8 PART 1201—RAILROAD COMPANIES Subpart A—Uniform

Pt. 1201 49 CFR Ch. X (10–1–06 Edition)

PART 1201—RAILROAD 2–15 Merger, consolidation, and purchase of a railway operating entity or system. COMPANIES 2–16 Reorganization of railway. 2–17 Construction projects in which govern- Subpart A—Uniform System of mental agencies, individuals, or others, Accounts and the carrier participate. 2–18 Leased property improvements and retirements. LIST OF INSTRUCTIONS AND ACCOUNTS 2–19 List of units of property. 2–20 Accounting for leases. REGULATIONS PRESCRIBED 2–21 Freight train car repair costing. 2–22 Map specifications. (i) Regulations prescribed. 2–23 Accounting for engineering costs. (ii) Definitions. 2–24 Accounting for other general expenditures. GENERAL INSTRUCTIONS INSTRUCTIONS FOR MAINTENANCE Sec. EXPENSES 1–1 Classification of carriers. 1–2 Classification of accounts. 3–1 Items to be charged. 1–3 Records. 1–4 Accounting period. 1–5 Accrual method of accounting. INSTRUCTIONS FOR DEPRECIATION 1–6 Charges to be just and reasonable. ACCOUNTS 1–7 Changes in accounting estimates. 1–8 Accounting for computer systems and 4–1 Method. word processing costs. 4–2 Rates of depreciation. 1–9 Transactions with affiliated companies. 4–3 Depreciation records to be kept. 1–10 Accounting for income taxes. 4–4 Leased property—depreciation. 1–11 Items in texts of accounts. 4–5 Jointly used property—depreciation. 1–12 Distribution of pay and expenses of employees. INSTRUCTIONS FOR INCOME AND 1–13 Payroll related expenses. 1–14 Submission of questions. BALANCE SHEET ACCOUNTS 1–15 Transfers from government authorities. 5–1 Current assets. 1–16 Business entertainment expenses. 5–2 Recorded value of securities owned. 1–17 Disclosure guideline. 5–3 Discounts, expenses, and premiums on 1–18 Distribution of expenses for material, debt. tools, fuel, lubricants, purchased services 5–4 Discount, premium, and assessment on and general. capital stock. 5–5 Joint liabilities. 5–6 Contingencies. INSTRUCTIONS FOR PROPERTY 5–7 Long-term obligations. ACCOUNTS INSTRUCTIONS FOR CLEARING 2–1 Items to be charged. 2–2 Minimum rule applicable to additions to ACCOUNTS property. 2–3 Land. 6–1 Items to be charged. 2–4 Structures. 6–2 Material and stationery store expenses. 2–5 Equipment. 6–3 Shop expenses. 2–6 Components of construction cost. 6–4 Gravel and sand pits and quarries. 2–7 Additions to and retirements of prop- 6–5 Power plant operations. erty—General. 2–8 Additions to and retirements of units of PROPERTY ACCOUNTS property. 2–9 Additions and retirements of other than units of property. Road 2–10 Additions to and retirements of track. 2–11 Expenses in connection with additions 0 Road. and betterments. 2 Land for transportation purposes. 2–12 Units of property rebuilt or converted. 3 Grading. 2–13 Changes in line of road and relocation 4 Other right-of-way expenditures. of yard tracks. 5 Tunnels and subways. 2–14 Track connections. 6 Bridges, trestles, and culverts.

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7 Elevated structures. Joint Facility Revenue Accounts 8 Ties. 9 Rails and other track material. 120 Joint facility. 11 Ballast. 121 Joint facility—credit. 13 Fences, snowsheds, and signs. 122 Joint facility—debit. 16 Station and office buildings. 17 Roadway buildings. 18 Water stations. OPERATING EXPENSE ACCOUNT 19 Fuel stations. 20 Shops and enginehouses. Operating Expense Accounts 22 Storage warehouses. Explanations 23 Wharves and docks. 24 Coal and ore wharves. 100000 Personnel. 25 TOFC/COFC terminals. 110000 Salaries and wages. 26 Communication systems. 120000 Fringe benefits. 27 Signals and interlockers. 200000 Materiel. 29 Power plants. 210000 Materials, tools, supplies, fuels, lu- 31 Power-transmission systems. bricants. 35 Miscellaneous structures. 300000 Purchased services. 37 Roadway machines. 310000 Lease rentals—Debit. 39 Public improvements; construction. 320000 Lease rentals—Credit. 44 Shop machinery. 330000 Joint facility rents—Debit. 45 Power-plant machinery. 340000 Joint facility rents—Credit. 350000 Other rents—Debit. 360000 Other rents—Credit. Equipment 370000 Joint facility—Debit. 380000 Joint facility—Credit. 50 Equipment. 390000 Repairs billed by others—Debit. 52 Locomotives. 400000 Repairs billed to others—Credit. 53 Freight-train cars. 410000 Other purchased services. 54 Passenger-train cars. 500000 Claims and insurance. 55 Highway revenue equipment. 510000 Loss and damage claims. 56 Floating equipment. 520000 Other casualties. 57 Work equipment. 530000 Insurance. 58 Miscellaneous equipment. 600000 General. 610000 Other expenses. 59 Computer systems and word processing 620000 Depreciation. equipment. 630000 Uncollectible accounts. 640000 Property taxes. General Expenditures 650000 Other taxes.

70 General expenditures. INCOME ACCOUNTS 76 Interest during construction. Ordinary Items Other Property Accounts 501 Railway operating revenues. 80 Other elements of investment. 502 Railway operating revenues—transfers 90 Construction in progress. from government authorities for current operations. 503 Railway operating revenues—amortiza- RAILWAY OPERATING REVENUE tion of deferred transfers from govern- ACCOUNTS ment authorities. 506 Revenues from property used in other Transportation Revenue Accounts than carrier operations. 510 Miscellaneous rent income. 512 Separately operated properties; profit. 100 Transportation; rail line. 513 Dividend income. 101 Freight. 514 Interest income. 102 Passenger. 516 Income from sinking and other funds. 103 Passenger-related. 517 Release of premiums on funded debt. 104 Switching. 518 Reimbursement received under con- 105 Water transfers. tracts and agreements. 106 Demurrage. 519 Miscellaneous income. 110 Incidental. 531 Railway operating expenses.

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534 Expenses of property used in other than 705 Accounts receivable; interline and other carrier operations. balances. 544 Miscellaneous taxes. 706 Accounts receivable; customers. 545 Separately operated properties; loss. 707 Accounts receivable; other. 546 Interest on funded debt. 708 Interest and dividends receivable. 547 Interest on unfunded debt. 708.5 Receivables from affiliated companies. 548 Amortization of discount on funded 709 Accrued accounts receivable. debt. 709.5 Allowance for uncollectible accounts. 549 Maintenance of investment organiza- 710 Working funds. tion. 711 Prepayments. 550 Income transferred under contracts and 712 Material and supplies. agreements. 713 Other current assets. 551 Miscellaneous income charges. 714 Deferred income tax debits. 553 Uncollectible accounts. 555 Unusual or infrequent items (debit) SPECIAL FUNDS credit. 556 Income taxes on ordinary income. 715 Sinking funds. 557 Provision for deferred taxes. 716 Capital funds. 560 Income or loss from operations of dis- 717 Other funds. continued segments. 562 Gain or loss on disposal of discontinued INVESTMENTS segments. 721 Investments and advances; affiliated 570 Extraordinary items (net). companies. 590 Income taxes on extraordinary items. 721.5 Adjustments; investments and ad- 591 Provision for deferred taxes—extraor- vances—affiliated companies. dinary items. 722 Other investments and advances. 592 Cumulative effect of changes in ac- 723 Adjustments; other investments and ad- counting principles. vances. 724 Allowance for net unrealized loss on RETAINED EARNINGS ACCOUNTS noncurrent marketable equity securities—Cr.

Credit TANGIBLE PROPERTY 601 Credit balance (at beginning of calendar 731 Road and equipment property. year). 732 Improvements on leased property. 601.5 Prior period adjustments to beginning 733 Accumulated depreciation; improve- retained earnings account. ments on leased property. 602 Credit balance transferred from income. 734 Accumulated amortization; improve- 603 Appropriations released. ments on leased property—defense 606 Other credits to retained earnings. projects. 735 Accumulated depreciation; road and equipment property. Debit 736 Accumulated amortization; road and equipment property—defense project. 611 Debit balance (at beginning of calendar 737 Property used in other than carrier op- year). erations. 612 Debit balance transferred from income. 738 Accumulated depreciation; property 616 Other debits to retained earnings. used in other than carrier operations. 620 Appropriations for sinking and other funds. INTANGIBLE PROPERTY 621 Appropriations for other purposes. 623 Dividends. 739 Organization expenses.

GENERAL BALANCE SHEET OTHER ASSETS AND DEFERRED DEBITS ACCOUNTS EXPLANATIONS 741 Other assets. 743 Other deferred debits. 744 Accumulated deferred income tax deb- Assets its.

CURRENT ASSETS Liabilities and Shareholders’ Equity 701 Cash. 702 Temporary cash investments. CURRENT LIABILITIES 703 Special deposits. 704 Loans and notes receivable. 751 Loans and notes payable.

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752 Accounts payable; interline and other 930 Publication of data. balances. 940 Annual branch line report. 753 Audited accounts and wages payable. 950 Text and chart of accounts. 754 Accounts payable; other. APPENDIX I TO PART 1201—CERTIFICATION OF 755 Interest payable. BRANCH LINE ACCOUNTING SYSTEM 756 Dividends payable. RECORDS 757 Payables to affiliated companies. 759 Accrued accounts payable. AUTHORITY: 49 U.S.C. 11142 and 11164. 760 Federal income taxes accrued. 761 State and other income taxes accrued. Subpart A—Uniform System of 761.5 Other taxes accrued. 762 Deferred income tax credits. Accounts 763 Other current liabilities. 764 Equipment obligations and other long- SOURCE: 42 FR 35017, July 7, 1977, unless term debt due within one year. otherwise noted.

LONG-TERM DEBT DUE AFTER ONE YEAR LIST OF INSTRUCTIONS AND ACCOUNTS 765 Funded debt unmatured. 766 Equipment obligations. REGULATIONS PRESCRIBED 766.5 Capitalized lease obligations. 767 Receivers’ and trustees’ securities. (i) Regulations prescribed. Carriers by 768 Debt in default. railroad subject to provisions of the 769 Accounts payable; affiliated companies. Interstate Commerce Act and not inde- 770.1 Unamortized debt discount. 770.2 Unamortized premium on debt. pendently operated as electric lines, and each lessor of such a carrier, shall OTHER LONG-TERM LIABILITIES comply with regulations in this part as presented hereinafter. 771 Accrued liability; pension and welfare. (ii) Definitions. 772 Accrued liability; leased property. 774 Accrued liability; casualty and other 1. Abandonment means the with- claims. drawal from transportation service of a 775 Other accrued liabilities. branch line or other track segment or 781 Interest in default. facility, representing a permanent re- 782 Other liabilities. duction in plant. 783 Deferred revenues—transfers from gov- 2. Accounts means the accounts pre- ernment authorities. scribed in this system of accounts. 3. Actually issued as applied to funded DEFERRED CREDITS debt securities or capital stock issued 784 Other deferred credits. or assumed by the company, means 786 Accumulated deferred income tax cred- those which have been sold to bona fide its. purchasers or holders for a valuable consideration (including those issued SHAREHOLDERS’ EQUITY in exchange for other securities or 791 Capital stock. other property) and such purchasers or 792 Capital stock to be distributed. holders secured them free from control 793 Discount on capital stock. by the carriers. Also securities issued 794 Premiums and assessments on capital as dividends on stock. stock. 4. Actually outstanding as applied to 795 Other capital. 797 Retained earnings; appropriated. funded debt securities or capital stock 798 Retained earnings; unappropriated. issued or assumed by the carrier means 798.1 Net unrealized loss on noncurrent those which have been actually issued marketable securities. and are neither retired and canceled 798.5 Treasury stock nor reacquired and held by or for the accounting company. Conversion Tables 5. (a) Affiliated companies means companies or persons that directly, or indi- Subpart B—Branch Line rectly through one or more inter- Accounting System mediaries control, or are controlled by, or are under common control with, the 900 Definitions. accounting carrier. 910 Purpose and scope. (b) Control (including the terms con- 920 Collection of data. trolling, controlled by, and under common

