FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D. C. TELEPHONE DIVISION ORDER NO. 7-D Commissioners Walker, Chairman, Brown, and Prall. At a meeting of the Telephone Division of the Federal Communications Commission held at its offices in Washington, D. C., on January 6, 1937: The Telephone Division having under consideration its Order No. 7-C promulgating the "Uniform System of Accounts for Telephone Companies, Issue of June 19, 1935, Effective January 1, 1936," and the Decree of the United States District Court for the Southern District of New York in the case of American Telephone and Telegraph Company, et al., v. The United States, as affirmed by the Supreme Court of the United States, December 7, 1936; IT IS ORDERED, That Order No. 7-C entered by the Telephone Division on the 19th day of June 1935, together with the draft of Uniform System of Accounts for Telephone Companies, Issue of June 19, 1935, be, and the same are hereby amended by this Order No. 7-D, and by the draft of amendments known as "Amendments of 'Uniform System of Accounts for Telephone Companies, Issue of June 19, 1935, Effective January 1, 1936,' ordered by the Federal Communications Commission, Telephone Division, Order No. 7-D," a copy of which is attached hereto and made a part hereof as if copied at length herein. IT IS FURTHER ORDERED, That a copy of said Order No. 7-D, together with the draft of the amendments attached thereto shall be embodied in printed form; that a copy thereof duly authenticated by the Secretary of the Commission, be filed in its archives, and a second copy thereof, authenticated in like manner, in the office of the Accounting, Statistical, and Tariff Department; and that each of said copies so authenticated and filed shall be deemed an original record thereof. IT IS FURTHER ORDERED, That Order No. 7-D, together with the draft of the amendments attached thereto shall become effective on the first day of January 1937. By the Commission, Telephone Division. [SEAL] JOHN B. REYNOLDS, Acting Secretary. AMENDMENTS OF "UNIFORM SYSTEM OF ACCOUNTS FOR TELEPHONE COMPANIES, ISSUE OF JUNE 19, 1935, EFFECTIVE JANUARY 1, 1936," ORDERED BY THE FEDERAL COMMUNICATIONS COMMISSION, TELEPHONE DIVISION, ORDER No. 7-D (1) Page 2: The first full paragraph on this page is eliminated and in lieu thereof there is inserted the following paragraph: The Interstate Commerce Commission's order specifying records which may be destroyed is contained in its "Regulations to Govern the Destruction of Records of Telephone, Telegraph, and Cable Companies, Issue of 1920," which order, as amended, remains in effect. (2) Page 5: The word "and" is eliminated from the last line of instruction 3 (O); the period at the end of that line is changed to a comma and the following words are added: and 100.4, "Telephone plant acquisition adjustment." (See also correlated change in account 103 on page 29.) (3) Page 5: Instruction 3 (S.1) is eliminated and in lieu thereof there is inserted the following instruction: (S.1) "Original cost" or "Cost," as applied to telephone plant, franchises, patent rights, and right-of-way, means the actual money cost of (or the current money value of any consideration other than money exchanged for) property at the time when it was first dedicated to the public use, whether by the accounting company or by predecessors. NOTE-For the application of this definition to property acquired from predecessors see instruction 21. (Note also instruction 3-G. 1.) (See also correlated changes in instruction 21 on page 12 and in account 100.4 on page 27.) (4) Page 6: Instruction 3 (CC) is eliminated and in lieu thereof there is inserted the following instruction: (CC) "Time of installation" means the date at which telephone plant is placed in telephone service. (5) Pages 12 and 13: Instruction 21 is eliminated and in lieu thereof there is inserted the following instruction: 21. Telephone plant acquired.—(A) When property comprising a substantially complete telephone system, exchange, or toll line is acquired from predecessors, the amount of money actually paid (or the current money value of any consideration other than money exchanged) for the property (together with preliminary expenses incurred in connection with the acquisition) shall be charged to account 276, "Telephone plant acquired." (Note also account 139.) (B) The accounting for the acquisition of the plant shall then be completed as follows: (1) The original cost, estimated if not known (note instruction 3-S.1), of telephone plant, governmental franchises and other similar rights acquired shall be charged to the telephone plant accounts, account 100.2, "Telephone plant under construction," and account 100.3, "Property held for future tele phone use," as appropriate, and credited to account 276. When the actual original cost cannot be determined and estimates are used, the company shall be prepared to furnish this Commission with the particulars of such estimates. (2) The amounts of the reserve requirements for depreciation and amortization of the plant acquired shall be credited to account 171, "Depreciation reserve," and account 172, "Amortization reserve," and debited to account 276. (3) The amount remaining in account 276, "Telephone plant acquired," applicable to the plant acquired, shall, upon completion of the entries provided in the foregoing paragraphs (1) and (2), be debited or credited, as appropriate, to account 100.4, "Telephone plant acquisition adjustment," except that when any amount thus chargeable to account 100.4 applies to duplicate or other telephone plant which will be retired by the vendee in the reconstruction of the acquired property and its consolidation with previously owned property, the accounting for the amount applicable to such plant shall be submitted to this Commission for consideration and approval. (C) The accounting for property acquired from predecessors, not provided for in paragraphs (A) and (B) hereof, shall be on basis of the amount of money actually paid (or the current money value of any consideration other than money exchanged) for such property. (D) A