(b) The said classification, with the text pertaining thereto be, and is hereby, prescribed for the use of carriers by rail (exclusive of electric railways) subject to the provisions of the Act to Regulate Commerce as amended, in the keeping and recording of their said accounts; each and every such carrier and each and every receiver or operating trustee of any such carrier be required to keep all said accounts in conformity therewith; and a copy of the said issue be sent to each and every such carrier and to each and every receiver or operating trustee of any such carrier. (c) In order to avoid destroying the basis of comparison with previous years, any such carrier or any receiver or operating trustee of any such carrier may, during the 12 months from the time that the said issue becomes effective, keep and maintain, in addition to the said accounts hereby prescribed, such portion or portions of its present income, profit and loss, and general balance-sheet accounts as may be deemed desirable by any such carrier or by any receiver or operating trustee thereof, for the purpose of such comparison; or, during the same period, may maintain such groupings of the primary accounts hereby prescribed as may be desired for that purpose. (a) Unless otherwise ordered, any such carrier or any receiver or operating trustee of any such carrier may keep any temporary or experimental income, profit and loss, and general balance-sheet accounts the purpose of which shall be to develop the efficiency of operations: Provided, however, That such temporary or experimental accounts shall not impair the integrity of any general or primary account hereby prescribed. (e) July 1, 1914, is hereby fixed as the date on which the said issue of the Classification of Income, Profit and Loss, and General Balance Sheet Accounts for Steam Roads shall become effective.* [Order adopting Classification of income, profit and loss, and general balance sheet accounts for steam roads, ICC, May 19, 1914] 10.00-6 Introductory letter to account officers of steam railways. (a) This Classification of Income, Profit and Loss, and General Balance Sheet Accounts supersedes the Form of Income and Profit and Loss Statement for Steam Roads, First Issue, effective July 1, 1912, and the Form of General Balance Sheet Statement, First Revised Issue, effective June 15, 1910. It also supersedes conflicting instructions in Accounting Bulletin No. 8.13 (b) In Income all of the revenues from operating physical property the cost of which is includible in the accounts for investment in road and equipment have been combined in one account, and correspondingly the expenses of operation have been combined. Separate accounts have been provided for the revenues from and the expenses of operating miscellaneous physical property. A distinct account has been provided in which to include such revenue from operations as has been determined to be uncollectible during the period for which the accounts are stated. Distinct accounts have been provided for rent from and rent for the several classes of equipment. 13 See Accounting Bulletin No. 15. Page 198 *For statutory citation, see note to § 10.00-1. (c) In Profit and Loss an account has been provided in which to show the amount of revenue overcharges which are determined to be unrefundable during the period for which the accounts are stated. An account is also provided for donations from individuals and companies for the construction or acquisition of property or for compensating the carrier for loss anticipated during the early period of operation. (d) Balance-sheet asset accounts have been provided for "Improvements on leased railway property," and "Deposits in lieu of mortgaged property sold." Additional accounts have been provided in which to include demand deposits and time drafts and deposits, items which heretofore have been included as cash. The account "Taxes paid in advance" has been eliminated and provision made for showing in red the net amount of taxes paid over the amount of taxes accrued in an account under the caption of "Tax liability." A liability account has been provided for "Grants in aid of construction," and separate accounts have been provided for accrued depreciation upon road, upon equipment, and upon miscellaneous physical property. (e) In the preparation of the text of the accounts and in the grouping of the accounts in the form of general balance sheet it has been primarily the purpose to provide for showing, in the group of accounts under the caption "Current assets," only items of available assets or of assets which there is a reasonable assurance will become available within a year from the date of the balance sheet. (f) The general and special instructions contain a comprehensive statement of the principles underlying the classification, indicating generally the application of the accounting rules. The attention of accounting officers is called to the importance of requiring all employees who are assigned to accounting work in connection with income, profit and loss, and general balance-sheet accounts to familiarize themselves thoroughly with these instructions. (g) In the preparation of the revision of the accounting rules contained in this and other classifications for steam roads, which are concurrently issued, the Commission has had the cooperation of the Association of American Railway Accounting Officers, and its Standing Committee on Corporate, Fiscal, and General Accounts. (h) The classification, in tentative form, has been presented for criticism and suggestions to the chief accounting officer of each railway and to the railway commissions of the several States. All suggestions received from such parties have been given careful consideration, and many of them have been incorporated in the classification as here issued.* [Introductory letter to Classification of income, profit and loss, and general balance sheet accounts for steam roads, ICC, May 19, 1914] GENERAL INSTRUCTIONS 10.03-0 Records. The carrier's records shall be kept with sufficient particularity to show fully the facts pertaining to all entries made in the accounts provided herein for Income, Profit and Loss, and General Balance Sheet. Where the full information is not *For statutory citation, see note to § 10.00-1. Page 199 recorded in the general books, the entries therein shall be supported by other records in which the full details shall be shown. Such general book entries shall contain sufficient reference to the detail records to permit ready identification, and the detail records shall be filed in such manner as to be readily accessible for examination by representatives of the Interstate Commerce Commission.