Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-10-14
ORDERS CHANGE
. IN TRACTION BOOKS
Utilities Body's Decision De-
signed to Obtain Uni
formity in Accounting.

The Public Utilities Commission to-
day ordered the Capital Traction and
Washington Railway 81 Electric Cos to
make substantial changes in their
methods of accounting. principally with
reference to the capital account of each
concern. The changes are in matters
Of substance and in matters of detail.
In the former the Washington Railway
g. Electric Co. will be required to make
the more radical changes in its pres
ent methods, as the Capital Traction
Co.'S methods are close 10 the stand
ards set up by the commission. In the
latter both companies are equally af-
fected. The order takes effect Janu-
airy /, 1929. The chief object sought
by the order Is uniformity Of account
ing among the two companies; and in
that respect the order is one of the
first fruits of the recent car fare hear
ings, at which it was next to impossible
adequately to compare figures submit
ted by the accountants of the reSpec-
tive companies. owing to varying inter-
pretations given by the companies to
accounts of the same name.
Most Substantial Changes.
The most substantial changes ordered
were: t
i. Expenditures for buying property
must be accounted for on the basis Of
actual cost
2. In the case of the retirement Of
any piece of property other than land
and its replacement with new piece.
of property, the new, property shall be
considered a betterment, and capital
account shall be charged with the en-
tire cost of the new property.
3. The cost of the property replaced,
less salvage value, If any. but includ-
ing cost of overheads, shall then be
! retired from the account
The commission ordered that any re-
| placement of all or substantially all of
underground conduit single track $50
! feet or more in length; or an overhead
| trolley track 500 feet or more in length
shall constitute renewal of property
| as provided for above. Salvage re-
naming in old property replaced is to
received by the company for selling 1t
as scrap, or its value to the company
based on fair market price"
Allowed Extra Labor Charge.
The companies are allowed to charge
| an extra amount for labor on track re-
newal work done in daytime under
! traffic which is normally considerably
more costly than work done otherwise.
| This amount is to be credited to the.
| cost Of the job and charged to the ap-
propriate operating cost account.
| The companies are allowed TO set up
| a uniform percentage to be added to.
the cost of work under non-trafic con-.
! ditions to represent the cost under traf-
fic conditions, but If they elect to use.
| this method, theyo must inform the
/ commission of the manner in which
| they reached their percentage figure.
| The companies are required TO keep
| separate the cost of retiring tie old
property and the cost OF installing the
! new. Where In the nature of the case
| this cannot be done, they are required
| to assign the costs by estimate under
certain restrictions.
The amount to be retired from capital
! account for any retirement is the actual
ledger value of the property to be re-
tired. Where the property is so old that
it cannot. be determined exactly from
| the books, then the figure used shall
| correspond with that in the inventory
| of property made by the commissions
| engineers when the companies were
| valued. If this figure is not available,
| careful estimate must be made. In all
| CdSCo VI Tie at WHICH
| the property is retired must include
! overheads. The retirement of overheads
| in retirement costs has not been prac-
! ticed by the companies heretofore. and
! according to Commissioner HarIeigh H.
| Hartman there are doubtless numerous
| unidentifiable cases of amounts left in
| capital account that should have been
| taken out In the way OF overheads on
! retired property. sa
Mr.. Hartman explained that the chief
difference in accounting method be-
| tween the two companies was that the
| Capital Traction Co. cleared practically
| everything through capital account and
| the Washington Railway & Electric Co.
| through operating expenses. The new
| system. he said, win lean more to the
| Capital fractions method. The require
ment that all additions must be made
| through capital account at actual cost
! will also tend to make the companies
capital accounts more nearly approach
reproduction estimate of the value of
| their physical property.