Illinois Administrative Code › Title 83 - PUBLIC UTILITIES › Part 650 - UNIFORM SYSTEM OF ACCOUNTS FOR SEWER UTILITIES › Subpart B - ADDITIONS TO AND DELETIONS FROM NARUC UNIFORM SYSTEM OF ACCOUNTS › Section 650.175 - Accounting Instruction 39

Current through Register Vol. 48, No. 28, July 12, 2024
Add the following material as Accounting Instruction 39,
				  "Transition Rules - Contribution in Aid of Construction":
"A. The transition rules are to govern the
				accounting for Contributions in Aid of Construction. They are based on the premise
				that the integrity of the 'Contribution' account was preserved during the period
				encompassed by the Commission's ratemaking policy of allowance of depreciation
				expense as a recoverable operation expense on property which was the contra to the
				'Contribution' account.
B. The rules
				provide for recording the impairment of the 'Contribution' account which occurred
				subsequent to the change in Commission policy of disallowance of depreciation
				expense on 'contributed property' for ratemaking purposes.
1. Subsidiary records will be maintained for
				Account 271, 'Contributions in Aid of Construction' and Account 272, 'Accumulated
				Amortization of Contributions in Aid of Construction.'
Subsidiary accounts of Account 271 shall segregate the
				  Contributions in Aid of Construction recorded prior to the change in ratemaking
				  policy from amounts recorded subsequent thereto.
The subsidiary accounts of Account 272 shall be maintained to
				  provide a segregation of the accumulated amortization charges which relate to or
				  correlate to the 'Contribution' segregated balances.
The 'pre' and 'post' segregation categories will coincide with the
				  effective date of the first definitive Commission order applicable to the subject
				  utility which applies the ratemaking disallowance policy.
2. Utilities that discontinued recording
				depreciation expense in their books of account subsequent to its disallowance for
				ratemaking purposes shall record the impairment of the 'Contribution' account for
				the period from date of disallowance to December 31, 1986 by debit Account 272,
				'Accumulated Amortization of Contributions in Aid of Construction' and credit to the
				appropriate subaccount of Account 108, 'Accumulated Depreciation.'
3. Utilities that continued to record depreciation
				expense in their books of account subsequent to its disallowance for ratemaking
				shall record the impairment of the 'Contribution' account by debit to Account 272,
				'Accumulated Amortization of Contributions in Aid of Construction' and credit to
				Account 439, 'Adjustments to Retained Earnings.' It shall cover the period from date
				of disallowance to December 31, 1986.
4.
				The amortization of the 'Pre' disallowance balance of Account 271 shall continue
				until it is fully amortized at which time it shall be written off against its
				related Account 272 balance.
5. Within
				six months of the effective date of this System of Accounts (83 Ill. Adm. Code 650),
				each utility shall submit its proposed journal entries for recording the
				implementation of the transition rules to the Director of Accounting of the
				Commission to ascertain whether the utility has complied with Accounting Instruction
				39.
6. Should an impairment of the
				'Contribution' account have occurred prior to the period covered by the transition
				rules in this Accounting Instruction, the utility shall submit its proposed journal
				entries to record such impairment accompanied by a complete explanation to the
				Director of Accounting for acceptance and approval. The Director of Accounting shall
				accept and approve the journal entries if an impairment has occurred and if the
				entries reflect the level of impairment."