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control with) means the possession di- difference between the collected bank rectly or indirectly, of the power to di- ledger balance and the cash balance per rect or cause the direction of the man- carrier’s books. agement and policies of a company, 11. Cost center refers to an organiza- whether such power is exercised tional subdivision for which cost data through one or more intermediary are desired and for which provision is companies, or alone, or in conjunction made to accumulate costs such as a with, or pursuant to an agreement, and terminal, yard, or track segment. A whether such power is established cost center may correspond to a given through a majority of minority owner- area of responsibility for which costs ship or voting of securities, common are presently accumulated for planning directors, officers or stockholders, vot- and control. A cost center is the small- ing trusts, holding trusts, associated est segment of activity or area of re- companies, contract or any other di- sponsibility for which costs are accu- rect or indirect means. mulated and directly traceable. 6. Amortization means the gradual ex- 12. Cost of renewal means the cost of tinguishment of an amount in an ac- additional material applied (other than count by distributing such amount the value assigned second-hand parts over a fixed period dependent on the re- remaining in the rebuilt unit) plus the quirements of regulatory bodies, over cost of labor used in the rebuilding the life of the asset or liability to process, exclusive of the portion appli- which it applies, or over the period dur- cable to dismantling and repair of old ing which it is anticipated the benefit parts reused. will be realized. 13. Cost of removal means cost of de- 7. Carrier as used herein and when not molishing, dismantling, tearing down otherwise indicated in the context or otherwise removing property. means any carrier to which this system 14. Debt issue cost means all costs in of accounts is applicable. connection with the issuance and sale 8. Consolidation means the formation of evidences of debt, such as fees for of a new company. See instruction 2–15. drafting mortgages and trust deeds; 9. Board means the Surface Transpor- fees for issuing or recording evidences tation Board. of debt; cost of engraving and printing 10. Compensating balance means the bonds and certificates of indebtedness; portion of any demand deposit (or any fees paid trustees, specific costs of ob- time deposit or certificate of deposit) taining governmental authority; fees maintained by a carrier (or by any per- for legal services; fees and commissions son on behalf of the carrier) which con- paid underwriters, brokers and sales- stitutes support for existing borrowing people for marketing such evidences arrangements of the carrier with a for debt; fees and costs of listing on ex- lending institution. Such arrangements changes; and other like costs. include both outstanding borrowings 15. Discount as applied to funded debt and the assurance of future credit securities or capital stock issued or as- availability. (The compensating bal- sumed by the carrier, means the excess ance requirement should be adjusted by of the par or face value of the securi- the amount of float unless such adjust- ties plus interest or dividends accrued ment would cause the compensating at the date of the sale over the cash balance to be greater than the cash value of the consideration received balance per carrier’s books.) The float from their sale. adjustment is made by subtracting the 16. Equity security encompasses any float from the compensating balance instrument representing ownership requirement if the collected bank ledg- shares (e.g., common, preferred and er balance exceeds the cash balance per other capital stock), or the right to ac- carrier’s books or by adding the float quire (e.g., warrants, rights, and call to the compensating balance require- options) or dispose of (e.g., put options) ment if the collected bank ledger bal- ownership shares in an enterprise at ance is less than the cash balance per fixed or determinable prices. The term carrier’s books. does not encompass preferred stock (a) Float means deposits and with- that by its terms either must be re- drawals in transit which constitute a deemed by the issuing enterprise or is

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redeemable at the option of the inves- the new cost basis assigned shall be tor, nor does it include treasury stock considered cost. or convertible bonds. 17. (a) Income taxes means taxes based (a) Marketable, as applied to an eq- on income determined under provisions uity security, means an equity security of the United States Internal Revenue as to which sales prices or bid and ask Code and foreign, state and other taxes prices are currently available on a na- (including franchise taxes) based on in- tional securities exchange (i.e., those come. registered with the Securities and Ex- (b) Income tax expense means the change Commission) or in the over-the- amount of income taxes (whether or counter market. In the over-the- not currently payable or refundable) counter market, an equity security allocable to a period in the determina- shall be considered marketable when a tion of net income. quotation is publicly reported by the (c) Pretax accounting income means in- National Association of Securities come or loss for a period, exclusive of Dealers Automatic Quotations System related income tax expense. or by the National Quotations Bureau, (d) Taxable income means the excess Inc. (provided, in the latter case, that of revenues over deductions or the ex- quotations are available from at least cess of deductions over revenue to be three dealers). Equity securities traded reported for income tax purposes for a in foreign markets shall be considered period. marketable when such markets are of a breadth and scope comparable to those (e) Timing differences means dif- referred to above. This definition is not ferences between the periods in which met by restricted stock (securities for transactions affect taxable income and which sale is restricted by a govern- the periods in which they enter into mental or contractual requirement ex- the determination of pretax accounting cept where such requirement termi- income. Timing differences originate in nates within one year or where the one period and reverse or turn around holder has the power to cause the re- in one or more subsequent periods. quirement to be met within one year). Some timing differences reduce income Any portion of the stock which can taxes that would otherwise be payable reasonably be expected to qualify for currently; others increase income taxes sale within one year, such as may be that would otherwise be payable cur- the case under Rule 144 or similar rules rently. of the Securities and Exchange Com- (f) Permanent differences means dif- mission, is not considered restricted. ferences between taxable income and (b) Market value refers to the aggre- pretax accounting income arising from gate of the market price of a single transactions that, under applicable tax share or unit times the number of laws and regulations, will not be offset shares or units of each marketable eq- by corresponding differences or turn uity security in the portfolio. When an around in other periods. equity has taken positions involving (g) Tax effects means differentials in short sales, sales of calls, and pur- income taxes of a period attributable chases of puts for marketable equity to (1) revenue or expense transactions securities and the same securities are which enter into the determination of included in the portfolio, those con- pretax accounting income in one period tracts shall be taken into consider- and into the determination of taxable ation in the determination of market income in another period, (2) deduc- value of the marketable equity securi- tions or credits that may be carried ties. backward or forward for income tax (c) Cost, as applied to a marketable purposes and (3) adjustments of prior equity security, refers to the original periods and direct entries to other cost unless a new cost basis has been stockholders’ equity accounts which assigned based on recognition of an im- enter into the determination of taxable pairment of value that was deemed income in a period but which do not other than temporary or as the result enter into the determination of pretax of a transfer between current and non- accounting income of that period. A current classifications. In such cases, permanent difference does not result in

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a tax effect as that term is used in this structure or other property used exclu- definition. sively by each of two or more carriers (h) Deferred taxes means tax effects are not joint facilities. which are deferred for allocation to in- 20. Ledger value of an account means come tax expense of future periods. the undepreciated or unamortized cost (i) Interperiod tax allocation means the of acquisition of the item to the car- process of apportioning income taxes rier, recorded in the general ledger. In among periods. case the cost of any item of property is (j) Tax allocation within a period not shown separately in the ledger, the means the process of apportioning in- ledger value of that item shall be its come tax expenses applicable to a proportionate share of the value of the given period between income before ex- entire group in which the particular traordinary items and extraordinary property is included. items, and of associating the income 21. Merger means the acquisition of tax effects of adjustments of prior peri- one company by another. See instruc- ods and direct entries to other stock- tion 2–15. holders’ equity accounts with these 22. Minor items of property means the items. associated parts or items of which 18. (a) Investor means a business enti- units of property are composed. ty that holds an investment in voting 23. Net railway operating income: Oper- stock of another company. ating revenue remaining after deduct- (b) Investee means a corporation that ing operating expenses, income taxes issued voting stock held by an inves- on ordinary income, and the provision tor. for deferred income taxes. Also, in ar- (c) Corporate joint venture is a com- riving at NROI, deduct the Income pany owned and operated as a separate from Lease of Road and Equipment and and specific business or project for the add the Rent for Leased Road and mutual benefit of the members of the Equipment, formerly accounts 509 and group. Joint facilities for purposes of 542, respectively. this system of accounts are not consid- 24. Net salvage value means salvage ered corporate joint ventures. value of property retired less the cost (d) Dividends when applied to dis- of removal. tributions received from investees un- 25. Nominally issued as applied to less otherwise specified, means divi- funded debt securities or capital stock dends received or receivable in cash, issued or assumed by the carrier, other assets, or another class of stock means those which have been signed, and does not include stock dividends or certified by trustees, or otherwise exe- stock splits. cuted, and placed with the proper offi- (e) Earnings or losses of an investee and cer for sale and delivery, or pledged, or financial position of an investee refer to otherwise placed in some special fund net income (or net loss) and financial of the accounting company, but which position of an investee determined in have not been sold or issued directly to accordance with generally accepted ac- the trustees of such fund in accordance counting principles. with contractual requirements. (f) Undistributed earnings of an 26. Nominally outstanding as applied investee means net income less divi- to funded debt securities or capital dends declared whether received or not. stock issued or assumed by the carrier, (g) Date of acquisition is the date on means those which, after being actu- which the investor assumes the rights ally issued, have been reacquired by or of ownership. Ordinarily, this is the for the accounting company under such date assets are received and other as- circumstances which require them to sets are given or securities issued. be considered as held alive and not re- 19. Joint facility means any owned or tired and canceled. leased carrier operating property occu- 27. Premium as applied to funded debt pied or operated jointly by the carrier securities or capital stock issued or as- and one or more other carriers, under sumed by the carrier, means the excess an arrangement whereby the cost and of the cash value of the consideration income are apportioned to the parties received from their sale over the sum to the joint agreement. Portions of a of their par (stated value of no par

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stock) or face value and interest or sidiary, a division, or a department, dividends accrued at the date of sale. and in some cases a joint venture or 28. Programmed track replacements are other non-subsidiary investee, provided costs incurred as part of a track re- that its assets, results of operations, placement program or planned expendi- and activities can be clearly distin- tures. Programmed track replacements guished, physically and operationally are generally performed by relatively and for financial reporting purposes, large work gangs which, on the basis of from the other assets, results of oper- programmed and authorized work or- ations, and activities of the entity. The ders, use heavy mechanized equipment fact that the results of operations of to replace rail, ties and other track the segment being sold or abandoned material. For guidance on what not to cannot be separately identified strong- capitalize, see the notes to the text of ly suggests that the transaction should Accounts 8, 9 and 11. 29. Property retired means units of not be classified as a disposal of a seg- property which have been removed, ment of business. sold, abandoned, destroyed, or which (a) Measurement date means the date for any cause have been permanently on which the management having au- withdrawn from service; also minor thority to approve the action commits items of property not replaced. itself to a formal plan to dispose of a 30. Rail Transportation Property. Rail segment of the business, whether by transportation property is all property abandonment or sale. The measure- and other assets, irrespective of owner- ment date for disposals requiring Com- ship, that comprise the entire oper- mission approval shall be the service ating unit devoted to rail transpor- date of the Order authorizing the dis- tation service. This definition com- posal. prises the following accounts: (b) Disposal date refers to the date of 701 Cash closing the sale, if the disposal is by 703 Special deposits sale or the date that operations cease if 704 Loans and notes receivable the disposal is by abandonment. 705 Accounts receivable—interline and 33. Service life means the period be- other balances 706 Accounts receivable—customers tween the date when operating prop- 707 Accounts receivable—other erty is placed in service and the date of 708.5 Receivable with affiliated companies its retirement. 709 Accrued accounts receivable 34. Service value means the ledger 710 Working funds value of operating property less its sal- 711 Prepayments 712 Material and supplies vage value (see definition 17). 713 Other current assets 35. Track maintenance is material and 714 Deferred income tax charges labor costs of routine track repairs 731 Road and equipment property such as sporadic tie replacement, re- 732 Improvements on leased property pair of broken rails, tightening track 31. Salvage value means the amount bolts and track spikes. A more com- received from the sale of operating plete list of maintenance items are in- property retired less any expenses in cluded in notes to the text of Accounts connection with the sale or in pre- 8, 9 and 11. paring the property for sale. If the 36. Work equipment means equipment property is retained for reuse, the sal- which can be coupled in a train for vage value shall be recorded in account movement over the carrier’s tracks, 712, Materials and Supplies, or other and which is used in the carrier’s work appropriate account at an amount not service. See equipment listing for ac- to exceed its recorded cost (actual or count 57, Work equipment. average), or current market value, whichever is lower. [42 FR 35017, July 7, 1977, as amended at 44 32. Segment of a business refers to a FR 3493, Jan. 19, 1979; 45 FR 31110, May 12, component of an entity whose activi- 1980; 48 FR 7183, Feb. 18, 1983; 48 FR 33718, ties represent a separate major line of July 25, 1983; 49 FR 2254, Jan. 19, 1984; 52 FR business or class of customer. A seg- 4321, Feb. 11, 1987] ment may be in the form of a sub-

