Federal Register / Vol. 60, No. 78 / Monday, April 24, 1995 / Rules and Regulations 20021

PW ASB No. A6202, dated February 20,

1995.

(2) Remove from service CCOC’s that

exhibit cracking in accordance with Section

2.B of PW ASB No. A6202, dated February

20, 1995.

(d) Compliance with paragraph (c) of this

AD is an acceptable alternative to performing

the borescope inspection required by

paragraph (a) or (b) of this AD, as applicable.

(e) For the purpose of this AD, accessibility

of the CCOC is defined as separation of the

‘‘J’’ and ‘‘K’’ flanges and removal of the outer

split fan ducts.

(f) An alternative method of compliance or

adjustment of the compliance time that

provides an acceptable level of safety may be

used if approved by the Manager, Engine

Certification Office. The request should be

forwarded through an appropriate FAA

Principal Maintenance Inspector, who may

add comments and then send it to the

Manager, Engine Certification Office.

Note: Information concerning the existence

of approved alternative methods of

compliance with this airworthiness directive,

if any, may be obtained from the Engine

Certification Office.

(g) Special flight permits may be issued in

accordance with §§ 21.197 and 21.199 of the

Federal Aviation Regulations (14 CFR 21.197

and 21.199) to operate the aircraft to a

location where the requirements of this AD

can be accomplished.

(h) The inspections of the CCOC shall be

done in accordance with the following

service document:

Document No. Pages Date

PW ASB No.

A6202.

1–11 Feb. 20, 1995.

Total pages:

11.

This incorporation by reference was

approved by the Director of the Federal

Register in accordance with 5 U.S.C. 552(a)

and 1 CFR part 51. Copies may be obtained

from Pratt & Whitney, 400 Main St, East

Hartford, CT 06108. Copies may be inspected

at the FAA, New England Region, Office of

the Assistant Chief Counsel, 12 New England

Executive Park, Burlington, MA; or at the

Office of the Federal Register, 800 North

Capitol Street, NW., suite 700, Washington,

DC.

(i) This amendment becomes effective on

May 9, 1995.

Issued in Burlington, Massachusetts, on

April 11, 1995.

James C. Jones,

Acting Manager, Engine and Propeller

Directorate, Aircraft Certification Service.

[FR Doc. 95–9471 Filed 4–21–95; 8:45 am]

BILLING CODE 4910–13–P

14 CFR Part 71

[Airspace Docket No. 94–AGL–36]

Modification of Class D Airspace

Areas; Detroit, MI, and Alton, IL

AGENCY: Federal Aviation

Administration (FAA) DOT.

ACTION: Final rule.

SUMMARY: This action modifies the Class

D airspace area at Willow Run Airport,

Detroit, MI, and St. Louis Regional

Airport, Alton, IL. The Class D airspace

area at Willow Run Airport, Detroit, MI,

will be modified by lowering the

vertical limit of the Class D airspace

area up to but not including the base

altitude of the overlying Detroit, MI,

Class B airspace area. The Class D

airspace area description at St. Louis

Regional Airport, Alton, IL, will be

modified by excluding that airspace

within the Lambert-St. Louis

International Airport, MO, Class B

airspace area. Airspace reclassification

has necessitated new guidelines for

depicting and describing Class D

airspace area that underlie Class B

airspace areas. The intended effect is to

eliminate pilot confusion by modifying

the controlled airspace areas at Willow

Run Airport, Detroit, MI, and St. Louis

Regional Airport, Alton, IL.

EFFECTIVE DATE: 0901 UTC, July 20,

1995.

FOR FURTHER INFORMATION CONTACT:

Jeffrey L. Griffith, Air Traffic Division,

System Management Branch, AGL–530,

Federal Aviation Administration, 2300

East Devon Avenue, Des Plaines, Illinois

60018, telephone (708) 294–7568.

SUPPLEMENTARY INFORMATION:

History

On January 6, 1995, the FAA

proposed to amend part 71 of the

Federal Aviation Regulations (14 CFR

part 71) to modify the Class D airspace

area at Willow Run Airport, Detroit, MI,

and St. Louis Regional Airport, Alton, IL

(60 FR 2043). No comment objecting to

the proposal were received.

The coordinates for this airspace

docket as based on North American

Datum 83. Class D airspace designations

are published in Paragraph 5000 of FAA

Order 7400.9B dated July 18, 1994, and

effective September 16, 1994, which is

incorporated by reference in 14 CFR

71.1. The Class D airspace designations

listed in this document will be

published subsequently in the Order.

