200 Accounting Terms From A To Z

If, however, costs are incurred during the removal of minor items of plant, these costs shall reduce the credit to the Accumulated Provision for Depreciation. Costs incurred by contractor personnel on official company business are allowable, subject to the limitations contained in this subsection. Costs for transportation may be based on mileage rates, actual costs incurred, or on a combination thereof, provided the method used results in a reasonable charge. Costs for lodging, meals, and incidental expenses may be based on per diem, actual expenses, or a combination thereof, provided the method used adjusting entries results in a reasonable charge. For contracts other than those subject to paragraph of this section, the base period for allocating indirect costs shall be the contractor’s fiscal year used for financial reporting purposes in accordance with generally accepted accounting principles. The fiscal year will normally be 12 months, but a different period may be appropriate (e.g., when a change in fiscal year occurs due to a business combination or other circumstances). Funded pension cost means the portion of pension cost for a current or prior cost accounting period that has been paid to a funding agency.

Details pertaining to the tax consequences of other unusual and significant items, and also cases where tax consequences are disproportionate to related amounts included in income accounts, shall be submitted to the Commission for consideration and decision as to proper accounting. This account shall also include expenses incurred on account of injury to or death of employees or other persons including related medical, hospital and funeral expenses. This account shall include the amount of expense sustained by the carrier on account of loss or damage to oil or other commodity entrusted to it for transportation or storage resulting from fire, flood, or other casualty. This account shall include the salaries and wages of executives and general officers, general office personnel, and of other employees whose wages cannot be directly allocated to operations or maintenance. The value of oil gains from operations shall be credited to this account at current value at time of determination of gain and charged to oil inventory or operating supply.

These adjustments are recorded in Account 114, Electric Plant Acquisition Adjustments, and amortized to Account 406, Amortization of Electric Plant Acquisition Adjustments, or Account 425, Miscellaneous Amortization, as required by the regulatory commission having jurisdiction. Proceeds from the sale of property shall not be used to maintain an “Employee Fund.” A utility may, pursuant to board policy, use general funds for employee welfare equivalent in amount to proceeds received from the sale of scrap property. If general funds, in an amount equivalent to proceeds received from the sale of scrap property, are used for employee welfare, Account 926, Employee Pensions and Benefits, shall be charged. Labor and material costs (ledger sheets, etc.) incurred in connection with the installation of the record system. Load Control Receivers may be moved on a continual basis from one customer location to another and are, therefore, considered to be special equipment items. When ownership is maintained by the member distribution cooperative, Load Control Receivers shall be accounted for in accordance with the special equipment procedures outlined in Accounting Interpretation No. 119 of this section. Operating and maintenance expenses applicable to Load Control Receivers recorded in Account 371 shall be charged to Account 587, Customer Installations Expenses, and Account 598, Maintenance of Miscellaneous Distribution Plant, respectively.

The measure of normal cost under this method for each cost accounting period is the present value of the units of benefit deemed to be credited to employees for service in that period. The measure of the actuarial accrued liability at a plan’s inception date is the present value of the units of benefit credited to employees for service prior to that date. (This method is also known as the unit credit cost method without salary projection.).

The Asset Cost Is Divided Up Among The Individual Assets Acquired In The Group Based On Their Relative Market Values

The basis for apportionment and the underlying records in support thereof shall be readily available for inspection by the Commission’s examiners. This group of accounts includes general and administrative expense and all other expenses not directly allocable to operations and maintenance expenses. Amounts included in former account 193, Acquisition Adjustment, attributable to mergers, consolidations, reorganizations, and purchases of property shall be cleared from that account as the Commission may authorize or direct upon submission of proposal for distribution of the amounts therein. When the par value or stated value of no-par capital stock of the succeeding corporation is less than that of the constituent corporations, the difference shall be credited to account 73, Additional Paid-in Capital. When retired property is held without being dismantled, the estimated value of the salvage less the estimated cost of salvaging shall be included in account 19, Other Current Assets, if to be recovered within a year, otherwise, in account 43, Miscellaneous Other Assets.