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GENERAL INSTRUCTIONS elimination of contracted services, where regulations will unduly burden 1–1 Classification of carriers. (a) For the carrier, the carrier may request the purposes of accounting and reporting, Board for an exception to the regula- carriers are grouped into the following tions. This request shall be in writing three classes: specifying the conditions justifying an Class I: Carriers having annual car- exception. rier operating revenues of $250 million (c) Class I carriers shall keep all of or more after applying the railroad rev- the accounts of this system which are enue deflator formula shown in Note A. applicable to their operations. Class II Class II: Carriers having annual car- and III carriers are not required to rier operating revenues of less than maintain the accounts of this system. $250 million but in excess of $20 million (d) All switching and terminal com- after applying the railroad revenue panies, regardless of their operating deflator formula shown in Note A. revenues will be designated Class III Class III: Carriers having annual car- carriers. rier operating revenues of $20 million (e) Unless provided for otherwise, all or less after applying the railroad rev- electric railway carriers, regardless of enue deflator formula shown in Note A. operating revenues, will be designated (b)(1) The class to which any carrier Class III carriers. belongs shall be determined by annual carrier operating revenues after the NOTE A: The railroad revenue deflator formula is based on the Railroad Freight Price railroad revenue deflator adjustment. Index developed by the Bureau of Labor Sta- Families of railroads operating within tistics. The formula is as follows: the United States as a single, inte- Current Year’s Revenues × (1991 Average grated rail system will be treated as a Index/Current Year’s Average Index) single carrier for classification pur- NOTE B: See related regulations 49 CFR poses. Upward and downward reclassi- 1241.15 Railroad classification survey form. fication will be effected as of January 1 in the year immediately following the [57 FR 27185, June 18, 1992; 57 FR 31754, July 17, 1992; 66 FR 56245, Nov. 7, 2001; 67 FR 57533, third consecutive year of revenue qual- Sept. 11, 2002] ification. (2) If a Class II or Class III carrier’s 1–2 Classification of accounts. (a) Ac- classification is changed based on three counts are prescribed to cover cost of years’ adjusted revenues the carrier property used in transportation oper- shall complete and file the Classifica- ations and operations incidental there- tion Index Survey Form with the Board to and for revenues, expenses, taxes, by March 31 of the year following the rents, and other items of income for end of the period to which it relates. such operations. Separate accounts are (3) Newly organized carriers shall be prescribed for investment in property classified on the basis of their annual not used in transportation operations carrier operating revenues after rail- and for other investments and income road revenue deflator adjustment for therefrom; for unusual and infrequent the latest period of operation. If actual items; for operations and disposal of data are not available, new carriers discontinued segments; for extraor- shall be classified on the basis of their dinary items and accounting changes; carrier operating revenues known and and for assets, liabilities and capital estimated for a year (after railroad includable in the balance sheet state- revenue deflator adjustment). ment. Retained earnings accounts form (4) When a business combination oc- the connecting link between the in- curs, such as a merger, reorganization, come account and the equity section of or consolidation, the surviving carrier the balance sheet. They are provided to shall be reclassified effective January 1 record the transfer of net income or of the next calendar year on the basis loss for the year; certain capital trans- of the combined revenue for the year actions; and, when authorized by the when the combination occurred (after Board, other items. railroad revenue deflator adjustment). (b) The cost of property, and the rev- (5) In unusual circumstances, such as enues, expenses, taxes and rents for partial liquidation and curtailment or miscellaneous operations involving the

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use of such facilities as hotels, res- lated to the ordinary and typical ac- taurants, grain elevators, storage tivities of the entity. warehouses, power plants, cold storage Infrequent occurrence means the plants, etc., shall not be included in event or transaction shall be of a type the accounts prescribed for transpor- not reasonably expected to recur in the tation operations unless the operation foreseeable future. of the facilities is conducted by the (2) Unusual or Infrequent Items. Mate- railway companies in connection with rial events unusual in nature or infre- furnishing transportation services. quent in occurrence but not both, thus Likewise, the cost of property, the rev- not meeting both criteria for classi- enues, expenses, taxes, and rents aris- fication as extraordinary, shall be in- ing from the operation of stockyards cludable in the accounts provided as shall not be included in accounts pre- separate components of income/expense scribed for transportation operations from continuing operations. unless operation of the facilities is con- (3) Discontinued Operations. The re- ducted in connection with transpor- sults of continuing operations shall be tation of livestock. It is not intended reported separately from discontinued that cost of property and income aris- operations and any gain or loss resulting from incidental public stockyards ing from disposal of a segment of a service rendered by stockyards pri- business (see definition 23(a)) shall be marily devoted to transportation serv- reported in conjunction with the re- ices shall be excluded from transpor- lated results of discontinued operations tation operation accounts. and not as an extraordinary item. The (c) Joint facility accounts are pro- disposal of a segment of a business vided for the joint users of tracks, shall be distinguished from other dis- bridges, yards, wharves, stations, and posals of assets incident to the evo- other facilities in which to record lution of the entity’s business, such as items in settlement for use of such fa- the disposal of part of a line of busi- cilities. When the compensation for the ness, the shifting of production or mar- use of facilities is a fixed amount or is keting activities for a particular line based upon a charge per passenger, ton, of business from one location to an- car or other unit, the amount shall be other, the phasing out of a product line fairly apportioned by the operating or class of service, and other changes company among the joint facility oper- occasioned by technological improve- ating expense and income accounts. ments. If a loss is expected from the The creditor shall show the distribu- proposed sale or abandonment of a seg- tion of these charges upon its bills, and ment, the estimated loss shall be pro- such distribution shall be adhered to vided for at the measurement date (see by the debtor. Train service in connec- definition 23(b)). If a gain is expected, tion with the line haul of traffic, in- it shall be recognized when realized, cluding that operated under a joint ar- which ordinarily is the disposal date rangement for the benefit of two or (see definition 23(c)). more carriers, is not considered a joint (4) Prior period adjustments. Only the facility operation. following two items of profit and loss (d)(1) Extraordinary Items. All items of shall be accounted for and reported as profit and loss recognized during the prior period adjustments and excluded year are includable in ordinary income from the determination of net income unless evidence clearly supports their for the current period: classification as extraordinary items. (1) Correction of an error in the fi- Extraordinary items are character- nancial statements of a prior period, ized by both their unusual nature and and infrequent occurrence taking into ac- (2) Adjustments that result from re- count the environment in which the alization of income tax benefits of firm operates; they must also meet the preacquisition operating loss materiality standard. carryforwards of purchased subsidi- Unusual means the event or trans- aries. action must possess a high degree of With the exception of the two items abnormality and be of a type clearly just mentioned, all items of profit and unrelated to, or only incidentally re- loss recognized during a period shall be

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included in the determination of net NOTE: The carrier may refer to generally income for that period. accepted accounting principles for further NOTE: The carrier shall follow generally guidance in applying paragraph (d) above. accepted accounting principles where an in- [42 FR 35017, July 7, 1977 as amended at 43 FR terpretation of the rules is needed or obtain 37455, Aug. 23, 1978; 52 FR 4321, 4324, Feb. 11, an interpretation from its public accountant 1987] or the Board. (5) Accounting Changes. Errors in fi- 1–3 Records. (a) Each carrier shall nancial statements result from mathe- keep its books of account, and all other matical mistakes, mistakes in the ap- books, records, and memoranda which plication of accounting principles, or support the entries in such books of ac- oversight or misuse of facts that ex- count so as to be able to furnish read- isted at the time the financial state- ily full information as to any item in- ments were prepared. In contrast, a cluded in any account. Each entry change in an accounting estimate re- shall be supported by such detailed in- sults from new information or subse- formation as will permit ready identi- quent developments and from better in- fication, analysis, and verification of sight or judgment. Correction of an all facts relevant thereto. error should be accomplished through a (b) All expenditures including the ex- prior period adjustment [See Instruc- pense accounts of officers and employ- tion 1–2(d)(4)]. Changes in an account- ees shall be supported by vouchers, ing estimate should be accounted for in payrolls, receipted bills, canceled the period of change (and future period checks, receipts for petty cash pay- if the change affects both)(See Instruc- ments, or other evidences of the ex- tion 1–7). A change in an accounting penditures incurred. principle or accounting entity should (c) The books referred to herein in- be referred to this Board for approval. clude not only books of accounts in a The cumulative effect of a change in limited technical sense but all other accounting principle should ordinarily records such as minute books, stock be reflected in the account provided for books, reports, correspondence, memo- in determining net income. randa, etc., which will be useful in de- (6) Materiality. As a general standard veloping the history of or facts regard- an item shall be considered material ing any transaction. when it exceeds 10 percent of annual in- (d) No carrier shall destroy any come (loss) before extraordinary items. books, records, memoranda, etc., which An item may also be considered in rela- support entries to its accounts unless tion to the trend of annual earnings be- destruction is permitted by the regula- fore extraordinary items or other ap- tions governing preservation of propriate criteria. Items shall be con- records, Part 1220 of this chapter. sidered individually and not in the ag- (e) In addition to prescribed ac- gregate in determining materiality. counts, clearing accounts, temporary However, the effects of a series of re- accounts, and subdivisions of any ac- lated transactions arising from a single counts may be kept, provided the in- specific and identifiable event or plan tegrity of the prescribed accounts is of action shall be aggregated to deter- not impaired. mine materiality. (f) Cost detail shall be maintained by (7) Board Approval and Accountant’s cost centers for purposes of cost assign- Letter. Items shall be included in the ments effective 1-1-79. This provides for accounts provided for extraordinary cost control and cost planning at any items, unusual or infrequent items, dis- designated area of responsibility. These continued operations, prior period ad- cost centers shall be similarly defined justments and cumulative effect of as the railroads’ existing responsibility changes in accounting principles only centers. Cost center information shall upon approval of the Board. If the car- therefore be kept at the same level of rier retains the service of an inde- detail presently collected, categorized, pendent accountant, a request for and maintained in railroad internal using these accounts shall be accom- managerial accounting systems. This panied by a letter from the inde- detailed information shall not be re- pendent accountant approving or oth- ported to the Board on an ongoing erwise commenting on the request. basis. However, the carrier shall keep

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the detailed information to provide a operation and management of carrier ready analysis and verification of the business. Payments shall not exceed costs collected by cost center. the fair market value of goods and services acquired in an arm’s length [42 FR 35017, July 7, 1977, as amended at 52 FR 4324, Feb. 11, 1987; 61 FR 9113, Mar. 7, 1996] transaction. Any payments in excess of such just and reasonable charges shall 1–4 Accounting period. (a) Each car- be included in account 551, Miscella- rier shall keep its books on a monthly neous income charges. basis so that known transactions, as 1–7 Changes in accounting estimates. nearly as may be ascertained, shall be Changes in accounting estimate arising entered in the accounts not later than during the current year which are ap- 60 days after the last day of the period plicable to prior years shall be included for which the accounts are stated, ex- in the same account which would have cept that the time within which the been charged or credited if the item final entries for the year ending De- had been taken up or the adjustment cember 31 shall be made may be ex- made in the year to which it pertained. tended to such date in the following [See Instruction 1–2(d)(5) for Account- March as shall not interfere with the ing Changes]. preparation and filing of annual report. (b) A trial balance of the general [42 FR 35017, July 7, 1977, as amended at 52 FR 4324, Feb. 11, 1987] ledger accounts shall be prepared at the close of each month setting out the 1–8 Accounting for computer systems account number, title, and amount of and word processing costs. (a) Capital- each ledger account. (Mechanical, elec- ized costs for computer systems and tronic or automatic data processing word processing equipment shall be printout documentation producing the charged to property account 59, when equivalent of manually prepared trial such costs are not dedicated to a par- balances shall identify balances by ac- ticular function (See Account 59). Re- count numbers.) At the end of the cal- lated depreciation expenses for capital- endar year, the revenue, expense, and ized costs shall be charged to account other income accounts shall be closed 62–23–00, Depreciation, Other Equip- into retained earnings account, and the ment. balance sheet account balances shall be (b) Repair and maintenance costs re- brought forward to the general ledger lated to computer systems and word for the succeeding year. processing equipment shall be charged (c) No changes shall be made in the to function 46 of the Other equipment accounts for periods covered by quar- subactivity by appropriate natural ex- terly and annual reports that have pense (labor, material, purchased serv- been filed with the Board unless the ices, other). Repairs performed by an changes have first been authorized by outside company shall be charged to the Board. operating expense account 39–23–46. 1–5 Accrual method of accounting. (c) Operating costs related to com- The accounting for operating revenues, puter systems and word processing operating expenses, income and other equipment shall be charged to function items each month and year shall be, as 87, Management services and data and nearly as practicable, upon the basis of word processing, when the equipment accruals consistently applied. Any benefits more than one activity. When change in practice of accounting for the equipment benefits one activity accruals or any unusual accruals in- only, such operating costs shall be volving material amounts shall be re- charged to the activity/function bene- ported promptly to the Board. fited. 1–6 Charges to be just and reasonable. [52 FR 4324, Feb. 11, 1987] All charges to the accounts prescribed 1–9 Transactions with affiliated com- in this system of accounts for carrier panies. (a) The records and supporting property, operating revenues, oper- data of all transactions with affiliated ating and maintenance expenses, and companies shall be maintained in a other carrier expenses, shall be just, separate file. The types of transactions reasonable and not exceed amounts referred to in this paragraph are for necessary to the honest and efficient management services or any other type

