the plan based upon the criteria 

selected by the cooperative and allows the cooperative to pay the cost immediately or on an 

installment basis. 

Under this plan, the employee receives full retirement benefits in the form of either an immediate 

lump-sum settlement or annuity payments. It is not unusual for the cooperative to add an 

incentive to encourage participation such as medical or life insurance, either in whole or in part, 

until age 65. The actuarial analysis provided by NRECA includes the cost of the SERP and the 

estimated reduction and/or increase in costs associated with Statement of Financial Accounting 

Standards No. 106, Employer’s Accounting for Postretirement Benefits Other Than Pensions 

(Statement No. 106). 
Bulletin 1767B-1 

Page 327 

Statement of Financial Accounting Standards No. 87, Employer’s Accounting for Pensions 

(Statement No. 87)

In accordance with the provisions of Statement No. 87, the costs associated with an amendment 

to a multiemployer plan are recognized when they become due and payable. Since NRECA 

calculates the amount due and payable at the time of the amendment, the entire amount due, 

whether paid immediately or financed through NRECA or any other institution, must be 

recognized as an expense at that time. This cost may, however, be deferred in accordance with 

the provisions of Statement of Financial Accounting Standards No. 71, Accounting for the 

Effects of Certain Types of Regulation (Statement No. 71). 

Accounting Journal Entries

The journal entry required to record the additional pension costs associated with the SERP is as 

follows: 

Dr. Various Operations, Maintenance, and Administrative Expense Accounts 

Dr. 107, Construction Work in Progress 

Dr. 108.8, Retirement Work in Progress 

 Cr. 131.1, Cash - General 

 or 

 Cr. 224, Other Long-Term Debt 

To record the prior service pension costs incurred as a result of adopting the SERP. 

If the borrower elects to defer and amortize the cost in accordance with Statement No. 71, the 

following entries shall be recorded: 

Dr. 182.3 Other Regulatory Assets 

 Cr. 131.1, Cash - General 

 or 

 Cr. 224, Other Long-Term Debt 

To record, under the provisions of Statement No. 71, the deferral of the prior 

service pension costs incurred as a result of adopting the SERP. 

Dr. Various Operations, Maintenance, and Administrative Expense Accounts 

Dr. 107, Construction Work in Progress 

Dr. 108.8, Retirement Work in Progress 

 Cr. 182.3, Other Regulatory Assets 

To record the amortization of deferred prior service pension costs as they are 

recovered through rates in accordance with Statement No. 71. 

Statement No. 106

In the event that net reductions in postretirement benefits result from this plan amendment, the 

reductions are recognized as follows: 

 1. The amount of the reduction shall first reduce any existing unrecognized prior service 

cost; 
Bulletin 1767B-1 

Page 328 

 2. Any remaining reductions shall next reduce any unrecognized transition obligation; 

and 

 3. Any remaining reduction shall be recognized in a manner consistent with the 

accounting for prior service postretirement benefit costs. 

In accordance with Statement No. 106, prior service postretirement benefit costs are recognized 

in equal amounts in each remaining year of service for active plan participants. Because it is an 

off-balance sheet item, only a memorandum entry is required to reduce the amount of 

unrecognized prior service cost. 

At adoption, Statement No. 106 permitted the recognition of the transition obligation in one of 

two ways. The transition obligation was recognized over the longer of the average remaining 

service period of current plan participants or 20 years, or it may have been recognized 

immediately. If the delayed recognition option was chosen under Statement No. 106, this, too, 

was an off-balance sheet item that requires only a memorandum entry to reduce the amount of 

unrecognized transition obligation. However, if the immediate recognition option was chosen, 

the cooperative either recorded the expense in that year or, with RUS approval, deferred the 

expense under the provisions of Statement No. 71. If the expense were recorded, in total, in the 

year of adoption, no unrecognized transition obligation remains to reduce. If, however, the 

transition obligation was deferred in accordance with Statement No. 71, the journal entry 

required to effect the reduction in Statement No. 106 expense is as follows: 

Dr. 228.3, Accumulated Provision for Pensions and Benefits 

 Cr. 182.3, Other Regulatory Assets 

To record a reduction in the deferred Statement No. 106 transition obligation 

resulting from the adoption of the SERP. 

 Note: The dollar value of this entry must not exceed the deferral shown on the balance 

sheet. 

If, after the two previous reductions have been made, any net credit remains, it shall be 

recognized in a manner consistent with prior service costs; that is, as an off balance sheet item 

that is amortized over the remaining service lives (to full eligibility) of the active plan 

participants. The annual amortization reduces amounts normally charged to the various 

operations, maintenance, and administrative expense accounts and Account 228.3 as 

postretirement benefit expenses. 

633 Cushion of Credit 

On December 21, 1987, Section 313, Cushion of Credits Payments Program, was added to the 

Rural Electrification Act. Cushion of credit regulations are located in The Code of Federal 

Regulations (CFR) 7 CFR 1785. A cushion of credit payment is a voluntary unscheduled 

payment by a borrower in excess of amounts due and payable. A cushion of credit account is 

automatically established by RUS for each borrower who makes a payment after October 1, 

1987, in excess of amounts then due on a RUS note. Payments received in the month in which 

an installment is due will be applied to the installment due. However, if the regular installment 

payment is received at a later date in the month, the first payment received will be applied 

retroactively to the cushion of credit account and the second will be applied to the installment 

due. By law, cushion of credit accounts earn five per cent interest annually, accrued daily and 

posted quarterly. Although the interest earned will appear as a reduction in the interest billed on 

the borrower’s RUS notes and will be separately shown on Form 694, Statement of Interest and 
Bulletin 1767B-1 

Page 329 

Principal Due, interest billed must be adjusted by adding back the interest earned while principal 

is reduced by the amount of the interest earned before recording the debt payment. Below is an 

example of the adjustment required: 

 As Billed Adjustment Adjusted 

Payment Billed $1,000 $1,000 

Principal $ 800 -$50 $750 

Interest *$ 200 $50 $250 

* Includes reduction of $50 for interest earned on cushion of credit account. 