The Rule

This amendment to part 71 of the

Federal Aviation Regulations modifies

the Class D airspace areas at Willow

Run Airport, Detroit, MI, and St. Louis

Regional Airport, Alton, IL. The Class D

airspace area at Willow Run Airport,

Detroit, MI, will be modified by

lowering the vertical limited of the Class

D airspace area up to not including the

base altitude of the overlying Detroit,

MI, Class B airspace area. The Class D

airspace area description at St. Louis

Regional Airport, Alton, IL, will be

modified by excluding that airspace

within the Lambert-St. Louis

International Airport, MO, Class B

airspace area. Airspace reclassification,

effective September 16, 1993, has

necessitated new guidelines for

depicting and describing Class D

airspace areas that underlie Class B

airspace areas. The intended effect is to

eliminate pilot confusion by modifying

the controlled airspace areas at Willow

Run Airport, Detroit, MI, and St. Louis

Regional Airport, Alton, IL.

The FAA has determined that this

regulation only involves an established

body of technical regulations for the

frequent and routine amendments are

necessary to keep them operationally

current. It, therefore—(1) is not a

‘‘significant regulatory action’’ under

Executive Order 12866; (2) is not a

‘‘significant rule’’ under DOT

Regulatory Policies and Procedures (44

FR 11034; February 26, 1979); and (3)

does not warrant preparation of a

regulatory evaluation as the anticipated

impact is so minimal. Since this is a

routine matter that will only effect air

traffic procedures and air navigation, it

is certified that this rule will not have

a significant economic impact on a

substantial number of small entities

under the criteria of the Regulatory

Flexibility Act.

List of Subjects in 14 CFR Part 71

Airspace, Incorporation by reference,

Navigation (air).

Adoption of the Amendment

In consideration of the foregoing, the

Federal Aviation Administration

amends 14 CFR part 71 as follows:

PART 71—[AMENDED]

1. The authority citation for 14 CFR

part 71 continues to read as follows:

Authority: 49 U.S.C. app. 1348(a), 1354(a),

1510; E.O. 10854, 24 FR 9565, 3 CFR, 1959–

1963 Comp., p. 389; 49 U.S.C. 106(g); 14 CFR

11.69.

§ 71.1 [Amended]

2. The incorporation by reference in

14 CFR 71.1 of the Federal Aviation

Administration Order 7400.9B, Airspace

Designations and Reporting Points,

dated July 18, 1994, and effective
20022 Federal Register / Vol. 60, No. 78 / Monday, April 24, 1995 / Rules and Regulations

1Paragraph 3 of SFAS 76 states that ‘‘[a] debtor

shall consider debt to be extinguished for financial

reporting purposes in the following circumstances:

a. The debtor pays for creditor and is relieved of

all of its obligations with respect to the debt. This

includes the debtor’s reacquisition of its

outstanding securities in the public securities

markets, regardless of whether the securities are

cancelled or held as so-called treasury bonds.

b. The debtor is legally released from being the

primary obligor under the debt either judicially or

by the creditor and its is probable that the debtor

will not be required to make future payments with

respect to that debt under any guarantees. (footnotes

omitted)

c. The debtor irrevocably places cash or other

assets in a trust to be used solely for satisfying

scheduled payments of both the interest and

principal of a specific obligation and the possibility

that the debtor will be required to make future

payments with respect to the debt is remote. In this

circumstance, debt is extinguished even though the

debtor is not legally released from being the

primary obligor under the debt obligations.’’

2The extinguishment of a debt obligation

subsequent to the balance sheet date but prior to the

issuance of financial statements reporting as of and

for the period ended on the balance sheet date

should not result in adjustment to those financial

statements.

September 16, 1994, is amended as

follows:

Paragraph 500 General

* * * * *

AGL MI D Detroit, MI [Revised]

Detroit, Willow Run Airport, MI

(Lat. 42°14′16′′ N., long. 83°31′50′′ W.)

That airspace extending upward from the

surface to but not including 3,000 feet MSL

within a 4.4-mile radius of Willow Run

Airport, excluding that airspace within the

Detroit, MI, Class B airspace area.

* * * * *

AGL IL D Alton, IL [Revised]

Alton, St. Louis Regional Airport, IL

(Lat. 38°53′25′′ N., long. 90°02′45′′ W.)

That airspace extending upward from the

surface to and including 3,000 feet MSL

within a 4.2-mile radius of the St. Louis

Regional Airport, excluding that airspace

within the Lambert-St. Louis International

Airport, MO, Class B airspace area. The Class

D airspace is effective during the specific

dates and times established in advance by a

Notice to Airmen. The effective dates and

times will thereafter be continuously

published in the Airport/Facility Directory.

* * * * *

Issued in Des Plaines, Illinois on April 11,

1995.

Roger Wall,

Manager, Air Traffic Division.

[FR Doc. 95–10042 Filed 4–21–95; 8:45 am]

BILLING CODE 4910–13–M

SECURITIES AND EXCHANGE

COMMISSION

17 CFR Part 211

[Release No. SAB 94]

Staff Accounting Bulletin No. 94

AGENCY: Securities and Exchange

Commission.