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of services rendered, sale or use of fa- (f) Carriers reporting information on cilities or any other type of assets or a consolidated or combined basis in property. The file shall be maintained railroad Annual Report Form R–1 shall so as to enable the carrier, upon a maintain a file with appropriate Board request, to furnish accurate in- records and supporting data. This shall formation with supporting documenta- include work sheets showing revenues, tion about particular transactions expenses, earnings, investment in as- within 15 days of the request. We do sets and accumulated depreciation for not intend the file to include data re- all affiliated railroads and rail-related lating to ordinary carrier operations affiliated companies. The work sheets (e.g. lawful tariff charges or inter- shall also disclose any eliminations. change of equipment). Carriers shall also disclose the method- (b) Each bill rendered by an affiliated ology used to support segregation of company shall state specifically the rail-related or other items as appro- basis used for determining charges, un- priate. Further, a file shall be main- less the file contains the information tained to support and reconcile entity to support the specific basis for sales, transfers and reclassifications as charges. well as taxes deducted from gains or (c) Punched cards, magnetic tapes, losses. discs, or other machine-sensible devices used for recording, consolidating, [42 FR 35017, July 7, 1977, as amended at 53 and summarizing accounting trans- FR 46620, Nov. 18, 1988] actions and records with a carrier’s 1–10 Accounting for income taxes. (a) electronic or automatic data proc- The interperiod tax allocation method essing system may constitute a file of accounting shall be applied where within the meaning of this instruction. material timing differences (see defini- (d) The carrier shall record, as the tion 17(e)) occur between pretax ac- cost of assets or services received from counting income and taxable income. an affiliated supplier, the invoice price Carriers may elect, as provided by the (plus any incidental costs related to Revenue Act of 1971, to account for the those transactions) in those cases investment tax credit by either the where the invoice price can be deter- flow through method or the deferred mined from a prevailing price list of method of accounting. See paragraphs the affiliated supplier available to the (d) and (e) below. All income taxes general public in the normal course of (Federal, state and other) currently business. If no such price list exists, accruable for income tax return pur- the charges shall be recorded at the lower of their cost to the originating poses shall be charged to account 556, affiliated supplier (less all applicable Income taxes on ordinary income, and ac- valuation reserves in case of asset count 590, Income Taxes on Extraor- sales, or their estimated fair market dinary Items, as applicable. value determined on the basis of a rep- (b) Under the interperiod tax alloca- resentative study of similar competi- tion method of accounting the tax ef- tive and arm’s-length or bargained fect of timing differences (see defini- transaction. Any difference between tion 17) originating in the current ac- actual transaction price and the above, counting period are allocated to in- as well as charges that are not trans- come tax expense of future periods portation related, shall be considered when the timing differences reverse. of a financing nature and shall be re- Similar timing differences originating corded, accordingly, as nonoperating and reversing in the current account- charges or credits. (See instruction 1– ing period should be combined into 6.) groups and the current tax rates ap- (e) Nothing contained herein shall be plied to determine the tax effect of construed as restraining the carrier each group. A carrier shall not apply from subdividing accounts (see instruc- other than current tax rates in deter- tion I–3(e)) for the purpose of recording mining the tax effect of reversing dif- separately transactions with affiliated ferences except upon approval of the companies. Board. When determining the amount

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of deferred taxes, rather than coming income) based on accounting in- puting state and other taxes individ- come. ually by jurisdiction, the Federal in- (e) Carriers electing to account for come tax rate may be increased by a the investment tax credit by the de- percent equivalent to the effect of ferred method shall concurrently with taxes imposed by the jurisdictions. In making the entries prescribed in (d) classifying a deferred charge or credit above charge account 557, Provision for as current or noncurrent a carrier shall deferred taxes, or account 591, Provision follow the classification criteria used for deferred taxes—extraordinary item, as for the related asset or liability which applicable, and shall credit account 786, caused the timing difference. A de- Accumulated deferred income tax credits, ferred charge or credit that is not re- with the investment tax credit utilized lated to an asset or liability because as a reduction of the current year’s tax (a) there is no associated asset or li- liability but deferred for accounting ability or (b) reduction of an associated purposes. The investment tax credit so asset or liability will not cause the deferred shall be amortized by credits timing difference to reverse shall be to account 557, Provision for deferred classified based on the expected rever- taxes. sal date of the specific timing difference. Such classification disregards NOTE A: Any change in practice of account- any additional timing differences that ing for the investment tax credit shall be re- may arise and is based on the criteria ported promptly to the Board. Carriers desir- used for classifying other assets and li- ing to clear deferred investment tax credits abilities. because of a change from the deferral method to the flow though method shall submit (c) The future tax benefits of loss the proposed journal entry to the Board for carryforwards shall normally be recog- consideration and advice. nized in the year in which such loss is NOTE B: The carrier shall follow generally applied to reduce taxes. Only in those accepted accounting principles where an in- unusual instances when realization is terpretation of the accounting rules for in- assured beyond any reasonable doubt come taxes is needed or obtain an interpreta- should the future tax benefits of loss tion from its public accountant or the Board. carryforwards be recognized in the year [42 FR 35017, July 7, 1977, as amended at 47 of loss. The tax effects of any realizable FR 12350, Mar. 23, 1982; 52 FR 4321, Feb. 11, loss carrybacks shall be recognized in 1987; 67 FR 57533, Sept. 11, 2002] the determination of net income (loss) of the loss periods; appropriate adjust- 1–11 Items in texts of accounts. The ments of existing net deferred tax cred- items appearing in the texts of the ac- its may also be necessary in the loss counts or elsewhere herein are for the period. purpose of more clearly indicating the (d) Carriers electing to account for application of the prescribed account- the investment tax credit by the flow ing. The items are intended to be rep- through method shall credit account resentative, but not exhaustive. The 556 Income taxes on ordinary income, or appearance of an item in the text of a account 590, Income taxes on extraor- primary account warrants the inclu- dinary items, as applicable, and charge sion of the item in the account men- account 760, Federal income taxes ac- tioned only when the whole text also crued, with the amount of investment indicates inclusion inasmuch as the tax credit utilized in the current ac- same item frequently appears in more counting period. When the flow than one primary account. The proper through method is followed for the in- entry in each instance must be deter- vestment tax credit, account 557, Provi- mined by the entire text of each pri- sion for Deferred Taxes, shall reflect the mary account. difference between the tax payable 1–12 Distribution of pay and expenses (after recognition of allowable invest- of employees. (a) The pay and expenses ment tax credit) based on taxable in- of officers or employees regularly as- come and tax expense (with full rec- signed to specific duties who perform ognition of investment tax credit that incidental services of a different nature would be allowable based on account-

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involving small expense may be in- 1–14 Submission of questions. To cluded in the appropriate expense ac- maintain uniformity of accounting, counts for the duties to which such of- carriers shall submit questions of ficers or employees are regularly as- doubtful interpretation to the Board signed. for consideration and decision. (b) When it is necessary to apportion 1–15 Transfers from government au- the pay of officers and employees thorities. When a Federal, State, or mu- among various accounts, the carrier nicipal government transfers cash or shall apportion the pay on the basis of other assets to a railroad, the trans- the directly assignable pay to the var- action shall be accounted for in accord- ious accounts. ance with the provisions set forth hereunder. 1–13 Payroll related expenses. (a) (a) The following forms of govern- Fringe benefits (account series 12–00– ment transfers shall be included in ac- 00) distributed to the activities using count 502, Railway Operating Revenues— one of the following techniques (in Transfers from Government Authorities order of preference): for Current Operations when received: (1) Apply appropriate factors to the (1) Payments as reimbursement for total of the fringe expense account, in operating losses sustained on a specific such a way as to distribute an equi- line, or in a certain region. Examples table proportion of cost to each activ- include support of commuter oper- ity. These factors shall be developed to ations of a railroad, and local rail serv- take into account variables such as the ice assistance subsidies granted to a following: railroad under authority of the Rail- (i) The effect of seniority on the ex- road Revitalization and Regulatory Re- pense. For example, profit sharing or form Act of 1976; pensions may be available to only cer- (2) Subsidies designated by the donor tain categories of employees, which to offset operating expenses of the rail- may be more predominant in one activ- road, and ity than another. (3) Subsidies which may be applied at (ii) The effect of the type of work the discretion of the recipient to oper- performed. For example, workmen’s ating expenses and/or operating prop- compensation expense may vary for erty. each category of employees because of (b) Government transfers relating to the rate charged or the claims experi- the acquisition, addition to, or im- ence of the category. provement of depreciable operating (iii) Any other variable which may property shall be included in account have an appreciable effect on the eq- 783, Deferred Revenues—Transfers from uity of the apportionment. Government Authorities when received. (2) Distribute the amount in the Account 783 shall be periodically same proportion as the pay charged to charged, and account 503, Railway Oper- each activity in account series 11–00–00 ating Revenues—Amortization of Deferred (salaries and wages). Transfers from Government Authorities (3) Distribute the amounts using any shall be credited with amounts equal to other equitable basis which the carrier the depreciation costs of the assets to can substantiate. which they apply. (b) All carriers shall be prepared to (c) Government transfers in the form describe the basis of apportionment of, or designated for the purchase of used to distribute expenses included in nondepreciable operating property this instruction. shall be included in account 796, Other (c) Any carrier which finds it imprac- Capital Surplus in the manner described ticable to distribute expenses as re- in the text of that account. quired by this instruction should fur- (d)(1) Transfers from the Federal nish the Board with full particulars of Government to Amtrak and ConRail the conditions which prevent the prop- relating to the acquisitions, addition er distribution. Upon receipt of such to, or improvement of depreciable or information carrier will be advised of nondepreciable operating property the procedure to be followed. shall be included in account 796 in the