* [Introduction to General Instructions, Classification of income, profit and loss, and general balance sheet accounts for steam roads, ICC, May 19, 1914] 10.03-1 Titles of sub-accounts. When the title and definition of an income, profit and loss, or general balance-sheet account clearly indicate that it is a summary of other accounts, it is not required that a special ledger account shall be kept under such a title to include the balances from the accounts usually kept in the ledger, but in such case the titles of the subaccounts in the ledger shall give references by number, titles, or both, to the income, profit and loss, or general balance-sheet account prescribed herein of which they are subdivisions.*+ In §§ 10.03-1 to 10.03-3, inclusive, the numbers to the right of the dash correspond with the respective general instruction numbers in Classification of income, profit and loss, and general balance sheet accounts for steam roads, Interstate Commerce Commission, May 19, 1914. Amendments are noted in brackets following sections affected. Cross references to accounts are made by citing the account number, e. g., account 542, instead of the corresponding section number (§ 10.542). 10.03-2 Depreciation-Equipment. The carrier shall include in operating expenses charges for depreciation on equipment used but not owned the rent for which is includible in account 542, "Rent for leased roads and equipment," and shall maintain the same records of service lives, salvage values, etc., as provided for owned equipment. The amount currently to be charged to account 542, "Rent for leased roads and equipment," is the excess of the total compensation over the amount chargeable by the carrier to the equipment depreciation account in operating expenses. If settlement between the carrier and the lessor is not currently made, the amount of the depreciation accrued during the period of the lease shall be credited by the carrier to a subaccount under account 778, "Other unadjusted credits." The necessary adjustments of the difference between the balance thus accrued in that subaccount and the actual amount of settlement shall appropriately be made through account 607, "Miscellaneous credits," or account 621, "Miscellaneous debits," at the time settlement for depreciation on the equipment is made with the lessor. The carrier shall not include in the depreciation account in operating expenses any charges for depreciation of equipment used but not owned when the rents therefor are includible in the rent-for-equipment accounts Nos. 503 to 507 and 536 to 540, inclusive.** [As amended Dec. 27, 1935] 10.03-3 Accounts to be balanced monthly. Accounts shall be written up, posted to the general ledger and balanced monthly. The final entries for any month shall be made not later than 60 days after the last day of the month for which the accounts are stated, except that the period within which the final entries for the month Page 200 *For statutory citation, see note to § 10.00-1. of December shall be made may be extended to such date in the following March as shall not interfere with the preparation and filing of annual reports as required by paragraph 2 of section 20 of the Interstate Commerce Act.* [As amended Mar. 14, 1921] SPECIAL INSTRUCTIONS-INCOME ACCOUNTS Income accounts are those de 10.5-1 Income accounts defined. signed to show, as nearly as practicable, for each fiscal period, the total amount of money that a carrier becomes entitled to receive for services rendered, the returns accrued upon investments, the accrued costs paid or payable for the services rendered by it, the losses sustained by it, the amounts accrued for taxes, for use of moneys and for use of properties of others, and the appropriations made from income during the period. The net balance of income (or loss) shall be carried to Profit and Loss.*†† ††In §§ 10.5-1 to 10.5-4, inclusive, the numbers to the right of the dash correspond with the respective special instruction numbers in Classification of income, profit and loss, and general balance sheet accounts for steam roads (income accounts), Interstate Commerce Commission, May 19, 1914. The umendment of June 13, 1934, is noted in brackets following section affected. 10.5-2 Delayed items. When no provisions have been made through entries in the accounts of this classification for anticipating delayed items chargeable or creditable to Income, and the amount of any such item is relatively so large that its inclusion in the accounts for a single year would seriously distort those accounts, the carrier, if so authorized upon application to the Interstate Commerce Commission, shall distribute to Profit and Loss so much of the amount as may be authorized. The carrier, in its application to the Commission, shall file the full particulars concerning each item and the reasons which in its judgment indicate the propriety of such accounting. Delayed items are items representing transactions which occurred before the current year.*** 10.5-4 Unaudited items. The carrier shall accrue anticipated unaudited items of income in a manner similar to the plan prescribed in § 10.02-2 of the general instructions in the Classification of Operating Revenues and Operating Expenses.*tt [As amended June 13, 1934] INCOME ACCOUNTS 10.500 Form of income statement. EXPLANATORY NOTE: The classified form of income statement is designed to show the financial changes resulting from transportation operations and other business of the accounting company during any specified period. *For statutory citation, see note to § 10.00-1. For source citation, see note to § 10.03-1. Page 201 (B) Rent income: 503. Hire of freight cars-Credit balance.... 504. Rent from locomotives__ 505. Rent from passenger-train cars- 506. Rent from floating equipment. 507. Rent from work equipment-. 508. Joint facility rent income. Total rent income___ (C) Rents payable: 1 536. Hire of freight cars-Debit balance....... 538. Rent for passenger-train cars. 540. Rent for work equipment_ 541. Joint facility rents--. Total rents payable 1Net rents_-_ 1Net railway operating income_. II. OTHER INCOME 502. Revenues from miscellaneous operations-- 511. Miscellaneous nonoperating physical property- 513. Dividend income_ 514. Income from funded securities_ 515. Income from unfunded securities and accounts_ 518. Contributions from other companies. 519. Miscellaneous income_-_ Total other income-- 1 Total income__. III. MISCELLANEOUS DEDUCTIONS FROM INCOME 534. Expenses of miscellaneous operations-- 535. Taxes on miscellaneous operating property- 544. Miscellaneous tax accruals. 545. Separately operated properties-Loss_ Total miscellaneous deductions__. 1 Income available for fixed charges_. IV. FIXED CHARGES 542. Rent for leased roads and equipment---. (a) Fixed interest. 547. Interest on unfunded debt__ 548. Amortization of discount on funded debt___ Total fixed charges-- 1 Income after fixed charges___. V. CONTINGENT CHARGES 546. Interest on funded debt (b) Contingent interest.. 1 Net income__. 1If a loss the amount shall be shown in red. |