• It should be noted that the establishment of continuing property records is not required for buildings; however, if CPRs are not maintained, all repairs including the replacement of major component parts shall be expensed in the period incurred.
• A grant of permission or authority in a governing instrument to request payment of tax from property passing under another governing instrument is not a direction apportioning the tax to the property passing under the other governing instrument.
• Appropriate downward adjustments from the maximum per diem rates would normally be required under these circumstances.
• Any insurance proceeds received or recoverable must be deducted from the amount of the casualty loss to determine the gain or the loss.
• Compensation includes wages and salaries ; payroll taxes and insurance; and benefits.

This account shall include the cost of tangible property used in carrier service, or held for such use within a reasonable time under a definite plan for pipeline operations. This account shall include the cost of oil purchased and the value of oil acquired through tariff allowances and operating gains. Amounts paid preceding carriers for transportation, customs duties, or similar charges shall be charged to account 230, Allowance Oil Revenue. Additions to inventory from tariff allowances shall be credited to revenue at current value. Additions resulting from operating gains shall be credited against operating oil losses and shortages. This account shall include amounts receivable due and accrued from other than affiliates which are subject to settlement within one year from date of the balance sheet. This includes items such as revenue for services rendered, material furnished, rent, accounts of officers and employees, miscellaneous accounts with others.

Except as noted below, prior service cost shall be amortized by assigning an equal amount to each future period of service of each employee active at the date of the amendments who is expected to receive benefits under the plan. If all or almost all of the plan’s participants are inactive, the cost of retroactive plan amendments affecting benefits of inactive Accounting Periods and Methods participants shall be amortized based upon the remaining life expectancy of those participants rather than the remaining service period. The costs of employees’ fringe benefits (hospitalization, retirement, holiday, sick and vacation pay, etc.) shall be accumulated in an appropriate clearing account and allocated monthly on the basis of payroll.

The net tax attributable to residuary devises shall be apportioned among the recipients of the residuary devises included in the measure of the tax in the proportion that the value of each residuary devise included in the measure of the tax bears to the total of all residuary devises included in the measure of the tax. “Tentative Florida tax” with respect to any property means the net Florida estate tax that would have been attributable to that property if no tax were payable to the primary difference between ordinary and extraordinary repairs is that extraordinary repairs any other state in respect of that property. “Residuary interest,” in connection with a trust, means an interest in the assets of a trust which remain after provision for any distribution that is to be satisfied by reference to a specific property or type of property, fund, sum, or statutory amount. Interests or amounts that are not included in the gross estate but are included in the amount upon which the applicable tax is computed, such as adjusted taxable gifts pursuant to s.

Expenses relating to lobbying are unallowable including salaries, benefits, and payroll taxes for staff performing these activities. If a staff member performs these activities along with allowable activities, a portion of that staff member’s salary must be allocated to the unallowable activities and as such not be reported on the cost report. Franchise fees based upon percentages of revenues and/or sales are unallowable costs. Franchise fees based upon goodwill are unallowable, with goodwill being that intangible, salable asset arising from the reputation of a business and its relationship with its customers. In general, premiums related to insurance on the lives of owners, officers, and key employees where the contracted provider is a direct or indirect beneficiary are unallowable costs. All allowable insurance premium costs should be reported on cost reports, with amounts accrued for premiums, modifiers, and surcharges during the cost-reporting period being adjusted by any refunds and discounts actually received or settlements paid during the same cost-reporting period.

Betterment Vs Normal Expense

All expenses related to noncarrier property, such as operation and maintenance expenses, depreciation, taxes and similar expenses, are includible herein. This account shall include all noncarrier revenues and expenses from property carried in account 34, Noncarrier Property. The cost of oil lost or undelivered through operating causes shall be charged to account 340, Oil Losses and Shortages. The carrier shall not accrue amounts for the purpose of estimating risk of loss or damage to its property from fire, theft, or similar loss contingencies not covered by commercial insurance. This account shall include gains from purchase and resale of reacquired stock. Credits attributable to reductions in the par or stated value of capital stock may be included in this account only when approved by the Commission.