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manner described in the text of that must be adequately supported. Exam- account. ples of this type of activity include the (2) Transfers from the Federal Gov- following: ernment to Amtrak and ConRail other (1) Salespersons’ salaries and travel than those described in paragraph (d)(1) expenses, advertising, promotional and shall be accounted for in accordance educational material; with paragraph (a) of this section. (2) The conduct of shipper sympo- (e) The provisions of this section do siums, conferences, meetings and traf- not apply to the following forms of fic related functions; government transfers: (3) The use of direct mail solicita- (1) Government contributions in con- tions and the publication and distribu- nection with construction projects in tion of routing guides and service di- which government agencies and rail- rectories; roads participate. Transfers of this (4) Incidental promotional materials type shall be accounted for in accord- such as road atlases, calendars, pens, ance with the provisions of instruction scratchpads, and other materials of 2–17. Paragraph (b) of that instruction nominal value; lists applicable construction projects. (5) The conduct of business oriented (2) Government payment for specific lunches and dinners, public affairs pro- services rendered by the carrier in gramming, conferences and customer transporting property or persons by service calls; rail line other than services described (6) Sponsoring sales promotion func- in paragraph (a)(1) of this section. Such tions, involving a number of customers payments shall be included in account or potential customers. 501, Railway Operating Revenues (Exclu- sive of Transfers from Government Au- It must be noted that an activity listed thorities). above is not to be automatically ac- (3) Government transfers relating to counted for as an operating expense. A other than carrier operations. carrier must be able to justify that an activity was primarily sales or mar- (4) Government transfers in exchange keting related. for debt and/or equity securities of re- cipients. (b) Business entertainment expenses (f) Government transfers shall gen- are to be accounted for as non-oper- erally be recorded when made available ating expenses when they cannot be to the railroad. However, transfers re- shown to be related to the sales or lating to specific operations shall be marketing activity. These are expenses recorded as earned. that are primarily related to recre- (g) Government transfers in the form ation or to the convenience and com- of assets other than cash shall be re- fort of the individuals rather than to corded at fair value when received. the transaction of business. Examples of this type of activity include the fol- [43 FR 30558, July 17, 1978, as amended at 52 lowing: FR 4321, Feb. 11, 1987] (1) Recreational or resort entertain- 1–16 Business entertainment expenses. ment, including but not limited to, (a) Business entertainment expenses fishing, hunting, tennis, golfing, skiing are to be accounted for as operating ex- or other sporting or recreational trips penses when incurred in conjunction or outings; with sales or marketing related activi- (2) Expense paid transportation in ties. Sales or marketing related activi- any carrier owned, leased or furnished ties are those that emphasize a car- vehicles, planes, helicopters, boats, rier’s ability to provide efficient, time- yachts, or other methods; ly and competitive service. These ac- (3) Expense paid lodging in any car- tivities include outlays designed to rier owned, leased or furnished motels, promote new business as well as out- hotels, apartments, condominiums, lays incurred in maintaining existing lodges, rooms and other places of over- business. The entertainment expendi- night accommodation; tures must be reasonable in relation to (4) Paid admission to any sporting, the business conducted and the busi- cultural, educational, recreational, or ness purpose for the entertainment entertaining occurrence or event;

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(5) Gifts such as athletic equipment, to be paid. Where the fair market value food or liquor, beverages of all types, of resources given up (assets, services smoking materials, clothing and per- or items of stockholder’s equity) is not sonal accessories; clearly determinable, the cost may be (6) The furnishing of lunches, din- determined by the fair market value of ners, appetizers or beverages where the resources acquired. The carrier there is no true business purpose; shall be prepared to furnish the Board (7) Social occasions such as holiday with the particulars of its method of parties. determining cash value when the con- It must be noted that an activity listed sideration is other than monetary. The above is not to be automatically ac- amount of liabilities incurred with sup- counted for as a non-operating expense. pliers in the normal course of business, If a carrier can justify that the activ- which are due in customary trade ity was primarily sales or marketing terms not exceeding approximately one related, it may be accounted for as an year, shall be recorded at the maturity operating expense. value. Acquisition date is the date title NOTE: The examples listed above are not passes to the carrier. inclusive, but are intended as a guide to give (b) The cost of road and equipment carriers an indication of what will or will purchased under a plan involving other not be permitted to be recovered through the deferred payments (debt or capital rate structure. In all instances the burden of lease) shall be recorded at the dis- proof will fall on the carrier involved. counted present value of the payment, [47 FR 9467, Mar. 5, 1982, as amended at 52 FR net of executory costs such as insur- 4321, Feb. 11, 1987] ance, maintenance, and taxes. The in- 1–17 Disclosure guideline. In addition terest rate used to discount the pay- to the accounting policies presented in ments should be the prevailing market these regulations, all disclosures relat- rate for similar debt instruments of ing to APB Opinions and FASB State- issues with similar credit ratings. In ments adopted by the Board are re- any event, the rate used for valuation quired. purposes will normally be at least equal to the rate at which the carrier [52 FR 4324, Feb. 11, 1987] can obtain financing of a similar na- 1–18 Distribution of expenses for mate- ture from other sources at the date of rial, tools, fuel, lubricants, purchased the transaction (the carrier’s incre- services and general. (a) These expenses mental borrowing rate). In the case of shall be assigned directly to activities a capital lease, when it is practical to based on usage whenever possible. ascertain the implicit rate computed (b) When it is necessary to apportion by the lessor, and that rate is less than these expenses to two or more activi- the carrier’s incremental borrowing ties they shall be equitably appor- rate, the carrier should use the im- tioned only to the activities in which plicit rate. Acquisition date for a cap- they are actually used or to the activi- ital lease is the date the lease agree- ties they support. ment is signed. If the property covered [67 FR 57533, Sept. 11, 2002] by the lease has yet to be constructed or has not been acquired by the lessor INSTRUCTIONS FOR PROPERTY at the date the lease agreement or ACCOUNTS commitment is signed, the acquisition date shall be the date the property 2–1 Items to be charged. (a) To the under construction is completed or the road and equipment property accounts date the property not yet acquired is shall be charged the cost of purchasing acquired by the lessor. (See Instruction land, the cost of purchasing and con- 2–20.) structing buildings, facilities and (c) Where actually incurred, interest equipment, and the cost of additions cost is to be added to the cost of road and betterments to property, Cost and equipment deemed qualifying assets means the amount of cash disbursed, or during the period of time required to the fair value of other assets distrib- get them ready for their intended use uted, or the present value of amounts (acquisition period). Qualifying assets

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are those that are (1) either con- any gain on the transaction but shall structed or otherwise produced for a record the road and equipment received carrier’s own use (including assets con- at the amount of the monetary consid- structed or produced for the carrier by eration paid plus the recorded costs of others for which deposits or progress the road and equipment surrendered. If payments have been made) or (2) assets a loss is indicated by the terms of an intended for sale or lease that are con- exchange transaction, the carrier shall structed or otherwise produced as dis- recognize the entire loss on the ex- crete projects. The amount of interest change. Immaterial gains and losses on to be capitalized for qualifying assets these exchanges shall be included in shall be based upon the average account 519, Miscellaneous Income, or amount of accumulated expenditures 551, Miscellaneous Income Charges, as for the asset during the acquisition pe- appropriate. Material amounts shall be riod at the rate used on specific new recorded in accordance with Instruc- borrowings associated with the quali- tion 1–2(d). fying asset. If average accumulated ex- [52 FR 4324, Feb. 11, 1987] penditures for the asset exceed the amount of specific new borrowings as- 2–2 Minimum rule applicable to addi- sociated with the asset, the rate to be tions to property. An exception to the applied to such excess shall be a rule in Instruction 2–1 is that when the weighted average of the rates applica- cost of acquisition of units of road ble to other borrowings of the enter- property and of additions to existing prise. The total amount of interest cost units of road property (other than land capitalized in an accounting period and tracks) is less than $5,000, such shall not exceed the total amount of costs may be charged to operating ex- interest cost incurred by the enterprise penses. This amount (rounded to the during that period. nearest $100) will be adjusted by the (d) Suitable records shall be main- June Producer Price Index for all com- tained showing expenditures during the modities when an aggregate adjust- year for original road and equipment ment is $500 or more. The revision will and road extensions; for merger and be published in the Federal Register purchase of existing lines and reorga- and be effective as of January 1 of the nizations; for additions and better- following year. The carrier shall not ments; and credits for property retire- parcel expenditures under a general ment. plan bringing the accounting for such (e) When the carrier exchanges road expenditures within this minimum and equipment for other road and rule. An amount of less than the cur- equipment with no other consideration rent minimum capitalization level, for involved, the road and equipment re- the railroad as a whole or for indi- ceived shall be recorded at the ledger vidual property accounts may be value of the road and equipment relin- adopted for purposes of this rule pro- quished. Where the carrier receives a vided the carrier first notifies the monetary consideration in the ex- Board of the amount it proposes to change, the carrier shall recognize gain adopt and thereafter makes no change on the exchange to the extent that the in the amount unless authorized by the consideration received exceeds a pro- Board. An amount adopted shall be ad- portionate share of the recorded cost of hered to in reporting property changes the road and equipment surrendered. for valuation purposes. The portion of the cost applicable to [55 FR 42016, Oct. 17, 1990] the realized amount shall be based on the ratio of the monetary consider- 2–3 Land. (a) Accounts are provided ation to the total consideration re- for the cost of land used in transpor- ceived (monetary consideration plus tation operations and also for land the estimate fair value of the road and used in other than transportation oper- equipment received) or, if more clearly ations. When land is retired from evident, the fair value of the road and transportation operations but is re- equipment transferred. Where the car- tained by the carrier the original cost rier pays a monetary consideration in (estimated, if not known) shall be the exchange, it shall not recognize transferred to the account prescribed

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for property used in other than trans- 2–5 Equipment. Accounts are pro- portation operations. It is not con- vided for several classes of equipment, templated that irregular parcels of such as locomotives, passenger-train land acquired in connection with acqui- cars, freight-train cars, highway rev- sition of right-of-way which have no enue equipment, work equipment, value as commercial property shall be floating equipment, and the necessary thus transferred, either for the purpose appurtenance, furniture, and fixtures of making right-of-way boundaries run first to equip for service, including the more or less regular or for the purpose cost of inspection, setting up, and try- of eliminating from transportation ing out, and transportation over for- property account the cost of unoccu- eign lines; also the cost of additions pied lands between tracks in yards and and betterments, such as improved ap- terminals. When any land, the cost of pliances, parts, or appurtenances. which is included in the accounts, is When retired equipment is held with- sold or otherwise retired, the ledger out being torn down, the estimated value shall be credited to the appro- value of the salvage therefrom shall be priate property investment account. included in account 741, Other assets, The profit or loss from sale or loss until the salvage is recovered, except from retirement or land shall be in- that the estimated scrap value of re- cluded in the accounts prescribed for tired equipment held for sale in the or- such amounts. dinary course of business, and on which (b) [Reserved] sale and realization of the proceeds within one year is assured, is includ- [42 FR 35017, July 7, 1977, as amended at 52 able in account 713, Other current assets. FR 4324, Feb. 11, 1987] 2–6 Components of construction cost. 2–4 Structures. Accounts are pro- The cost of constructing property in- vided for the cost of several classes of cludable in the property accounts shall buildings and facilities, including fix- include the direct and other costs as tures permanently attached to and described hereunder. made a part thereof. When a building (a) Cost of labor. This includes the or other structure is used or held pri- amount paid for labor expended by the marily for transportation operations carrier’s own employees, including the and is an integral part of the carrier’s cost of labor expended for preliminary transportation plant, but a part there- work, such as sinking test holes or of is used or held for commercial pur- making soundings for tunnels, grading, poses such as for rental to others or for buildings, and other structures; and use in other than transportation oper- cost of labor expended in laying and ations by the carrier, the entire cost of taking up tracks for temporary use in the building or other structure is in- construction, except the cost of labor cludable in the accounts for transpor- expended on tracks provided for the tation property. When a building or protection of traffic during the other structure is used or held pri- progress of addition and betterment marily for commercial purposes or for work. The cost of labor shall also in- use in other than transportation oper- clude the accounting company’s ex- ations by the carrier, the entire cost of penditures for associated fringe bene- the building or structure is includable fits, such as vacation and holiday pay, in account 737, Property used in other health and welfare group insurance, than carrier operations. Reclassification pensions and retirement plans, payroll of property from its primary classifica- taxes and unemployment insurance. Of- tion as transportation or other than fice expenses and traveling and other transportation property, as the case personal expenses of employees, when may be, to the other classification is borne by the carrier, shall be consid- not required where changes in use are ered a part of the cost of the labor, as of a temporary nature or for a short pe- shall also the cost of fidelity bonds and riod of time. The accounting for costs employer’s liability insurance pre- of maintenance, taxes, other operating miums. When officers or employees are costs, and for revenues and rentals especially assigned to construction shall be consistent with the classifica- work their pay and their traveling and tion of the building or other structure. incidental expenses while thus engaged