ACTION: Publication of staff accounting

bulletin.

SUMMARY: The interpretations in this

staff accounting bulletin express the

views of the staff regarding the period

in which a gain or loss is recognized on

the early extinguishment of debt.

EFFECTIVE DATE: April 18, 1995.

FOR FURTHER INFORMATION CONTACT:

Tracey Barber, Office of Chief

Accountant (202) 942–4400, or Douglas

Tanner, Division of Corporation Finance

(202) 942–2960, Securities and

Exchange Commission, 450 Fifth Street

NW., Washington, DC 20549.

SUPPLEMENTARY INFORMATION: The

statements in staff accounting bulletins

are not rules or interpretations of the

Commission nor are they published as

bearing the Commission’s official

approval. They represent interpretations

and practices followed by the Division

of Corporation Finance and the Office of

the Chief Accountant in administering

the disclosure requirements of the

Federal securities laws.

Margaret H. McFarland,

Deputy Secretary.

PART 211—[AMENDED]

Accordingly, Part 211 of Title 17 of

the Code of Federal Regulations is

amended by adding Staff Accounting

Bulletin No. 94 to the table found in

Subpart B.

Staff Accounting Bulletin No. 94

The staff hereby adds Section AA to

Topic 5 of the Staff Accounting Bulletin

Series. Topic 5–AA provides guidance

regarding the period in which a gain or

loss is recognized on the early

extinguishment of debt.

Topic 5: Miscellaneous Accounting

* * * * *

AA. Recognition of a Gain or Loss on Early

Extinguishment of Debt

Facts: In the fourth quarter of its fiscal

year, a registrant announces its intent to call

for redemption certain of its outstanding debt

obligations. By their terms, the debt

obligations are not callable until the third

quarter of the subsequent fiscal year. The

obligations will be redeemed for an amount

that exceeds the net amount at which they

are carried on the registrant’s balance sheet.

The debt extinguishment would not be

deemed a troubled debt restructuring

addressed by Statement of Financial

Accounting Standards No. 15, ‘‘Accounting

by Debtors and Creditors for Troubled Debt

Restructurings.’’

Question: Would the staff object if the

registrant recorded the loss expected to result

from redemption of the debt obligations (the

excess of the reacquisition cost over the net

carrying amount of the extinguished debt) in

the period that it announces its intent to call

the debt for redemption?

Interpretive Response: Yes. Accounting

Principles Board Opinion No. 26, ‘‘Early

Extinguishment of Debt,’’ (APB 26) and its

amendments, including, among others,

Statement of Financial Accounting

Standards No. 76, ‘‘Extinguishment of Debt,’’

(SFAS 76) govern the accounting and

disclosure for extinguishment of debt.

Pursuant to APB 26, the gain or loss from an

extinguishment of debt ‘‘should be

recognized currently in income of the period

of extinguishment.’’ Paragraph 3 of SFAS 76

identifies the circumstances under which a

debt obligation would be considered

extinguished.1 The staff would object to

recognition of a gain or loss from a debt

extinguishment in a period other than the

period in which the debt is considered

extinguished.2 Disclosure regarding a

planned extinguishment and its likely effects

would be required in footnotes to the

financial statements and in Management’s

Discussion and Analysis to the extent

material. In periods preceding

extinguishment, interest expense and other

carrying costs of the debt should be

recognized in accordance with the terms of

the instrument. Deferred debt issue costs and

debt discount or premium would continue to

be amortized based on the life of the debt that

was assumed when the obligation initially

was recorded.

Some registrants have suggested that

Statement of Financial Accounting

Standards No. 5, ‘‘Accounting for

Contingencies,’’ (SFAS 5) requires

recognition of an estimated loss on

extinguishment when the extinguishment

becomes probable, such as upon an issuer’s

announcement of a plan to call the debt. The

staff does not believe that SFAS 5 supersedes

or conflicts with other authoritative literature

providing specific guidance concerning the

accounting for debt extinguishment. A

probable and estimable loss is recognized

under SFAS 5 if, and only if, an asset has

been impaired or a liability had been

incurred at the balance sheet date. The staff

believes that announcement of an intent to

extinguish a liability in the future does not,

by itself, result in a requirement to recognize

a loss. Further, the staff believes that an

issuer’s irrevocable offer to repurchase a debt

obligation is not sufficient to result in the

debt’s extinguishment for accounting

purposes. A debt holder’s acceptance of that

offer at or prior to the balance sheet date by

means of tendering the security and

surrendering all rights under the instrument’s

terms, however, would be considered an

extinguishment of that debt. In the case of an

issuer’s call of a debt obligation (including an

original issue discount obligation),

extinguishment is not considered to have

occurred before interest ceases to accrue or

accrete under the terms of the obligation as

a result of the call. In any case, loss

recognition is not elective under SFAS 5. The

accounting consequence for an issuer that