memorandum record shall be kept of the amount of contributions in aid of construction applicable to the property acquired as shown by the accounts of the previous owner. (E) Journal entries recording the acquisition of a substantially complete telephone system, exchange, or toll line, or other telephone plant where the consideration paid is $25,000 or more, shall be submitted to this Commission for consideration and approval. The text of such entries shall give a complete description of the property acquired and the bases upon which the amounts of the entries have been determined. (See also correlated changes in instruction 3-S. 1 on page 5 and in account 100.4 on page 27.) (6) Page 14: The note following subparagraph (8) of paragraph (B) of instruction 22 is eliminated. (See also correlated changes in notes (A) and (E) following account 305 on page 64.) (7) Page 19: "1936" is eliminated from the first and last lines of paragraph (A) of instruction 26 and in lieu thereof "1937" is substituted. (8) Pages 27 and 28: Account 100.4 is eliminated and in lieu thereof there is inserted the following account: 100.4. Telephone plant acquisition adjustment.—(A) This account shall include amounts determined in accordance with instruction 21 representing the difference between (a) the amount of money actually paid (or the current money value of any consideration other than money exchanged) for telephone plant acquired, plus preliminary expenses incurred in connection with the acquisition; and (b) the original cost (note instruction 3-S. 1) of such plant, governmental franchises and similar rights acquired, less the amounts of reserve requirements for depreciation and amortization of the property acquired. If the actual original cost is not known, the entries in this account shall be based upon an estimate of such cost. (B) This account shall be subdivided according to the character of the amounts contained therein. In addition to a copy of the journal entry recorded to open the account, the company shall file with this Commission statements showing the basis of the computation of amounts included therein. The detailed records supporting these statements shall be retained permanently by the company. (C) The amounts recorded in this account with respect to each property acquisition shall be disposed of, written off, or provision shall be made for the amortization thereof in such manner as this Commission may direct. (See also correlated changes in instructions 3-S.1 on page 5 and 21 on pages 12 and 13.) (9) Page 29: The word "and" is eliminated from the fifth line of the text of account 103; the period at the end of that line is changed to a comma and the following words are added: and 100.4, "Telephone plant acquisition adjustment.” (See also correlated change in instruction 3 (O) on page 5.) (10) Pages 38 and 40: The words ", discount, or premium" are eliminated from paragraph (C) of the text of account 153.1 on page 38 and from paragraph (C) of the text of account 154.2 on page 40. (11) Pages 57 and 58: "602.3" is eliminated and “602.7” is added to the last line of notes A following accounts 242.2 on page 57 and 242.3 on page 58, so that these notes will read: NOTE A.-The cost of pumping water out of manholes and of cleaning manholes and ducts in connection with the maintenance or operation of telephone plant shall be charged to accounts 602.4 or 602.7, as appropriate. (12) Page 64: Notes A and E following the text of account 305 are eliminated and the following notes A and E are inserted: NOTE A.-Taxes other than those on telephone plant, operations, and privileges shall be charged to account 322. NOTE E.-The accounting for taxes on physical property during construction and before the facilities are completed ready for service shall be in accordance with instruction 22-B-8. (See also correlated change under instruction 22(B) (8) on page 14.) (13) Page 77: The following title of an additional account is inserted after account 613 under the heading "II. Depreciation and Amortization Expenses" for both Class A and Class B companies: 614. Amortization of telephone plant acquisition adjustment.-This account (See correlated change on page 90.) (14) Pages 80 and 83: The item "Trimming trees, cutting underbrush, and other work to maintain previous clearances" is eliminated from the item lists under account 602.2 on page 80 and account 602.6 on page 83. (15) Pages 80 and 83: The item "Opening pavement and repaving in connection with repairs of underground cable" is eliminated from the item list under account 602.3 on page 80; the third item in the item list under account 602.7 on page 83 is eliminated and in lieu thereof the following item is inserted: Opening pavement and repaving in connection with repairs of underground cable and conduit. (16) Pages 84, 85, and 86: The words ", in connection with maintenance of outside plant," are eliminated from the second line of the text of account 603 on page 84; the items "Regulating power for repeaters", "Testing for, locating and clearing trouble. (See also note B to this account.)", and "Watching and regulating the operation of repeaters, duplex and multiplex apparatus on telephone and telegraph lines" are eliminated from the item list under account 604 on page 85; and the words "outside of central offices" are eliminated from the third line of note B following account 604 on page 86. (17) Page 90: The following new operating expense account is added after account 613 to the group of accounts designated "II. Depreciation and Amortization Expenses." 614. Amortization of telephone plant acquisition adjustment.-This account shall be charged or credited each month with such amounts as may be authorized by the Commission to be included in operating expenses under a plan to amortize amounts in account 100.4, "Telephone plant acquisition adjustment." Amounts so entered shall be charged or credited, as appropriate, to account 172, "Amortization reserve." (See correlated change on page 77.) (18) Page 107: The words ", plant removal," are eliminated from the second line of paragraph (G) of account 672. 3 F. C. C. |