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shall be included in the cost of the (e) Cost of transportation. This in- work. No charge shall be made against cludes the amounts paid to other com- road and equipment accounts for the panies or individuals for the transpor- pay of officers and employees who tation of men, materials and supplies, merely render services incidentally in special machine outfits, appliances, connection with extensions, additions, and tools in connection with construc- or betterments, although traveling and tion. Freight charges paid foreign lines incidental expenses incurred by such for the transportation of construction officers and employees solely on ac- material to the carrier’s line shall be count of such work shall be included in included, so far as practicable, as a the account to which the cost of the part of the cost of the material. work is chargeable. (f) Cost of contract work. This includes (b) Cost of materials and supplies. This amounts paid for work performed includes the purchase price of mate- under contract by other companies, rials and supplies, including small firms, or individuals, and costs inci- tools, at the point of free delivery plus dent to the award of the contract. the cost of inspection and loading as- (g) Cost of protection from casualties. sumed by the carrier; a suitable pro- This includes expenditures for protec- portion of store expenses; also sales tion against fire, such as payments for and excise taxes on materials and sup- discovery or extinguishment of fires, plies except as otherwise provided in cost of detecting and prosecuting in- the text of account 712, Material and cendiaries, witness fees in relation supplies. In calculating the cost of ma- thereto, amounts paid to municipal terials used, proper allowance shall be corporations and other for fire protec- made for the value of unused portions tion, and other analogous items of ex- and of cuttings, turnings, borings, etc.; penditure incurred directly in connec- for the value of the material recovered tion with construction work. from temporary tracks, scaffolding, (h) Cost of injuries and damages. This cofferdams, and other temporary struc- includes expenditures on account of in- tures used in construction; and for the juries to persons or damage to property value of small tools recovered and used when incurred directly as a result of for other purposes. construction projects, and shall be in- (c) Cost of work-train service. This included in the cost of the work in con- cludes amounts paid to others for rent nection with which the injury or dam- and maintenance of equipment used; age occurs. It also includes that por- cost of labor of enginemen, trainmen, tion of premiums paid for insuring and enginehousemen, including wages property applicable to the period prior of engine crews and train crews held in to the completion or coming into serv- readiness for such service; and cost of ice of the property insured. Insurance fuel and other supplies consumed in recovered on account of compensation connection with the operation of work paid for injuries to persons incident to trains. It shall also include the cost of construction shall be credited to the maintaining the carrier’s own equip- accounts to which such compensation ment used in construction service. is charged, and insurance recovered on Amounts representing constructive account of damages to property inci- rent or return upon the investment in dent to construction shall be credited owned equipment shall not be included to the accounts chargeable with the ex- as a part of the cost of work-train serv- penditures necessary for restoring the ice. damaged property. The cost of injuries (d) Cost of special machine service. This and damages incident to the removal of includes the cost of labor expended and old structures, or parts thereof, shall of materials and supplies consumed in be charged to operating expenses, ex- maintaining and operating power shov- cept that such costs in connection with els, scrapers, rail unloaders, ballast the removal of old structures which are unloaders, pile drivers, dredges, incumberances on newly acquired lands ditchers, weed burners, and other shall be included in accounts 2, Land labor-saving machines; also rents paid for transportation purposes, or 3, Grad- for use of such machines. ing, as appropriate.

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(i) Cost of privileges. This includes these accounts concurrently with the compensation for temporary privileges, retirement accounting. Unless provided such as the use of public property or for otherwise, interest costs shall be streets, in connection with the con- capitalized in accordance with gen- struction of the property of the carrier. erally accepted accounting principles. (j) Material excavated. The cost of dis- (d) When retired property is held and posing of material excavated in con- not removed, the estimated value of nection with construction shall be con- the salvage therefrom shall be included sidered as a part of the cost of work, in account 741, Other assets, until the except that when such material is used salvage is recovered, except that the for filling, the cost of removal and estimated scrap value of retired prop- dumping shall be equitably appor- erty held for sale in the ordinary tioned between the work in connection course of business, and on which sale with which the removal occurs and the and realization of the proceeds within work in connection with which the ma- one year is assured, is includible in ac- terial is used. count 713, Other current assets. (k) Interest cost. [See Instruction 2– (e) The accounting for track addi- 1(c)]. tions and retirements (with and without replacement) shall be guided by In- [42 FR 35017, July 7, 1977, as amended at 52 struction 2–10. FR 4325, Feb. 11, 1987] 2–7 Additions to and retirements of [42 FR 35017, July 7, 1977, as amended at 46 FR 10920, Feb. 5, 1981; 48 FR 7183, Feb. 18, property—General. (a) In accounting for 1983; 49 FR 2254, Jan. 19, 1984; 52 FR 4321, Feb. additions to and retirements and re- 11, 1987] placements of road and equipment property (excluding land) used in trans- 2–8 Additions to and retirements of portation operations, such property units of property. (a) When a unit of changes shall be considered as con- road or equipment property is added to the plant, the cost thereof shall be in- sisting of: (1) Units of property, and (2) cluded in the appropriate primary ac- other than units of property as pre- count. When a unit of property is re- scribed in Instruction 2–19. Track prop- tired, with or without replacement, the erty changes will be distinguished by cost thereof shall be written out of the units of property as approved by the property account at time of retire- Commission. ment. (b) The cost of removal of retired (b) When a unit of road or equipment property, both depreciable and other property (or a minor item not replaced) than depreciable, when borne by the classified as depreciable and included carrier, shall be charged, as appro- in the accounts prescribed for depre- priate, to account 11–13–39, Personnel— ciable property is retired the service Salaries and Wages—Way and Struc- value shall be charged to account 735, tures—Other—Dismantling retired prop- Accumulated depreciation; Road and erty, or 11–23–39. Personnel—Salaries and equipment property. Wages—Equipment—Other Equipment— (c) When road property (other than a Dismantling retired property, and other minor item constituting repairs) clas- appropriate accounts (including sub- sified as other than depreciable prop- 1 activities 11 and 12). erty is retired, the cost thereof shall be (c) An equitable proportion of a bal- cleared from the property account and ance in property accounts 76, Interest the service value shall be charged to During Construction, and 80, Other ele- account 61–13–99, General—Other Ex- ments of investment, applicable to re- penses—Way and Structures—Other— tired property shall be cleared from Other. When the retirement requires Board approval, the carrier shall clear 1 The references to solely related freight the cost from the property account operating expense activity/subactivity num- upon the effective date of the abandon- bers and titles used throughout the system ment. Subactivities 11 and 12 also are for convenience and brevity. Refer to the specific account texts to determine the ap- apply. propriate solely related passenger and/or (d) When property included in the de- common expense activity/subactivity num- preciable accounts but excluded from bers. the depreciation base is retired, the

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service value (including engineering (d) Track investment written out of expenditures assignable to retired the accounts shall be at original cost property but not included in the depre- or estimated standard or average cost ciation base) shall be charged to oper- for that density category. Material to ating expense. be reused shall be put in an investment 2–9 Additions and retirements of other pool at unrecovered cost and, when re- than units of property. (a) When an item used, included in the appropriate den- of road or equipment property, other sity category at the average cost of the than a complete unit, is added to the investment pool. plant and the addition is not a replace- [48 FR 7183, Feb. 18, 1983] ment, the cost thereof shall be accounted for in the same manner as an 2–11 Expenses in connection with addi- addition of a complete unit of property, tions and betterments. The cost of re- subject to the minimum rule applicable moving old material from equipment to road property (see Instruction 2–2). and from buildings, bridges, wharves, When an item of property other than a tracks, and other fixed improvements, complete unit (minor item) is replaced, shall be charged to the appropriate op- independent of the complete unit of erating expense accounts. Such charges which it is a part, the cost of replace- shall include the cost of removing old ment shall be treated as maintenance foundations and filling old excavations, and charged to operating expenses. If and restoring condition of grounds the replacement constitutes an im- after addition and betterment work; provement then the cost of replace- and maintaining or protecting traffic ment should be accounted for as a re- during the progress of addition and bet- building expenditure under Instruction terment work, including the cost of 2–12. constructing, maintaining, and removing temporary tracks required for (b) When second-hand property ac- maintaining traffic during the progress quired is in such physical condition of the work. that it is necessary to rehabilitate the property to bring it up to the standard [42 FR 35017, July 7, 1977. Redesignated at 48 required by the carrier, the cost of FR 7183, Feb. 18, 1983] such rehabilitation shall be included in 2–12 Units of property rebuilt or con- the appropriate account for the prop- verted—(a) Rebuilding expenditures. Car- erty. riers shall be governed by the following [42 FR 35017, July 7, 1977, as amended at 55 provisions when determining and ac- FR 42016, Oct. 17, 1990] counting for depreciable road and equipment property rebuilding expend- 2–10 Additions to and retirements of itures: track. (1) Rebuilding expenditures are those (a) When track or its components are cost actually incurred which substan- added to the plant, the cost shall be in- tially extend the service life or sub- cluded in the track primary account. stantially increase the utility of depre- When track components are replaced as ciable road and equipment property. part of a track replacement program, The rebuilding expenditures shall be the replacement cost shall be ac- material in nature relative to the cur- counted for as an addition to the track rent replacement cost of a similar new property account. The cost of track unit of road or equipment property. Ex- components which are retired with or penses resulting from delayed mainte- without replacement shall be written nance and repairs shall not be consid- out of the track property account at ered in determining materiality. the time of retirement. (2) The phrase extend the service life (b) When track is retired the service means to extend the life of a property value (ledger value less net salvage) unit past its estimated service life. shall be charged to account 735, Accu- (3) The term increased utility means mulated depreciation; Road and equip- that the road or equipment property ment property. has become more useful, more effi- (c) All repairs of tracks shall be ac- cient, more durable, or has greater ca- counted for as operating expenses. pacity.

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(4) Rebuilt or converted road or part of the line so changed shall be equipment property shall be accounted considered property retired and its for as an addition to the appropriate ledger value credited to the property property accounts, with the old units accounts. The new line of road, includ- accounted for as retired from service. ing land, grading, ballast, track ele- The charge to the appropriate property ments, and other transportation facili- accounts shall be composed of (i) the ties serving the road shall be consid- cost (estimated if necessary) less a fair ered an addition and the cost charged allowance for depreciation, or salvage to the property accounts. The cost of value, whichever is lower, of the parts track changes which do not involve reused, (ii) the cost of labor expended change in the existing roadbed shall be in rebuilding or in the conversion proc- charged to operating expenses, even ess, (iii) the cost of additional mate- though the tracks may be dismantled rials applied, and (iv) any other ex- in the process, but the resulting track penses incurred directly with the re- extensions or reductions shall be ac- building or conversion. In no case shall counted for as additions or retirements the total amount charged to the prop- as appropriate. erty accounts for these units exceed (b) The cost of shifting or rear- the current replacement costs of simi- ranging tracks within a yard shall be lar new units that would be used for charged to operating expenses, even the same purpose. When a unit of road though the tracks may be dismantled property or equipment is transferred in the process, but resulting increases from one class of service to another, or decreases in grading, ballast, or with or without physical conversion, track length shall be accounted for as the unit shall be accounted for as re- additions or retirements, as appro- tired from its original account and be priate. Where tracks in whole or in recorded in a primary investment ac- part within a yard are determined to be count appropriate to its new class of no longer permanently used, the ledger service. value of such tracks shall be elimi- (5) If it is necessary to repair the sec- nated from the property account. If ondhand or reused parts remaining in a yard tracks and facilities are con- rebuilt unit, the repair cost may be structed in another location to take added to the value assigned parts in de- the place of tracks retired, such tracks termining the related cost to be cap- and facilities shall be accounted for as italized. Associated dismantling costs additions and the cost thereof shall be shall be included in operating expenses. included in the property account. (b) Repair expenses. Expenses pertaining to road and equipment prop- [48 FR 7183, Feb. 18, 1983] erty, which represent normal or de- 2–14 Track connections. (a) When the layed repairs and maintenance, shall be accounting carrier bears the construc- expensed in the year incurred. tion cost of a connecting track situ- (c) Carriers shall File and Storage. ated on the property of another carrier, keep records of each rebuilding pro- but acquires the salvage rights to the gram readily available. These records track, the cost of the track construc- shall be provided to representatives of tion shall be charged to account 731, the Board when requested. The reten- Road and equipment property. tion period shall be as required by 49 (b) When carriers (1) share the cost of CFR part 1220, Preservation of Records. constructing a connecting track of [44 FR 67426, Nov. 26, 1979. Redesignated at 48 which a portion is situated on each car- FR 7183, Feb. 18, 1983, and amended at 52 FR rier’s right-of-way, and (2) own and ob- 4321, Feb. 11, 1987] tain the salvage rights to the track 2–13 Changes in line of road and relo- segment located on their respective cation of yard tracks. properties, the construction cost borne (a) When changes are made in a line by each carrier shall be charged to ac- of road for the purpose of reducing count 731, Road and equipment property. curves or grades, or to eliminate (c) The cost of constructing a track bridges, tunnels, tracks in the installa- connection on the right-of-way of an- tion of a centralized traffic control sys- other carrier which acquires the owner- tem, or other physical features, the ship of and salvage rights to the track,

