New Mexico Administrative Code › Title 17 - PUBLIC UTILITIES AND UTILITY SERVICES › Chapter 12 - WATER SERVICES › Part 720 - UNIFORM SYSTEMS OF ACCOUNTS AND ANNUAL REPORT FORMS FOR WATER UTILITIES › Section 17.12.720.18 - INCOME ACCOUNTS

Current through Register Vol. 35, No. 13, July 16, 2024
A.
				Utility Operating Income:
(1) 400 - Operating
				Revenues: There shall be shown under this caption the total amount included in
				the operating revenue accounts provided herein and in similar accounts for
				other utility department. Separate subaccounts shall be maintained for each
				utility department.
(2) 401 -
				Operation and Maintenance Expense: There shall be shown under this caption the
				total amount included in the expense accounts provided herein.
(3) 403 - Depreciation Expense:
(a) This account shall include the amount of
				depreciation expense for all classes of depreciable utility plant in
				service.
(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 also such records as will reflect
				the percentage of salvage and cost of removal for property retired.
(c) Note A: Depreciation expense applicable
				to property included in account 104, Utility Plant Leased to Others, shall be
				charged to account 413, Income from Utility Plant Leased to Others.
(4) 408 - Taxes Other Than Income
				Taxes:
(a) This account shall include the
				amount of ad valorem, gross revenue or gross receipts taxes, regulatory agency
				general assessments for purposes of public utility regulation, 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) This account shall be charged in each
				accounting period with the amount of taxes applicable thereto, with concurrent
				credits to account 236, Taxes Accrued, or account 166, Prepayments, as
				appropriate. When it is not possible to determine the exact amount of taxes,
				the amount shall be estimated and adjustments made in current accruals as the
				actual tax levies become known.
(c)
				The charges to this account 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 a number of utility services, taxes includable in this
				account 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.
(5) 409 - Income
				Taxes:
(a) This account shall include the
				amount of state and federal income taxes 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 amount of taxes becomes known, the current tax
				accruals shall be adjusted by a charge or credit to this account, unless such
				adjustment is properly includable in account 439, Adjustments to Retained
				Earnings, so that this account as nearly as can be ascertained shall include
				the actual taxes payable by the utility. (See General Instruction 9 for prior
				period adjustment.)
(b) The
				accruals for state and federal income taxes shall be apportioned to Utility
				Operating Income (by department), Other Income and Deductions, and
				Extraordinary Items so that, as nearly as practicable, each tax shall be
				included in the expenses of the utility department, Other Income and
				Deductions, or Extraordinary Items, the income from which gave rise to the tax.
				The income tax effect of amounts recorded in account 439, Adjustments to
				Retained Earnings, shall be recorded in that account. The tax effects relating
				to interest charges, other than interest specifically applicable to
				indebtedness on property in accounts 121 and 124, shall be included in account
				409, Income Taxes, Utility Operating Income.
(c) Note A: Taxes assumed by the utility on
				interest shall be charged to account 431, Other Interest Expense.
(d) Note B: Interest on tax refunds or
				deficiencies shall not be included in this account but in account 419, Interest
				and Dividend Income, or account 431, Other Interest Expense, as
				appropriate.
(6) 410 -
				Provision for Deferred Income Taxes: This account shall be debited, and
				Accumulated Deferred Income Taxes shall be credited with an amount equal to any
				deferral of taxes on income as provided by the texts of account 283.
(7) 412 - Investment Tax Credits:
(a) This account shall be debited with the
				total amount of investment tax credits used in calculating the reported current
				year's income taxes, except to the extent that such investment tax credits are
				to be passed on to customers currently, as approved or directed by the
				Commission.
(i) Where the investment tax
				credits are passed on to customers currently, they are to be treated solely as
				a reduction in income taxes for the year and no entries would be
				necessary.
(ii) When a company is
				using deferral accounting for the investment tax credits allowed for the
				current year, account 255, Accumulated Deferred Investment Tax Credits, shall
				be credited with an equal amount of the investment tax credits debited to this
				account.
(b) A company
				which has deferred its investment tax credits will amortize these deferred tax
				amounts by crediting this account and debiting account 255. Such annual
				amortization shall be allocated proportionately over the average useful life of
				the property to which the tax credits relate or such lesser period as may be
				adopted and consistently used by the company.
(c) This account shall be kept so that the
				debits and credits relating to the utility and to each nonutility operation may
				be readily identified.
(8) 413 - Income from Utility Plant Leased to
				Others:
(a) This account shall include
				revenues from utility property leased by the utility to others, and which
				property is properly includable in account 104, Utility Plant Leased to Others,
				and the expenses attributable to such property. Records shall show separately
				revenues and expenses.
(b) Note:
				Related operating taxes shall be recorded in account 408, Taxes Other than
				Income Taxes, Utility Operating Income, and income taxes shall be recorded in
				account 409, Income Taxes, Utility Operating Income, identified
				separately.
(9) 414 -
				Gains (Losses) from Disposition of Utility Property:
(a) This account shall include, when
				authorized or required by the Commission, gains and losses from the sale,
				conveyance, exchange, or transfer of utility property to another. (See Utility
				Plant Instructions 4, 6, and 9 and account 422, Gains (Losses) from Disposition
				of Property.) The income tax effect attributable to gains and losses recorded
				in this account shall be recorded in account 409, Income Taxes, Utility
				Operating Income.
(b) This account
				shall be maintained so that the transactions and details underlying each gain
				or loss will be readily identifiable.