Adequacy of the contractual agreement for the service (e.g., description of the service, estimate of time required, rate of compensation, termination provisions). When materials are purchased specifically for and are identifiable solely with performance under a contract, the actual purchase cost of those materials should be charged to the contract. If material is issued from stores, any generally recognized method of pricing such material is acceptable if that method is consistently applied and the results are equitable. An excess of costs over income under any other contract (including the contractor’s contributed portion under cost-sharing contracts) is unallowable. When a contractor seeks reimbursement for indirect costs, total lobbying costs shall be separately identified in the indirect cost rate proposal, and thereafter treated as other unallowable activity costs. If purchased insurance is available, any self-insurance charge plus insurance administration expenses in excess of the cost of comparable purchased insurance plus associated insurance administration expenses is unallowable.

Allocate items of income or expense to either estate income or principal, as permitted or provided by law. Pay taxes, assessments, and other expenses incident to the administration of the estate. Borrow money, with or without security, to be repaid from the estate assets or otherwise, other than real property, and advance money for the protection of the estate. Convey the real property for cash payment of all sums remaining due or for the purchaser’s note for the sum remaining due, secured by a mortgage on the property.

B  Cost Of Goods Sold

On inspection, the pole from which the service is to be run is found to be in very poor physical condition and must be replaced. In addition, a single span of wire and a service are presently connected to this pole which serve no purpose. The home originally served has been demolished and the existing span, pole, and service were retired. In other words, what started out to be simply the installation of a new service now includes the retirement of a span of wire, a pole, and a service; the replacement of a pole; and the running of a new service. Assuming the replacement of the pole is the costliest part of this project, the construction and retirement activity shall be classified as an ordinary replacement even though the work includes new construction and retirements without replacement. Is paid to the employee contingent upon, and following, a change in management control over, or ownership of, the contractor or a substantial portion of the contractor’s assets.

At this time, there is no indication that the system supports other functions such as home security. Therefore, the accounting prescribed for the Turtle meter reading devices and support equipment relates only to electric utility operations. The impairment of the asset is measured by estimating the future cash flows expected to result from the use of the asset and its disposition.

This includes receivables for items such as revenue for services rendered, material furnished, rent, interest and dividends, advances and notes. Cost of injuries and damages includes expenditures for injuries to persons or damage to property when incident to construction projects, and shall be included in the cost of the related construction work.

110 Indirect Cost Rate Certification And Penalties On Unallowable Costs

There are many moving parts to usufruct and naked ownership taxation, ownership, and indebtedness that affect the rights and obligations of usufructuaries and naked owners. And since sharing an inheritance is not always the most amicable of life circumstances, it would behoove you to have an understanding of these difficult-to-understand concepts. Another important rule all usufructuaries and naked owners to know is that when investments subject to usufruct are sold, the usufruct attaches to the proceeds of the sale , and Wife becomes the owner of the money with an obligation to pay the naked owner this amount when the usufruct terminates.

Related Accounting Q&a

Capitalization is an accounting method in which a cost is included in the value of an asset and expensed over the useful life of that asset. On the other hand, assume that ABC Boating Company has decided to overhaul one of its lines of boats. Twenty of the boats’ older engines are swapped out for new, more powerful engines. The new engines are predicted to extend the useful life of the boat for an additional five years.

Benefits covered by annuity contracts shall be excluded from the projected benefit obligation and the accumulated benefit obligation. The required disclosures may be aggregated for all of an employer’s single-employer defined benefit plans, or plans may be disaggregated into groups so as to provide the most useful information. Plans with assets in excess of the accumulated benefit obligation, however, shall not be aggregated with plans that have accumulated benefit obligations that exceed plan assets. When a new determination of the amount of additional liability is made to prepare a balance sheet, the related intangible asset and separate component of equity shall be eliminated or adjusted, as necessary.

