Goto Section: 32.1500 | 32.2001 | Table of Contents
Revised as of September 1, 2021
Goto Year:2020 |
§ 32.2000 Instructions for telecommunications plant accounts.
(a) Purpose of telecommunications plant accounts. (1) The
telecommunications plant accounts (2001 to 2007 inclusive) are designed
to show the investment in the company's tangible and intangible
telecommunications plant which ordinarily has a service life of more
than one year, including such plant whether used by the company or
others in providing telecommunications service.
(2) The telecommunications plant accounts shall not include the cost or
other value of telecommunications plant contributed to the company.
Contributions in the form of money or its equivalent toward the
construction of telecommunications plant shall be credited to the
accounts charged with the cost of such construction. Amounts of
non-recurring reimbursements based on the cost of plant or equipment
furnished in rendering service to a customer shall be credited to the
accounts charged with the cost of the plant or equipment. Amounts
received for construction which are ultimately to be repaid wholly or
in part, shall be credited to Account 4300, Other long-term liabilities
and deferred credits; when final determination has been made as to the
amount to be returned, any unrefunded amounts shall be credited to the
accounts charged with the cost of such construction. Amounts received
for the construction of plant, the ownership of which rests with or
will revert to others, shall be credited to the accounts charged with
the cost of such construction. (Note also Account 7100, Other operating
income and expense.)
(3) When telecommunications plant ordinarily having a service life of
more than one year is installed for temporary use in providing
telecommunications service, it shall be accounted for in the same
manner as plant having a service life of more than one year. This
includes temporary installations of plant (such as poles, wire and
cable) installed to maintain service during the progress of highway
reconstruction or during interruptions due to storms or other
casualties, equipment used for the training of operators, equipment
used to provide intercepting positions in central offices to handle
traffic for a short period following extensive system changes and
similar installations of property used to provide telecommunications
(b) Telecommunications plant acquired. (1) Property, plant and
equipment acquired from an entity, whether or not affiliated with the
accounting company, shall be accounted for at original cost, except
that property, plant and equipment acquired from a nonaffiliated entity
through an acquisition or merger may be accounted for at market value
at the time of the acquisition or merger.
(2) The accounting for property, plant and equipment to be recorded at
original cost shall be as follows:
(i) The amount of money paid (or current money value of any
consideration other than money exchanged) for the property (together
with preliminary expenses incurred in connection the acquisition) shall
be charged to Account 1438, Deferred maintenance, retirements, and
other deferred charges.
(ii) The original cost, estimated if not known, of telecommunications
plant, governmental franchises and other similar rights acquired shall
be charged to the applicable telecommunications plant accounts,
Telecommunications Plant Under Construction, and Property Held For
Future Telecommunications Use, as appropriate, and credited to Account
1439. When the actual original cost cannot be determined and estimates
are used, the company shall be prepared to furnish the Commission with
the particulars of such estimates.
(iii) Accumulated Depreciation and amortization balances related to
plant acquired shall be credited to Account 3100, Accumulated
depreciation, or Account 3200, Accumulated depreciation—held for future
telecommunications use, or Account 3400, Accumulated
amortization—tangible and debited to Account 1438. Accumulated
amortization balances related to plant acquired which ultimately is
recorded in Accounts 2005, Telecommunications plant adjustment, Account
2682, Leasehold improvements, or Account 2690, Intangibles shall be
credited to these asset accounts, and debited to Account 1438.
(iv) Any amount remaining in Account 1438, applicable to the plant
acquired, shall, upon completion of the entries provided in paragraphs
(b)(2)(i) through (b)(2)(iii) of this section, be debited or credited,
as applicable, to Account 2007, Goodwill, or to Account 2005,
Telecommunications plant adjustment, as appropriate.
(3) A memorandum record shall be kept showing the amount of
contributions in aid of construction applicable to the property
acquired as shown by the accounts of the previous owner.
