§ 63.34. Reclassification of telephone plant to original cost.
Before making entries in its books of account to reclassify its telephone plant to original cost when first devoted to the public service, as required by the text of accounts 100:1, 100:2, 100:3, 100:4 and 100:7 of the uniform accounting system prescribed by § 63.32 (relating to systems of accounts), each telephone public utility subject to such system of accounts shall submit to the Commission, for approval, a draft of the entries which it proposes to make accompanied by all of the following data, sworn to or affirmed by the officer of the utility responsible for the preparation of such entries:
(1) Statement A. Statement A shall be a comprehensive statement of the procedures and methods followed by the utility in the determination of the original cost of its telephone plant at the effective date of the uniform accounting system prescribed by § 63.32. If procedures or methods or both differed with respect to classes of plant, such differences should be set forth clearly.
(2) Statement B. Statement B shall be a comprehensive index for the utility and for each of its predecessors of ledgers, journals and other books of account, of vouchers, work orders, contracts covering the purchase or construction of utility plant, time reports, payrolls and summaries and other original records which are the sources of entries in the books of account for telephone plant transactions and relevant reserves, and of other books and memoranda, such as minute books, operating maps and records, and similar items, which may be useful in the establishment of the historical development of the telephone plant and related reserves of the company. With the exception of mass recordssuch as material tickets, vouchers, work orders, time reports, payrolls, and similar itemsthe index shall describe each record, indicate the period covered by it, show the physical location of it, and give the name of the person in charge of it. For mass records, the index shall be so prepared to show, for each type record, the periods covered thereby at each location and identified, as appropriate, by the first and last serial number of the record for each period.
(3) Statement C. Statement C shall be an outline of the origin and the development of the utility, including a description of each consolidation and merger to which the utility or predecessors were parties, and each acquisition by the utility or by a predecessor of property comprising a substantially complete telephone system, exchange line, or toll line.
(4) Statement D. Statement D shall be a summary by years for the utility and for each of its predecessors of the gross debits and the gross credits to the telephone plant account from the date of origin of the telephone plant of the utility to the effective date of the system of accounts prescribed by § 63.32, setting forth all of the following:
(i) Plant acquired by merger or consolidation.
(ii) Plant constructed by the utility.
(iii) Plant acquired by purchase.
(v) Retirements of the plant which cannot be classified by subparagraphs (i)(iii).
(vi) Balance at the effective date of the system of accounts.
(5) Statement E. Statement E shall be a statement showing the following for each acquisition by the utility or by a predecessorthrough consolidation, merger or purchaseof property comprising a substantially complete telephone system, exchange line, or toll line:
(i) A description of the property acquired.
(ii) The names of parties to the transaction and whether the parties were affiliated with each other.
(iii) The date of incorporation of the merged constituent or vendor.
(iv) The date physical property was acquired.
(v) A balance sheet of the predecessor at the date its plant was acquired.
(vi) The book value of the plant acquired, by primary accounts, as recorded by the predecessor or vendor, at the date the physical property was acquired.
(vii) The cost of the plant to the acquirer, and how the cost was determined.
(viii) Entries recording the acquisition.
(ix) The amount recorded by the acquirer in subaccounts of 100:1, Telephone plant in service, of the uniform system of accounts prescribed by § 63.32.
(x) The amount of depreciation reserve applicable to the plant acquired, as shown in the books of account of the predecessor or vendor.
(xi) The adjustment of the depreciation reserve, if any, by the vendee with respect to the plant acquired, and the basis.
(xii) If the capital stock of the predecessor was acquired prior to the acquisition of its property, the date or dates such capital stock was acquired, from whom acquired, the consideration paid, and whether the vendor was an affiliate of the utility or of a predecessor.
(xiii) If the parties referred to in subparagraphs (ii) and (xii) were affiliates, the following additional information shall be furnished:
(A) With respect to subparagraph (ii), the name of the affiliated interest which acquired the property at arms-length, and the consideration paid by it shall be given.
(B) With respect to subparagraph (xii), the name of the affiliated interest which acquired the capital stock at arms-length, and the consideration paid by it shall be given.
(6) Statement F. Statement F shall be a statement for the accounting utility or its predecessors showing any increases in plant accounts resulting from the recording of appraised values. The statement should give the full journal entry together with a comparative balance sheet showing the accounts prior and subsequent to the journal entry at the time the appraisal was recorded.
(7) Statement G. Statement G shall, with respect to increments, that is, differences between paragraph (5) (vi) and (ix) and also the amounts shown by Statement F under paragraph (6) in plant accounts of the utility or its predecessors arising from plant acquisitions or from the recording of appraised values, state the amounts of the increments remaining in the plant account as of the reclassification date.
(8) Statement H. Statement H shall be a statement with detailed accounts showing telephone plant per books as of the date as of which telephone plant will be reclassified to original cost.
(9) Statement J. A statement J shall be a statement, by years of plant installation, of the original cost of the telephone plant proposed to be classified in the subaccounts of account 100:1, Telephone plant in service, of the uniform system of accounts prescribed in § 63.32.
(10) Statement K. Statement K shall be a comparative balance sheet, as of the effective date of the system of accounts, setting forth the accounts and the amounts appearing in the books of account both before entries to adjust the telephone plant to original cost have been made, and to give pro forma effect to the proposals of the utility for adjusting the telephone plant to original cost.
(11) Statement L. Statement L shall be a reconciliation of the book value of the telephone plant immediately before reclassification to original cost (as shown by Statement H in paragraph (8)) and the utility-determined original cost as of the effective date of the system of accounts (as shown in Statement J in paragraph (9)). The reconciliation shall show all adjustments by nature of adjustment in detail.
(12) Statement M. Statement M shall be an analysis of Account 100:4, Telephone plant acquisition adjustment, and of Account 100:7, Telephone plant adjustment, showing character and the basis for computation of each amount included and proposed to be included.
(13) Statement N. Statement N shall be a suggested plan for depreciating, amortizing, or otherwise disposing of, in whole or in part, the amounts included and includible, as of the effective date of the system of accounts, in Account 100:4, Telephone plant acquisition adjustment, and Account 100:7, Telephone plant adjustment, of the uniform system of accounts prescribed by § 63.32.
The provisions of this § 63.34 adopted March 25, 1946; amended through June 30, 1969.
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