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shall be charged by the carrier bearing at the amounts shown in the accounts such cost to accounts 37–11–00, Pur- of predecessor companies, adjusted as chased service—Joint facility—Debit— may be necessary to conform with the Way and Structures—Running, or 37–12– accounting rules of the Board. Such ad- 00, Purchased services—Joint facility— justments shall be included in retained Debit—Way and Structures—Switching. earnings or the other accounts that The owner carrier shall charge the would have been appropriate had the amount of the construction cost to ac- adjustments been made in the books of count 731, Road and equipment—prop- account of the predecessor company. erty, with contra credit to accounts 38– (2) When the total par or the stated 11–00, Purchases services—Joint facility— value of no par capital stock issued or Credit—Way and Structures—Running, outstanding pursuant to the pooling of or 38–12–00, Purchases services—Joint fa- interests is more than the aggregate cility—Credit—Way and Structures— amount of the capital stock of the sep- Switching. Material amounts for such arate companies before such pooling of costs shall be referred to the Board for consideration and decision. interests, the excess shall be charged (d) The cost of constructing a side to account 795, Other capital, if unre- track under a deposit refund agreement stricted capital is available for such shall be charged to account 731, Road purpose; otherwise, the excess shall be and equipment property. The deposit charged to retained earnings. shall be credited to account 782, Other (3) When the total par or stated value liabilities. Deposit amounts refunded of no par capital stock issued or out- during the agreement period shall be standing pursuant to the pooling of in- charged to account 782, Other liabilities. terests is less than aggregate amount Upon termination of the agreement, of the capital stock of the separate the amount of any unrefunded deposit companies before such pooling of inter- shall be credited to the applicable pri- ests, the difference for reduction in mary property accounts on an equi- capital stock shall be credited to ac- table basis. count 795, Other capital. 2–15 Merger, consolidation, and pur- (c) Purchase: chase of a railway operating entity or sys- (1) When the acquisition results from tem. (a) When a railway or portion a purchase (except from subsidiaries thereof constituting an operating unit controlled through ownership of the or system is acquired by merger or con- majority share of voting stock) includ- solidation in a pooling of interests or ing mergers or consolidations other by purchase the cost of acquisition rep- than pooling of interests, the amount resented by cash, capital stock or other includible in account 731, Road and securities issued or assumed, liabilities equipment property, shall be the cost at assumed, and other consideration, shall the date of acquisition to the purchaser be recorded in the accounts in the man- of the transportation property ac- ner stated hereunder. Separate instructions are provided for a merger of sub- quired. The cost assigned the property, sidiaries. as well as other assets acquired, shall (b) Pooling of interests: be the amount of the cost consider- (1) When the acquisition results from ation given. Where property and other a merger or consolidation constituting assets are acquired for other than cash, a pooling of interests, in which all or including liabilities assumed and substantially all of the equity interest shares of stock issued, cost shall be de- in predecessor companies continue, as termined by either the fair value of the such, in a surviving company or a new consideration given or the fair value of company created for the purpose, the the assets acquired, whichever is more road and equipment, the other assets, clearly evident. In addition to any li- and the liabilities of the predecessor abilities assumed, provision shall be companies, together with the balances made for such estimated liabilities as in the accumulated amortization and may be necessary. depreciation accounts and the retained (2) When the costs of individual units earnings accounts shall be recorded in or classes of transportation property the appropriate balance sheet accounts are not specified in the agreement, the

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cost assigned such property shall be ap- counts shall be recorded at cost as portioned among the appropriate pri- shown in the predecessor companies’ mary accounts using the percentage re- accounts except as otherwise provided lationship between the fair values for in paragraphs (c) and (d) of this in- each class of property acquired and the struction 2–16. The remaining assets total of such values. and the liabilities of the predecessor (d) Merger of subsidiaries: companies, adjusted as necessary to The acquisition and merger of prop- conform with the accounting rules of erty of subsidiaries controlled through the Board, together with the balances ownership of the majority shares of in the accumulated amortization and voting stock is to be accounted for as a depreciation accounts, shall be re- pooling of interests or as a purchase corded in the appropriate balance sheet depending on the circumstances in accounts. each case. Where control was initially (c) When the amount recorded for as- acquired through issuance of capital sets acquired is more than the par or stock to stockholders of the subsidiary the rule applicable to pooling of inter- stated value of no par capital stock ests ordinarily is applicable. Where issued and other consideration paid, in- control was initially acquired through cluding liabilities assumed, the dif- purchase of stock the rule applicable to ference shall be applied to such extent purchase of property may be appro- as necessary and is available to provide priate even though the shares were first for any deficiency in past accrued purchased gradually from time to time depreciation on property classified as over a period of years, in which event depreciable; and, second, for any esti- recognition of retained earnings since mated loss from retirement of a branch date of acquisition assignable to such line, segment of track or other impor- shares may be proper. The journal tant facility indicated by supporting entry pertaining to acquisition of prop- records to be imminent. The remaining erty of subsidiaries shall be submitted amount of the difference, if any, shall to the Board for consideration based on be applied proportionately to reduce the principles herein and procedures the amounts includable in the property for which there is authoritative sup- accounts in accordance with paragraph port, and the accounting for the merg- (b) of this instruction 2–16, based on er shall become final only after ap- the percentage relationship between proval by the Board. such difference and the aggregate cost 2–16 Reorganization of railway. (a) of the property shown in the prede- When a railway reorganization or re- cessor companies’ accounts. ceivership has been consummated, the (d) When the amount applicable to assets acquired, liabilities assumed, the assets acquired is less than the par and the capital stock or other securi- or stated value of no par capital stock ties issued or assumed, and other con- issued and other consideration paid, in- sideration, shall be recorded in the ac- cluding liabilities assumed, the accounts in the manner stated hereunder. counting shall be referred to the Board An adjustment of capitalization result- for consideration and decision. ing in modification and reformation of classes of securities pursuant to vol- 2–17 Construction projects in which untary action of the holders of securi- governmental agencies, individuals, or ties but not resulting in a formal reor- others, and the carrier participate. (a) ganization following a bankruptcy or The amount includible in the property other receivership proceedings (some- account for construction projects in times called a quasi-reorganization) is which the carrier and governmental not covered by this instruction 2–16. agencies, individuals, or others partici- Reduction of capital stock and other pate shall be (1) the payment made by contributions to capital by stock- the carrier for its share of the cost of holders shall be recorded in accordance construction plus (2) the recorded cost with the instructions in the text of ac- (estimated if unknown) of property re- count 795, Other capital. linquished as a direct result of the ar- (b) The amounts includable in pri- rangement and retired from service mary road and equipment property ac- less the value of salvage recovered

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therefrom by the carrier and less de- obligated to reimburse the lessor for preciation accrued on depreciable prop- the retired property other than erty, which is part of the carrier’s cost through the replacement, the lessee of the project. The amount so includ- shall (1) charge the cost of the replace- able in the property account shall be ment to account 732, Improvements on distributed equitably among the pri- leased property, (2) discontinue accruing mary accounts applicable to railway depreciation for lessor’s retired prop- property constructed. This amount erty, and (3) when recording final set- shall first be applied to railway facili- tlement with the lessor, consider joint- ties includable in accounts other than ly the amount accrued in account 772, 4, or 39, Other right-of-way expenditures, Accrued liability; Leased property, for Public improvements—Construction, then lessor’s retired property and the re- any remaining balance shall be in- spective amounts for the replacement cluded in account 4 or 39, as appropriate. In no case shall the amount in- included in accounts 732, Improvements cluded in the primary accounts for the on leased property, and 733, Accumulated railway facilities acquired exceed the depreciation; Improvements on leased actual cost of constructing such facili- property. When lessee is obligated to re- ties. The property account shall not in- imburse the lessor currently or at the clude any cost or value for facilities or termination of the lease for property land contributed or paid for by govern- retired other than through replace- mental agencies, individuals or others. ment, the lessee shall include the Property acquired as a specific con- amount of the obligation in the appro- tribution to capital by stockholders priate liability account. The lessee does not come under this rule. (See shall furnish the lessor such informa- text of account 795, Other capital.) tion as is required to enable the lessor (b) Construction projects as used in to perform necessary accounting. The this section means widening of high- accounting by the lessee and the lessor ways, construction of spillways, drain- shall be consistent with contractual ar- age canals, farm and other private rangements. passes, pipelines, drains or other facilities across the right-of-way; construc- [47 FR 26635, June 21, 1982, as amended at 52 tion of overhead highway bridges, and FR 4321, Feb. 11, 1987] railroad bridges over public highways 2–19 List of units of property. (a) This and across streams, which provide a list of units is established for the pur- railroad use in the operation of trains pose of designating the units of prop- and a public use in the uninterrupted erty to be used in accounting for addi- passage of highway and river traffic; tions to and retirements and replace- installation of warning signals to pro- ments of property. Detailed informa- tect highway traffic; and industrial tion is included in instructions 2–7 and side tracks. Also, reconstruction and 2–8. Items listed under road property relocation of tracks and appurtenant facilities such as occur in connection accounts are subject to the minimum with carrying out flood control, rec- rule applicable to additions to prop- lamation, and other public improve- erty. See instruction 2–2 pertaining to ment projects where it becomes nec- the minimum rule. essary to abandon part of the line of (b) This list of units will be revised railroad and relocate the tracks. from time to time as may be necessary 2–18 Leased property improvements to meet conditions. A carrier desiring and retirements. The cost to lessee of to include in any account an appro- structures, facilities, additions and priate unit not now specified therein betterments on leased property and for may, upon approval of the Board, make retirement of property the cost of such authorized addition to this list of which is included in account 732 Im- units. provements on leased property, shall be (c) Rules applicable to units of prop- accounted for in conformity with the erty rebuilt or converted and to principles in the instructions for prop- changes in line of road or tracks which erty owned. When lessor’s property is retired and replaced and lessee is not

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involve accounting for units or prop- Any applicable units listed under other ac- erty retired are set forth in instruc- counts. tions 2–12 and 2–13. Account 17, Roadway Buildings [42 FR 35017, July 7, 1977, as amended at 48 Any applicable units listed under account FR 7183, Feb. 18, 1983] 16, Station and office buildings, and 44, shop machinery. Account 3, Grading A retaining wall, riprap (hand placed), a Account 18, Water Stations protecting dyke, a protecting crib, a wing A complete water supply piping system. dam, a revetment, mattress, pipe or other A dam or reservoir. structures to provide drainage. Each entire A pump house. installation. Pumping machinery. Each complete installation. Account 5, Tunnels and Subways A water tank. Each complete installation. The entire masonry, entire timber, and en- A complete track trough at one location. tire metal lining of a tunnel or subway, in- A water crane. Complete with pit. cluding portals and wing walls. A water treating plant.

Drainage. Entire installation. Account 19, Fuel Stations Lighting. Each entire installation. Ventilation. Each entire installation. A complete fuel supply system, including appurtenances. Account 6, Bridges, Trestles, and Culverts A pump house. A steel superstructure. A fuel oil storage tank (large). A concrete or stone substructure. Account 20, Shops and Enginehouses A concrete trestle, a complete bridge or ap- proach. A complete building, including attached A timber trestle, a complete bridge or ap- platform. proach. A complete platform structually detached Complete machinery for operating a movable from a building. span. A turntable. A protecting dyke, a protecting crib (a fend- A turntable pit. er), a wing dam, a complete culvert. Each A transfer table with machinery. entire installation. A transfer table pit. A sand storage and handling and drying ap- Account 7, Elevated Structures paratus. Any applicable units listed under account Outdoor bins. Each complete installation. 6, Bridges, trestles, and culverts. A lorry track system (outside). A boiler washing plant. Each complete in- Account 13, Fences, Snowsheds, and Signs stallation. An overhead crane, outside. A complete snowshed. Each outside pipe installation, steam, air, One continuous mile of right-of-way fence. One continuous mile of permanent sand or water, etc. snow fence. Each sewer installation, storm or sanitary. Paving. Each complete installation. Account 16, Station and Office Buildings Each shop fence or wall installation. Any applicable unit under account 16, Station A complete building, including attached and office buildings. platform. A complete platform structurally detached Account 22, Storage Warehouses from a building. Each retaining wall installation. A complete building, including attached Each timber trestle installation. platform. Each outside steam, water, air, etc., pipe line A complete platform structurally detached installation. from a building. Each storm or sanitary sewer installation. For additional items, see accounts 16 Station A complete fence. and office buildings, and 44, Shop machinery. Paving. Each complete installation. Account 23, Wharves and Docks A station stockyard. Each complete installation. A timber float bridge. A track scale. A steel float bridge. A track scale pit. A wharf (including pile clusters). An outside crane or conveying system for A timber incline. handling freight. A bulkhead. A motor truck. Jetties or breakwater. A motor tractor. Ferry racks (including pile clusters).