(c) Cost of construction. (1) Telecommunications plant represents an
economic resource which will be used to provide future services, the
cost of which will be allocated in a rational and systematic manner to
the future periods in which it provides benefits. In accounting for
construction costs, the utility shall charge to the telecommunications
plant accounts, where applicable, all direct and indirect costs.
(2) Direct and indirect costs shall include, but not be limited to:
(i) “Labor” includes the wages and expenses of employees directly
engaged in or in direct charge of construction work. It includes
expenses directly related to an employee's wages, such as worker's
compensation insurance, payroll taxes, benefits and other similar items
(ii) “Engineering” includes the portion of the wages and expenses of
engineers, draftsmen, inspectors, and their direct supervision
applicable to construction work. It includes expenses directly related
to an employee's wages, such as worker's compensation insurance,
payroll taxes, benefits and other similar items of expense.
(iii) “Material and supplies” includes the purchase price of material
used at the point of free delivery plus the costs of inspection,
loading and transportation, and an equitable portion of provisioning
expense. In determining the cost of material used, proper allowance
shall be made for unused material, for material recovered from
temporary structures used in performing the work involved, and for
discounts allowed and realized in the purchase of material. This item
does not include construction material that is stolen or rendered
unusable due to vandalism. Such material should be charged to the
applicable plant specific operations expense accounts.
(iv) “Transportation” includes the cost of transporting employees,
material and supplies, tools and other work equipment to and from the
physical construction location. It includes amounts paid therefor to
other companies or individuals and the cost of using the company's own
motor vehicles or other transportation equipment.
(v) “Contract work” includes amounts paid for work performed under
contract or other agreement by other companies, firms or individuals;
engineering and supervision applicable to such work; cost incident to
the award of contracts; and the inspection of such work. The cost of
construction work performed by affiliated companies and other details
relating thereto shall be available from the work in progress and
(vi) “Protection” includes the cost of protecting the company's
property from fire or other casualties and the cost of preventing
damages to others or the property of others.
(vii) “Privileges, Permits, and Rights of way” includes such costs
incurred in obtaining these privileges, permits, or rights of way in
connection with construction work, such as for use of private property,
streets or highways. The cost of such privileges and permits shall be
included in the cost of the work for which the privileges or permits
are obtained, except for costs includable in Account 2111, Land, and
Account 2690, Intangibles.
(viii) “Taxes” includes taxes properly includable in construction costs
before the facilities are completed for service, which taxes are
assessed separately from taxes on operating property or under
conditions that permit separate identification of the amount chargeable
(ix) “Special machine service” includes the cost of labor expended,
materials and supplies consumed and other expenses incurred in the
maintenance, operation and use of special and other labor saving
machines (other than transportation equipment (such as trenching
equipment, cable plows and pole setting trucks. Also included are
expenditures for rental, maintenance and operation of such machines
owned by others. When a construction job requires the purchase of
special machines, the cost thereof, less the appraised or salvage value
at the time of release from the job, shall be included in the cost of
(x) Allowance for funds used during construction (“AFUDC”) provides for
the cost of financing the construction of telecommunications plant.
AFUDC shall be charged to Account 2003, Telecommunications plant under
construction, and credited to Account 7300, Nonoperating income and
expense. The rate for calculating AFUDC shall be determined in
accordance with GAAP when implementing this system of accounts. The
amount of interest cost capitalized in an accounting period shall not
exceed the total amount of interest cost incurred by the company in
(xi) “Insurance” includes premiums paid specifically for protection
against loss and damage in connection with the construction of
telecommunications plant due to fire or other casualty, injury to or
death of employees or others, damages to property of others,
defalcations of employees and agents and the non-performance of
contractual obligations of others.
(xii) “Construction services” include the cost of telephone,
electricity, power, construction quarters, office space and equipment
directly related to the construction project.