An Allowance For Doubtful Accounts Is A Contra

An in-substance defeasance has been defined as the process whereby a debtor irrevocably places cash or other assets in a trust to be used solely for the purpose of satisfying scheduled payments of both principal and interest related to a specific debt obligation. Under the structural arrangements of an in-substance defeasance, the probability that the debtor will be required to make additional future debt payments is remote. In these specific circumstances, debt has been determined to be extinguished even though the debtor has not been legally released from his obligations under the debt instrument. Account 930.1, General Advertising Expenses, shall be charged with labor, material, and other expenses incurred in advertising and related activities, the cost of which by their content and purpose, are not provided for elsewhere. Account 912, Demonstrating and Selling Expenses, shall be charged with all labor, material, advertising, and other expenses incurred in promotional, demonstrating, and selling activities; the objective of which is to promote or retain the use of utility services by present or prospective customers. “Maintenance” is the general term used to describe the activities involved in the upkeep and repair, but not the enlargement or improvement, of property owned or leased and operated by the company.

Load control equipment shall be recorded in separate sub accounts of the primary plant accounts detailed above and shall be depreciated based upon the manufacturer’s estimate of the equipment’s useful service life. Load control equipment shall be recorded in separate sub accounts of the primary plant accounts detailed above and shall be depreciated based upon the owner’s estimate of the equipment’s useful service life. The purpose of the G&T load control computer system is to reduce or minimize the peak power requirements of the entire member distribution system. The computer system for load control retained earnings shall, therefore, be recorded in Account 353, Station Equipment, with the associated operating expenses recorded in Account 561, Load Dispatching, and maintenance expenses recorded in Account 570, Maintenance of Station Equipment. Costs relating to the determination of availability of service, rates, and similar items for individual applicants shall be charged to Account 912, Demonstrating and Selling Expenses. If it is expected that construction will result, the costs incurred to provide service, including staking, shall be charged to Account 107, Construction Work-in-Progress – Electric.

However, the Government recognizes its obligation to participate, to the extent of its fair share, in any specific payment. When the bonus and incentive compensation payments are deferred, the costs are subject to the requirements of paragraphs and of this subsection. Differential allowances for additional income taxes resulting from foreign assignments are allowable. The total compensation for individual employees or job classes of employees must be reasonable for the work performed; however, specific restrictions on individual compensation elements apply when prescribed.

There may be situations in which there is a fine line between self-insurance and purchased or commercial insurance. As long as there is at least some shifting of risk to the unrelated party, even if limited to situations such as provider bankruptcy or employee termination, the arrangement will not be considered self-insurance. Contributions to a special risk management fund or pool that is operated by a third party that assumes some of the risk and that has an annual actuarial review are allowable costs. Examples of such special risk management funds and pools include the Texas Council Risk Management Fund and the Texas Municipal League Intergovernmental Risk Pool.

This includes the cost of protection against fires, cost of detecting and prosecuting incendiaries, amounts paid to municipal corporations and others for fire protection, cost of protecting property of others from damages, and analogous items. The investor shall suspend application of the equity method when the investment together with any net advances made to the investee is reduced to zero. Additional losses shall not be provided for unless the investor has guaranteed obligations of the investee or is otherwise committed to provide further financial support for the investee. If the investee subsequently reports net income the investor shall resume applying the equity method at such time as its share of that net income equals the share of net losses not recognized during the period of suspension. Monthly charges shall be made to account 540, Depreciation and Amortization, to amortize the cost of fixed life intangibles such as permits, patents and franchises which are directly related to pipeline operations. Monthly charges shall be made to account 660, Miscellaneous Income Charges, to amortize the cost of intangibles such as goodwill which are not directly associated with pipeline operations.