§ 59.46. Reclassification of gas plant accounts.
(a) A utility whose annual operating revenues are $25,000 or more but less than $100,000 may not be required to reclassify the cost of plant installed prior to January 1, 1961, to an original cost basis until the time as its annual operating revenues reach $100,000 or more.
(b) When the annual operating revenues of a public utility become $100,000 or more, the utility shall be subject to Class C accounting requirements. The public utility shall within 2 years submit the following detailed statements relative to its plant account reclassification at original cost. The statements shall be sworn to or affirmed by the officer of the company responsible for their preparation, as follows:
(1) Statement A. Statement A shall show in outline form the origin and development of the utility, including a description of each consolidation and merger to which the utility or a predecessor was a party, and each acquisition of a gas operating unit or system by the utility or a predecessor. If any transaction relating to such property involved utility property other than the gas plant, that fact shall be stated.
(2) Statement B. Statement B shall show the chartered gas territory of the utility, giving the development of that territory according to each consolidation and merger or gas plant acquisition to which the utility or a predecessor was a party.
(3) Statement C. Statement C shall show a summary of gross debits and credits to Accounts 101, 102, 103, 104, 105, 106, 107 and 114, gas plant, from the date of origin of the gas plant of the utility to the effective date of such system of accounts as prescribed by § 59.42 (relating to systems of accounts), setting forth all of the following:
(i) Plant acquired by merger and consolidation.
(ii) Plant constructed by the utility.
(iii) Plant acquired by purchase.
(iv) Total.
(v) Retirements of plant which cannot be classified by the specific divisions of subparagraphs (i)—(iii).
(vi) Balance at effective date of the system of accounts.
(4) Statement D. Statement D shall show a summary analysis of the accumulated provisions for the depreciation, amortization and depletion of the gas plant, as established by the utility and its predecessors, from the date of origin of the gas plant of the utility to the effective date of the system of accounts as prescribed by § 59.42, showing all of the following:
(i) Credits arising from charges to operating expenses.
(ii) Salvage and other credits detailed by nature of transaction.
(iii) Gross debits for plant retired.
(iv) Cost of removal, and other debits detailed by nature of transaction.
(v) Balance at effective date of the system of accounts.
(5) Statement E. Statement E shall show contributions received by the utility and its predecessors, from customers or others, in the aid of construction of a gas plant, setting forth all of the following:
(i) The gross amount of contributions received from the date of origin of gas service to the effective date of such system of accounts as prescribed by § 59.42.
(ii) The amount of the contributions returned or retired as of the effective date of the system of accounts.
(iii) The difference between subparagraphs (i) and (ii).
(iv) The amount reflected in Account 271, ‘‘Contributions in aid of construction,’’ at the effective date of the system of accounts.
(v) A reconciliation of the difference between subparagraphs (iii) and (iv).
(6) Statement F. Statement F shall conform with all of the following:
(i) Statement F shall show, for each acquisition through consolidation and merger or purchase of a gas operating unit or system by the utility or a predecessor, all of the following:
(A) A description of the property acquired.
(B) The names of parties to the transaction and whether the parties were affiliated.
(C) The date the transaction was consummated.
(D) The original cost, estimated if not known.
(E) The value of the plant, as reflected on books of merger constituent or vendor.
(F) The cost of the plant to the acquirer, and the manner and method of determination of such cost.
(G) The amount recorded on the books of the acquirer with respect to the plant acquired.
(H) The amount accumulated provisions for depreciation applicable to the plant acquired, as reflected on books of merger constituent or vendor.
(I) An adjustment of amortization or depletion of the acquirer in respect to the plant acquired and the basis thereof.
(J) A summary of the appraisal, if any, prepared for the plant acquired at the date of acquisition, showing the elements of value included therein, by whom prepared, and the date. With respect to each acquisition, there shall be shown the difference between original cost and the amount recorded on the books; a summary of all transactions affecting the difference between the date of acquisition and the effective date of such system of accounts prescribed by § 59.42; and the resultant amount on the latter date. The amount to be included in Account 114, ‘‘Gas plant acquisition adjustments,’’ shall be subdivided to show the amounts applicable to plant in service, plant leased to others, and plant held for future use. If practicable, the amount shall be classified according to its nature, that is, structural value, going value, and the like.
(ii) If estimates are used in arriving at original cost or the amount to be included in Account 114 of the uniform system of accounts prescribed by § 59.42, a full disclosure of the method or methods used in preparing the estimates, with the underlying facts, shall be given. The method or methods of determining the original cost of the gas plant acquired as operating units or systems shall be described in sufficient particularity to permit a clear understanding of the investigations which were made for that purpose. The amount claimed as the original cost of acquired property shall be supported by separate statements for each acquisition by the respondent and by each successive predecessor (prepared from the books and records of each predecessor company) showing a summary of gross debits and credits to the gas plant, classified by balance sheet subaccounts, from the date of origin of the gas plant of the predecessor to the date of dissolution or the effective date of sale or other transfer of the gas plant, setting forth all of the following:
(A) Plant acquired by merger and consolidation.
(B) Plant constructed by such predecessor.
(C) Plant acquired by purchase.
(D) Total.
(E) Retirements of plant which cannot be classified by the specific divisions in subparagraphs (i)—(iii).
(F) Balance at date of dissolution or effective date of sale or other transfer of the gas plant.
(iii) There shall also be shown a summary analysis of the related accumulated provisions for depreciation, amortization, and depletion of the gas plant as established by each predecessor, setting forth all of the following:
(A) Credits arising from charges to operating expenses.
(B) Salvage and other credits detailed by nature of transaction.
(C) Gross debits for plant retired.
(D) Costs of removal, and other debits detailed by nature of transaction.
(9) Statement G. Statement G shall show the amounts arrived at by appraisals recorded prior to the effective date of the system of accounts prescribed by § 59.42 in lieu of cost to the reporting company. This statement should give the full journal entry at the time the appraisal was originally recorded, and if the entry had the effect of appreciating or writing up the gas plant account, the amount of the appreciation or write up should be traced, by proper description and explanation of the changes from the date recorded to the effective date of such system of accounts.
(10) Statement H. Statement H shall show gas plant per books immediately prior to reclassification in accordance with the system of accounts prescribed by § 59.42 including, under a descriptive heading, an unclassified amounts applicable jointly to the gas department and other departments of the utility.
(11) Statement I. Statement I shall show a summary of adjustments necessary to record, as of the effective date of the system of accounts prescribed by § 59.42, Accounts 101, 102, 103, 104, 105, 106, 107 and 114, gas plant, and Account 116, ‘‘Other Gas Plant Adjustments.’’
(12) Statement J. Statement J shall show gas plant balance sheet Accounts 101, 102, 103, 104, 105, 106, 107 and 114 as of the effective date of the system of accounts prescribed by § 59.42 classified according to detailed accounts, and showing also the amount includible in Account 116, ‘‘Other Gas Plant Adjustments.’’
(13) Statement K. Statement K shall show a comparative balance sheet, as of the effective date of the system of accounts prescribed by § 59.42 setting forth the accounts and amounts appearing in the books before the adjusting entries have been made and after the entries have been made.
(14) Statement L. Statement L shall show a suggested plan for depreciating, amortizing, or otherwise disposing in whole or in part of the amounts, as of the effective date of such system of accounts prescribed by § 59.42 includible in Account 114, ‘‘Gas Plant Acquisition Adjustments,’’ and Account 116, ‘‘Other Gas Plant Adjustments.’’
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