(xiii) “Indirect construction costs” shall include indirect costs such
as general engineering, supervision and support. Such costs, in
addition to direct supervision, shall include indirect plant operations
and engineering supervision up to, but not including, supervision by
executive officers whose pay and expenses are chargeable to Account
6720, General and administrative. The records supporting the entries
for indirect construction costs shall be kept so as to show the nature
of the expenditures, the individual jobs and accounts charged, and the
bases of the distribution. The amounts charged to each plant account
for indirect costs shall be readily determinable. The instructions
contained herein shall not be interpreted as permitting the addition to
plant of amounts to cover indirect costs based on arbitrary
(xiv) The cost of construction shall not include any amounts
classifiable as Corporate Operations Expense.
(d) Telecommunications plant retired. (1) Telecommunications plant
accounts shall at all times disclose the original cost of all property
in service. When any item of property subject to plant retirement
accounting is worn out, lost, sold, destroyed, abandoned, surrendered
upon lapse of title, becomes permanently unserviceable, is withdrawn or
for any other reason is retired from service, the plant accounts
applicable to that item shall be credited with the original cost of the
plant retired whether replaced or not (except as provided for minor
items in paragraph (d)(2)(ii) of this section). Normally, these
retirement credits with respect to such plant as entire buildings,
entire central offices, all plant abandoned and any large sections of
plant withdrawn from service, shall be entered in the accounts for the
month in which use of the property ceased. For any other plant
withdrawn from service, the retirement credits shall be entered no
later than the next succeeding month. Literal compliance with the
provision for timing of entries with respect to property amounting to
less than $50,000 retired under any one project is not required if an
unreasonable amount of recordkeeping and estimating of quantities,
original costs and salvage is necessary. The retirement entry shall
refer to the continuing property record, or records supplemental
thereto, from which the cost was obtained (note also paragraph (d)(3)
of this section). Every company shall establish procedures which will
ensure compliance with these requirements.
(2) To avoid undue refinement, depreciable telecommunications plant
shall be accounted for as follows:
(i) Retirement units: This group includes major items of property, a
representative list of which shall be prescribed by this Commission. In
lieu of the retirement units prescribed with respect to a particular
account, a company may, after obtaining specific approval by this
Commission, establish and maintain its own list of retirement units for
a portion or all of the plant in any such account. For items included
on the retirement units list, the original cost of any such items
retired shall be credited to the plant account and charged to Account
3100 Accumulated Depreciation, whether or not replaced. The original
cost of retirement units installed in place of property retired shall
be charged to the applicable telecommunications plant account.
(ii) Minor items: This group includes any part or element of plant
which is not designated as a retirement unit. The original cost of a
minor item of property when included in the specific or average cost
for a retirement unit or units requires no separate credit to the
telecommunications plant account when such a minor item is retired. The
cost of replacement shall be charged to the account applicable for the
cost of repairs of the property. However, if the replacement effects a
substantial betterment (the primary aim of which is to make the
property affected more useful, of greater durability, of greater
capacity or more economical in operation), the excess cost of such a
replacement, over the estimated cost at the then current prices of
replacement without betterment of the minor items being retired, shall
be charged to the applicable telecommunications plant account.
(3) The cost of property to be retired shall be the amount at which
property is included in the telecommunications plant accounts. However,
when it is impracticable to determine the cost of each item due to the
relatively large number or small cost of such items, the average cost
of all the items covered by an appropriate subdivision of the account
shall be used in determining the cost to be assigned to such items when
retired. The method used in determining average cost must give due
regard to the quantity, vintage, size and kind of items, the area in
which they were installed and their classification in other respects.
Average cost may be applied in retirement of such items as poles, wire,
cable, cable terminals, conduit and booths. Any company may use average
cost of property installed in a year or band of years as approved by
the Commission. It should be understood, however, that the use of
average costs shall not relieve the company of the requirement for
maintaining its continuing property records to show, where practicable,
dates of installation and removal for purposes of mortality studies.
(See § 32.2000(f) of this subpart, Standard Practices for Establishing
and Maintaining Continuing Property Records.)