Cushion of credit is intended to enable the borrower to deposit funds and have those funds 

available to make scheduled payments (or installments) only. A borrower may not have more 

cushion of credit funds, including accrued interest, than their entire RUS debt which includes 

loans made in Rural Electric and Telephone (RET) and Federal Financing Bank (FFB). If a 

borrower makes less than or no payment when their billing invoice is due, cushion of credit will 

automatically add to or make their payment systematically for them. 

Cushion of credit is not available to use for prepayment of loan accounts before maturity except 

for the following situations: 

1. The total amount of cushion of credit principal with accrued interest equals the 

borrower’s total debt 

2. The borrower intends to prepay all remaining debt using a combination of payment with 

all cushion of credit funds available. 

Accounting Requirements

All payments made to a cushion of credit account should be recorded as follows: 

Dr. 224.6, Advance Payments Unapplied – Long-Term Debt – Debit 

Cr. 131.1, Cash – General 

All interest earned on the balance of funds in the account should be recorded as follows: 

 Dr. 224.6, Advance Payments Unapplied – Long-Term Debt – Debit 

 Cr. 419, Interest and Dividend Income 

Reporting Requirements

Previously, RUS required that the balance in the cushion of credit account be reported, on the 

Form 7, Financial and Statistical Report, as a reduction of the RUS long-term debt balance. On 

January 15, 2003, RUS issued letter guidance permitting a proportionate share of the cushion of 

credit balance be reported as a reduction in Current Maturities Long-Term Debt. Additionally, 

beginning with calendar year 2006 submissions, Form 7 has been revised to include a separate 

line for cushion of credit balances within the long-term debt section of Part C. 

For purposes of the audited financial statements, presentation of the balance of the cushion of 

credit account as a long-term investment is an acceptable alternative to RUS. 
Bulletin 1767B-1 

Page 330 

25 Subpart D-Preservation of Records 

26 §1767.66 Purpose 

This subpart establishes policies and procedures for the effective preservation and efficient 

maintenance of financial records of Electric borrowers. 

27 §1767.67 General 

(a) RUS endorses the guidelines as described by the Federal Energy Regulatory Commission’s 

(FERC) “Regulations to Govern the Preservation of Records of Public Utilities and Licensees.” 

The FERC guidelines can be found in 18 CFR Part 125. 

 (b) The regulations prescribed in this part apply to all books of account, contracts, 

records, memoranda, documents, papers, and correspondence prepared by or on behalf of the 

borrower as well as those which come into its possession in connection with the acquisition of 

property by purchase, consolidation, merger, etc. 

 (c) The regulations prescribed in this part shall not be construed as excusing 

compliance with any other lawful requirements for the preservation of records. 

28 §1767.68 Designation of a supervisory official 

Each borrower shall designate one or more officials to supervise the preservation of its records. 

29 §1767.69 Index of records 

 (a) Each borrower shall maintain a master index of records. The master index shall 

identify the records retained, the related retention period, and the locations where the records are 

maintained. The master index shall be subject to review by RUS and RUS shall reserve the right 

to add records, or lengthen retention periods upon finding that retention periods may be 

insufficient for its purposes. 

 (b) At each office where records are kept or stored the borrower shall arrange, file, and 

index the records currently at that site so that they may be readily identified and made available 

to representatives of RUS. 

30 §1767.70 Record storage media 

The media used to capture and store the data will play an important part of each RUS borrower. 

Each borrower has the flexibility to select its own storage media. The following are required: 

 (a) The storage media shall have a life expectancy at least equal to the applicable 

retention period provided for in the master index of records, unless there is quality transfer from 

one media to another with no loss of data. Each transfer of data from one media to another shall 

be verified for accuracy and documented. 

 (b) Each borrower shall implement internal control procedures that assure the reliability 

of, and ready access to, data stored on machine-readable media. The borrower’s internal control 

procedures shall be documented by a responsible supervisory official. 

 (c) Records shall be indexed and retained in such a manner that they are easily 

accessible. 
Bulletin 1767B-1 

Page 331 

 (d) The borrower shall have the hardware and software available to locate, identify, and 

reproduce the records in readable form without loss of clarity. 

 (e) At the expiration of the retention period, the borrower may use any appropriate 

method to destroy records. 

 (f) When any records are lost or destroyed before the expiration of the retention period 

set forth in the mater index, a certified statement shall be added to the master index listing, as far 

as may be determined, the records lost or destroyed and describing the circumstances of the 

premature loss or destruction. 

31 §1767.71 Periods of retention 

 (a) Records of RUS borrowers of a kind not listed in the FERC regulations should be 

governed by those applicable to the closest similar records. Financial requirement and 

expenditure statements, which are not specifically covered by FERC regulations are 

recommended to be kept for one year after the “as of date” of RUS’s loan fund and accounting 

review. 

 (b) Consumer accounts’ records should be kept for those years for which patronage 

capital has not been allocated. 

 (c) Records supporting construction financed by RUS shall be retained until audited 

and approved by RUS. 

 (d) Records related to plant in service must be retained until the facilities are 

permanently removed from utility service, all removal and restoration activities are completed, 

and all costs are retired from the accounting records unless accounting adjustments resulting 

from reclassification and original costs studies have been approved by RUS or other regulatory 

body having jurisdiction. 

 (e) Life and mortality study data for depreciation purposes must be retained for 25 

years or for 10 years after plant is retired whichever is longer. 

32 §1767.72-1767.85 [Reserved]