(4) The accounting for the retirement of property, plant and equipment
shall be as provided above except that amounts in Account 2111, Land,
and amounts for works of art recorded in Account 2122, Furniture, shall
be treated at disposition as a gain or loss and shall be credited or
debited to Account 7100, Other operating income and expense, as
applicable. If land or artwork is retained by the company and held for
sale, the cost shall be charged to Account 2006, Nonoperating plant.
(5) When the telecommunications plant is sold together with traffic
associated therewith, the original cost of the property shall be
credited to the applicable plant accounts and the estimated amounts
carried with respect thereto in the accumulated depreciation and
amortization accounts shall be charged to such accumulated accounts.
The difference, if any, between the net amount of such debit and credit
items and the consideration received (less commissions and other
expenses of making the sale) for the property shall be included in
Account 7300, Nonoperating income and expense. The accounting for
depreciable telecommunications plant sold without the traffic
associated therewith shall be in accordance with the accounting
provided in § 32.3100(c).
(e) Basic property records. (1) The basic property records are that
portion of the total property accounting system which preserves the
following detailed information:
(i) The identity, vintage, location and original cost of units of
(ii) Original and ongoing transactional data (plant account activity)
in terms of such units; and
(iii) Any other specific financial and cost accounting information not
properly warranting separate disclosure as an account or subaccount but
which is needed to support regulatory, cost, tax, management and other
specific accounting information needs and requirements.
(2) The basic property records must be: (i) Subject to internal
accounting controls, (ii) auditable, (iii) equal in the aggregate to
the total investment reflected in the financial property control
accounts as well as the total of the cost allocations supporting the
determination of cost-of-service at any particular point in time, and
(iv) maintained throughout the life of the property.
(3) The basic property records shall consist of (i) continuing property
records and (ii) records supplemental thereto which together reveal
clearly, by accounting area, the detailed and systematically summarized
information necessary to meet fully the requirements of paragraphs
(e)(1) and (e)(2) of this section.
(4) Companies shall establish and maintain basic property records for
each class of property recorded in the several plant accounts which
comprise the balance sheet Account 2001, Telecommunications Plant In
Service, Account 2002, Property Held for Future Telecommunications Use,
and Account 2006, Nonoperating Plant.
(5) The company shall notify the Commission of a plan for the basic
property record as follows:
(i) Not later than June 30 of the year following that in which it
becomes subject to this system of accounts, the company shall file with
the Commission two (2) copies of a complete plan of the method to be
used in the compilation of a basic property record with respect to each
class of property. The plan shall include a list of proposed accounting
areas accompanied by description of the boundaries of each area as
defined in accordance with the requirements of § 32.2000(f)(1) (i) and
(ii) of this subpart. The plan shall also include a list of property
record units proposed for use under each regulated plant account. These
property record units shall be selected such that the requirements of
§ 32.2000(f)(2) (i), (ii) and (iii) of this subpart can be satisfied.
(ii) The company shall submit to the Commission one copy of any major
proposed changes in its basic property record plan at least 30 days
before the effective date of the proposed changes.
(6) The company shall prepare and maintain the basic property record as
(i) Not later than June 30 of the year following that in which the
company becomes subject to this system of accounts, begin the
preparation of a basic property record.
(ii) Complete within two years of the prescribed beginning date, basic
property records for all property as of the end of the preceding
(iii) Promptly process in the basic property records all property
changes affecting periods subsequent to initial establishment of the
basic property record.
(7) The basic property record components (see paragraph (c) of this
section) shall be arranged in conformity with the regulated plant
accounts prescribed in this section of accounts as follows:
(i) The continuing property records shall be compiled on the basis of
original cost (or other book cost consistent with this system of
accounts). The continuing property records shall be maintained as
prescribed in § 32.2000(f)(2)(iii) of this subpart in such manner as
will meet the following basic objectives:
(A) Provide for the verification of property record units by physical
(B) Provide for accurate accounting for retirements.
(C) Provide data for use in connection with depreciation studies.
(ii) The records supplemental to the continuing property records shall
disclose such service designations, usage measurement criteria,
apportionment factors, or other data as may be prescribed by the
Commission in this part or other parts of its Rules and Regulations.
Such data are subject to the same general controls and standards for
auditability and support as are all other elements of the basic
(8) Notwithstanding any other provision of this part concerning
continuing property records, carriers subject to price cap regulations
set forth in part 61 of this chapter shall maintain property records
necessary to track substantial assets and investments in an accurate,
auditable manner that enables them to verify their accounting books,
make such property information available to the Commission upon
request, and ensure the maintenance of such data.
(f) Standard practices for establishing and maintaining continuing
property records—(1) Accounting area. (i) The continuing property
record, as related to each primary plant account, shall be established
and maintained by subaccounts for each accounting area. An accounting
area is the smallest territory of the company for which accounting
records of investment are maintained for all plant accounts within the
area. Areas already established for administrative, accounting,
valuation, or other purposes may be adopted for this purpose when
appropriate. In no case shall the boundaries of accounting areas cross
either State lines or boundaries prescribed by the Commission.
(ii) In determining the limit of each area, consideration shall be
given to the quantities of property, construction conditions, operating
districts, county and township lines, taxing district boundaries, city
limits, and other political or geographical limits, in order that the
area adopted may have maximum adaptability, within the confines of
practicability, for both the company's purpose and those of Federal,
State, and municipal authorities.
(2) Property record units. (i) In each of the established accounting
areas, the “property record units” which are to be maintained in the
continuing property record shall be set forth separately, classified by
size and type with the amount of original cost (or other appropriate
book cost) associated with such units. When a list of property record
units has been accepted by the Commission, they shall become the units
referred to in this statement of standard practices. Such units shall
apply to only the regulated portion of this system of accounts.
(ii) When it is found necessary to revise this list because of the
addition of units used in providing new types of service, or new units
resulting from improvements in technology, or because of the grouping
or elimination of units which no longer merit separate recognition as
property record units, one copy of such changes shall be submitted to
the Commission. Upon appropriate showing by the company, the Commission
may specifically exempt the company from these filing requirements.
(iii) The continuing property record shall reveal the description,
location, date of placement, the essential details of construction, and
the original cost (note also paragraph (f)(3) of this section) of the
property record units. The continuing property records shall be
compiled on the basis of original cost (or other book cost consistent
with this system of accounts) and maintained in such manner as will
provide for the verification of property record units by physical
examination. The continuing property record and other underlying
records of construction costs shall be so maintained that, upon
retirement of one or more retirement units or of minor items without
replacement when not included in the costs of retirement units, the
actual cost or a reasonably accurate estimate of the cost of the plant
retired can be determined.
(3) Methods of determining original cost of property record units. The
original cost of the property record units shall be determined by
analyses of the construction costs incurred as shown by completion
reports and other data, accumulated in the respective construction work
orders or authorizations. Costs shall be allocated to and associated
with the property record units to facilitate accounting for
retirements. The original cost of property record units shall be
determined by unit identification or averaging as described in
paragraphs (f)(3) (i) and (ii) of this section.
(i) Unit identification. Cost shall be identified and maintained by
specific location for property record units contained within certain
regulated plant accounts or account groupings such as Land, Buildings,
Central Office Assets, Motor Vehicles, garage work equipment included
in Account 2114, Tools and other work equipment, and Furniture. In
addition, units involved in any unusual or special type of construction
shall be recorded by their specific location costs (note also
(ii) Averaging. (A) Average costs may be developed for plant consisting
of a large number of similar units such as terminal equipment, poles,
wire, cable, cable terminals, conduit, furniture, and work equipment.
Units of similar size and type within each specified accounting area
and regulated plant account may be grouped. Each such average cost
shall be set forth in the continuing property record of the units with
which it is associated.
(B) The averaging of costs permitted under the provisions of the
foregoing paragraph is restricted to plant installed in a particular
vintage or band of years incurred within an accounting area. This
paragraph does not permit the inclusion of the cost of units involved
in any unusual or special type of construction. The units involved in
such unusual or special type of construction shall be recorded at cost
(4) Estimates. In cases where the actual original cost of property
cannot be ascertained, such as pricing an inventory for the initial
entry of a continuing property record or the pricing of an acquisition
for which a continuing property record has not been maintained, the
original cost may be estimated. Any estimated original cost shall be
consistent with the accounting practices in effect at the time the
property was constructed.
(5) Identification of property record units. There shall be shown in
the continuing property record or in record supplements thereof, a
complete description of the property records units in such detail as to
identify such units. The description shall include the identification
of the work order under which constructed, the year of installation
(unless not determinable per § 32.2000(f)(4) of this subpart, specific
location of the property within each accounting area in such manner
that it can be readily spot-checked for proof of physical existence,
the accounting company's number or designation, and any other
description used in connection with the determination of the original
cost. Descriptions of units of similar size and type shall follow
(6) Reinstalled units. When units to which average costs are not
applied, i.e., specific and fixed location units, are removed or
retired and subsequently reinstalled, the date when the unit was first
charged to the appropriate plant account shall, when required for
adequate service life studies and reasonably accurate retirement
accounting, be shown in addition to the date of reinstallation.
(7) Age and service life of property. The continuing property record
shall disclose the age of existing property and the supporting records
shall disclose the service life of property retired. Exceptions from
this requirement for any property record unit shall be submitted to the
Commission for approval.
(8) Reference to sources of information. There shall be shown by
appropriate reference the source of all entries. All drawings,
computations, and other detailed records which support quantities and
costs or estimated costs shall be retained as a part of or in support
of the continuing property record.
(9) Jointly owned property. (i) With respect to jointly owned property,
there shall be shown in the continuing property record or records
(A) The identity of all joint owners.
(B) The percentage owned by the accounting company.
(ii) When regulated plant is constructed under arrangements for joint
ownership, the amount received by the constructing company from the
other joint owner or owners shall be credited as a reduction of the
gross cost of the plant in place.
(iii) When a sale of a part interest in regulated plant is made, the
fractional interest sold shall be treated as a retirement and the
amount received shall be treated as salvage. The continuing property
record or records supplemental thereto shall be so maintained as to
identify separately retirements of this nature from physical
retirements of jointly owned plant.
(iv) If jointly owned regulated property is substantial in relation to
the total of the same kind of regulated property owned wholly by the
company, such jointly owned regulated property shall be appropriately
segregated in the continuing property record.
(g) Depreciation accounting—(1) Computation of depreciation rates. (i)
Unless otherwise provided by the Commission, either through prior
approval or upon prescription by the Commission, depreciation
percentage rates shall be computed in conformity with a group plan of
accounting for depreciation and shall be such that the loss in service
value of the property, except for losses excluded under the definition
of depreciation, may be distributed under the straight-line method
during the service life of the property.
(ii) In the event any composite percentage rate becomes no longer
applicable, revised composite percentage rates shall be computed in
accordance with paragraph (g)(1)(i) of this section.
(iii) The company shall keep such records of property and property
retirements as will allow the determination of the service life of
property which has been retired, or facilitate the determination of
service life indications by mortality, turnover, or other appropriate
methods. Such records will also allow the determination of the
percentage of salvage value and cost of removal for property retired
from each class of depreciable plant.
(2) Depreciation charges. (i) A separate annual percentage rate for
each depreciation category of telecommunications plant shall be used in
computing depreciation charges.
(ii) Companies, upon receiving prior approval from this Commission, or,
upon prescription by this Commission, shall apply such depreciation
rate, except where provisions of paragraph (g)(2)(iv) of this section
apply, as will ratably distribute on a straight line basis the
difference between the net book cost of a class or subclass of plant
and its estimated net salvage during the known or estimated remaining
service life of the plant.
(iii) Charges for currently accruing depreciation shall be made monthly
to the appropriate depreciation accounts, and corresponding credits
shall be made to the appropriate depreciation reserve accounts. Current
monthly charges shall normally be computed by the application of
one-twelfth of the annual depreciation rate to the monthly average
balance of the associated category of plant. The average monthly
balance shall be computed using the balance as of the first and last
days of the current month.
(iv) In certain circumstances and upon prior approval of this
Commission, monthly charges may be determined in total or in part
through the use of other methods whereby selected plant balances or
portions thereof are ratably distributed over periods prescribed by
this Commission. Such circumstances could include but not be limited to
factors such as the existence of reserve deficiencies or surpluses,
types of plant that will be completely retired in the near future, and
changes in the accounting for plant. Where alternative methods have
been used in accordance with this subparagraph, such amounts shall be
applied separately or in combination with rates determined in
accordance with paragraph (g)(2)(ii) of this section.
(3) Acquired depreciable plant. When acquired depreciable plant carried
in Account 1438, Deferred maintenance, retirements and other deferred
charges, is distributed to the appropriate plant accounts, adjusting
entries shall be made covering the depreciation charges applicable to
such plant for the period during which it was carried in Account 1438.
(4) Plant Retired for Nonrecurring Factors not Recognized in
(i) A retirement will be considered as nonrecurring (extraordinary)
only if the following criteria are met:
(A) The impending retirement was not adequately considered in setting
past depreciation rates.
(B) The charging of the retirement against the reserve will unduly
deplete that reserve.
(C) The retirement is unusual such that similar retirements are not
likely to recur in the future.
(5) Upon direction or approval from this Commission, the company shall
credit Account 3100, Accumulated Depreciation, and charge Account 1438,
Deferred Maintenance, retirements and other deferred charges, with the
unprovided-for loss in service value. Such amounts shall be distributed
from Account 1438 to Account 6561, Depreciation
expense—Telecommunications plant in service, or Account 6562,
Depreciation expense—property held for future telecommunications use,
over such period as this Commission may direct or approve.
(h) Amortization accounting. (1) Unless otherwise provided by this
Commission, either through approval, or upon prescription by this
Commission, amortization shall be computed on the straight-line method,
i.e., equal annual amounts shall be applied. The cost of each type
asset shall be amortized on the basis the estimated life of that asset
and shall not be written off in the accounting period in which the
asset is acquired. A reasonable estimate of the useful life may be
based on the upper or lower limits even though a fixed existence is not
determinable. However, the period of amortization shall not exceed
(2) In the event any estimated useful life becomes no longer
applicable, a revised estimated useful life shall be determined in
accordance with paragraph (h)(1) of this section.
(3) Amortization charges shall be made monthly to the appropriate
amortization expense accounts and corresponding credits shall be made
to accounts 2005, 2682, 2690, and 3410, as appropriate. Monthly charges
shall be computed by the application of one-twelfth to the annual
(4) The company shall keep such records as will allow the determination
of the useful life of the asset.
(j) Plant accounts to be maintained by telephone companies as
Property, plant and equipment:
Telecommunications plant in service ^12001
Property held for future telecommunications use 2002
Telecommunications plant under construction-short term 2003
Telecommunications plant adjustment 2005
Nonoperating plant 2006
Telecommunications plant in service (TPIS)
TPIS—General support assets:
Land and support assets 2110
TPIS—Central Office assets:
Central Office—switching 2210
Operator systems 2220
Central Office—transmission 2230
TPIS—Information origination/termination assets:
Information origination termination 2310
TPIS—Cable and wire facilities assets:
Cable and wire facilities 2410
Amortizable tangible assets 2680
^1Balance sheet summary account only.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 52 FR 7580 , Mar. 12, 1987; 53 FR 30059 , Aug. 10, 1988; 59 FR 46930 , Sept. 13, 1994; 60 FR 12138 , Mar.
6, 1995; 62 FR 39451 , July 23, 1997; 64 FR 50007 , Sept. 15, 1999; 67 FR 5683 , Feb. 6, 2002; 69 FR 53648 , Sept. 2, 2004; 82 FR 20840 , May 4,
Goto Section: 32.1500 | 32.2001
Goto Year: 2020 |
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