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Float racks. Each mile or complete installation if less Each complete machinery installation. than one mile of cable with associated For additional items, see accounts 3, Grad- parts. ing, 6, Bridges, testles and culverts, and 44, Each mile or complete installation if less Shop machinery. than one mile of conduit with associated parts. Account 24, Coal and Ore Wharves Switch movement with associated parts. Car dumper complete. A complete building. Timber bridges. An interlocking plant complete (excluding Steel bridges. machine). Each complete machinery installation. An interlocking machine. A loading or unloading machine complete. Signal bridge complete. Each coal or ore pocket installation. Each highway crossing protection installa- For additional items, see accounts 6, Bridges, tion complete. trestles and culverts, 16, Station and office Each car retarder installation complete. buildings, 20, Shops and enginehouses, 23, A traffic control or C.T.C. system installa- Wharves and docks, and 44, Shop machinery. tion complete.

Account 25, TOFC/COFC Terminals Account 29, Power Plants A complete building. Any applicable units listed under accounts A complete building, including attached 16, Station and office buildings, and 20, Shops platform and ramp. and enginehouses. A complete platform and attached ramp, Account 31, Power Transmission Systems structurally detached from a building. A portable ramp. A continuous mile, or a separate installation A complete fence. if less than a mile, of catenary complete Paving, each complete installation. including catenary hangers, trolley wire An overhead crane, complete. and appurtenances. Each sewer installation. A continuous mile, or a separate installation A truck or tractor used exclusively at TOFC/ if less than a mile, of transmission line, in- COFC terminals. cluding poles, wires, transformers, switch- Each floodlighting pole or tower installa- es, and other appurtenances. tion. Each outside steam, air, etc., pipe line in- Each floodlighting installation. stallation. A power distribution system, complete. A manhole. Any applicable units listed under all other Substation or switching station complete. accounts. Each mile, or installation if less than a mile, of third rail. Account 26, Communication Systems A catenary bridge or support. A high-tension transmission tower. A complete mile section or complete instal- Any applicable units listed under accounts lation if less than a mile of pole line in- 26, Communication systems, and 27, Signals cluding cross arms, wires and appur- and interlockers. tenances. Each mile or complete installation of cable Account 35, Miscellaneous Structures with associated parts. Each mile or complete installation of con- A complete building, including attached duit with associated parts. platform. A complete tower. A complete platform structurally detached A complete installation at each location from a building. constituting a separate means of commu- A conveyor system complete. nication, such as radio, radar, carrier tele- An elevator system complete. phone, teletype, or other communication A blowing system complete. systems. Any applicable units listed under other ac- For additional items see account 16, Station counts. and office buildings. Account 37, Roadway Machines Account 27, Signals and Interlockers Each roadway machine complete including A signal system installation complete, or accessories. section thereof, with associated parts, in- Each on and/or off-track automotive vehicle cluding masts, batteries, relays, ladder, complete, including appurtenant special- etc. purpose machinery. A complete mile section or complete instal- Account 39, Public Improvements—Construction lation if less than a mile, or pole line including cross arms, wires and appur- Any applicable units listed under other ac- tenances. counts.

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Account 44, Shop Machinery Account 59, Computer Systems and Word Processing Equipment A machine (including foundation and motor, if any), such as lathes, shapers, slotters, A Mainframe boring machines. A Mini-computer A furnace. A Word processing system A boiler installation complete. A Printer A motor vehicle used in shops only. A Monitor Testing equipment. A Modem Overhead crane, complete. A Storage device [42 FR 35017, July 7, 1977, as amended at 52 Account 45, Power Plant Machinery FR 4325, Feb. 11, 1987] A power plant machine, including foundation, such as a turbine, rectifier, dynamo, 2–20 Accounting for leases. (a) Leases generator. shall be accounted for as capital leases Any applicable unit listed under account 44, whenever the lease meets one or more Shop machinery. of the following four criteria: (1) The lease transfers ownership of Account 52, Locomotives the property to the lessee by the end of Diesel electric, lead or booster, i.e., ‘‘A’’ or the lease term, ‘‘B’’ units. (2) The lease contains a bargain pur- Diesel electric. Extra or spare engines. chase option, Electric locomotive. (3) The lease term is equal to 75 per- Radio control locomotive. cent or more of the estimated eco- Account 53, Freight-Train Cars nomic life of the property, and, (4) The present value at the begin- A complete car. ning of the lease term of the minimum Motor equipment of a motor driven car. A propulsion motor, including generator. lease payments equals or exceeds 90 A freight container, complete. percent of the fair value of the leased property to the lessor at the inception Account 54, Passenger-Train Cars of the lease less any related investment A complete car, including interior fur- tax credit retained by the lessor. nishings. (b) If the lease does not meet any of Motor equipment of a motor driven car. the four criteria, the lease shall be A propulsion motor, including generator. classified and accounted for as an operating lease. Account 55, Highway Revenue Equipment (c) When accounting for capital A complete vehicle. leases the lessee shall record the asset A chassis. and the related obligation. The amount A container. recorded as the asset and the obliga- A bogie. tion shall be the present value at the Account 56, Floating Equipment beginning of the lease term of the minimum lease payments during the lease A complete vessel or boat, exclusive of ma- term, excluding that portion of the chinery. Machinery: a boiler, a motor, an engine. payments representing executory costs such as insurance, maintenance, and Account 57, Work Equipment taxes to be paid by the lessor. However, (a) Rail equipment: (1) A complete car or ma- if that amount exceeds the fair value of chine, (2) A boiler, (3) An engine, (4) A the leased property, the amount re- motor, (5) Machinery equipment (with or corded as the asset and the obligation without tractive machinery) such as con- shall be the fair value. The lessee shall crete mixer, snow plow, derrick, steam compute the present value of the min- shovel, or pile driver, (6) A complete motor imum lease payments using its incre- equipment. mental borrowing rate unless (1) it is (b) Floating equipment—Work: (1) A com- practicable to learn the implicit rate plete vessel or boat, (2) A boiler, (3) An engine, (4) A motor. Any applicable units computed by the lessor and (2) the im- listed under other accounts. plicit rate computed by the lessor is less than the lessee’s incremental bor- Account 58, Miscellaneous Equipment rowing rate. If both of those conditions An airplane. are met, the lessee shall use the im- A complete vehicle. plicit rate.

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(d) Leased assets that meet the cri- criteria that would require capitaliza- teria for classification as a capital tion. lease shall be subject to depreciation NOTE: The carrier shall follow generally over their useful lives in the same accepted accounting principles where an in- manner as assets owned. If the capital terpretation of the rules for lease accounting lease meets the criteria of either In- is needed or obtain an interpretation from its public accountant or the Board. struction 2–20(a)(1) or 2–20(a)(2), the asset shall be amortized in a manner [42 FR 56611, Oct. 27, 1977, as amended at 52 consistent with the lessee’s normal de- FR 4321, 4325, Feb. 11, 1987] preciation policy for owned assets. If 2–21 Freight train car repair costing. the lease does not meet either of these Class I railroads shall report the costs two criteria, the asset shall be amor- of repairing freight train cars by car tized in a manner consistent with the types. lessee’s normal depreciation policy ex- (a) The accounting for freight train cept that the period of amortization car repair costs shall agree with the shall be the lease term. applicable instructions and texts of ac- (e) The accounting accorded the lease counts in 49 CFR Part 1201 relating to shall be subject to the same consider- the equipment repair process (see Note ations as other obligations in A). classifying them with current and non- (b) Railroads may assign either ac- current liabilities in the classified bal- tual costs, standard costs, or a com- ance sheet. Leases that meet the cri- bination of both to the accounting teria requiring capitalization shall be process. Standard costs, if used, shall recorded in those accounts that provide recognize the differences in performing for carrier operating property or prop- repairs on various types of equipment, erty used in other than carrier oper- and the differences related to specific ations, as appropriate. The accounts repair facilites. Standard costs shall be shall segregate the amounts pertaining based on adequate operational data to capital leases. which are reviewed at least annually. (f) If the lease qualifies as an oper- The resulting variances (price, effi- ating lease it should be accounted for ciency, capacity, etc.) shall be reason- by charging the rent to expense over ably allocated back to the car types to the lease term. The rental expense derive the amounts reported in Form should be recognized on a straight line R–1. basis over the lease term unless an- (c) Railroads shall report repair costs other method is more representative of by the freight train car types shown in the use and the benefits derived. Schedule 415 of Form R–1. In assigning (g) The criteria specified in para- repair costs, railroads may use either graph (a) should be applied to all leases one of the following methodologies: regardless of the relationship between Level I: Job Order Cost System the lessor and the lessee unless it is clear that the terms of the lease trans- Railroads may use a job order cost system action have been significantly affected for assigning repair costs to the car types for by their relationship. In this situation, freight train cars. Under this methodology, railroads shall directly match direct labor the accounting should be modified to and materials with the specific unit of equip- recognize economic substance rather ment that was repaired. Actual costs, stand- than legal form. ard costs, or a combination of both may be (h) In the case of subsidiary compa- used as stated above. nies or companies under common control whose principal business activity Level II: Alternative Repair Costs Methodology is leasing property or facilities to the Railroads not using the job order cost sys- carrier, the carrier is encouraged to re- tem shall report freight train car repair quest special authority to file consoli- costs by using the methodology described dated or combined financial state- below: ments. If the carrier does not wish to (1) The repair costs relating to heavy, file consolidated or combined financial program, or project repairs of freight statements, capitalization of the lease train cars shall be directly assigned to will be required if the lease meets the the car types repaired by using actual

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or standard costs. A heavy repair is de- with the repair costs of system cars, fined as a repair that is relatively so but the responsibility of the repair ul- material in cost, repair time, or phys- timately rests with and is paid by a ical damage that management’s in- foreign road. volvement in the determination of the (d) Railroads shall submit to the repair to be made is necessary and rel- Board any repair cost by car type atively greater than usual. Program or methodology which does not agree with project repairs are those repairs which item (c) above. The Board shall review are performed under a predetermined the methodology and determine if it is plan where estimates costs, time peri- acceptable for reporting purposes. ods, and car types to be repaired are (e) Railroads may submit justifica- identified. tion and supporting documents re- (2) The repair costs relating to light questing waiver from provisions re- and running repairs of system cars quired by this instruction. This provi- shall be allocated to the car types by sion is intended to provide relief for using the Association of American those smaller Class I railroads that Railroads’ Car Repair Billing System might be unduly burdened by the cost (CRBS) as the process for distributing of developing and maintaining the re- light and running repairs. The CRBS quired system. Waivers shall be di- will be the tracking system for record- rected to the Board’s Accounting and ing the number of repairs, the car Valuation Board. types and types of repairs. Then by ap- (f) Equipment repair cost records, in- plying the CRBS standard costs to the cluding the allocation methods used, particular repairs, standard costs rela- shall be maintained and made available tionships by car type can be developed to the Board upon request. and used to distribute actual light and NOTE A: The following accounts and ref- running repair cost pools to the car erence pertain to the freight train car repair types. process: (3) Railroads shall match repair costs 11–22–42 billed by and paid to foreign roads with 21–22–42 the car types that were repaired. For- 39–22–42 eign billings for light and running re- 40–22–42 41–22–42 pairs are usually conducted through 61–22–42 CRBS, and therefore, the car types can Instruction 2–12, Units of property rebuilt or be identified. For heavy off-line re- converted. pairs, car type identification is possible because system management is [46 FR 52951, Dec. 4, 1981, as amended at 52 FR 4321, 4325, Feb. 11, 1987] generally involved with the authorization of such heavy repairs and car iden- 2–22 Map specifications. tification numbers are generally in- (a) Class I Railroad companies shall cluded in the billing process. maintain current maps of its property (4) Repair costs relating to foreign and shall promptly record any changes freight train cars shall also be reported that may take place. by car types. However, a separate (b) Class I companies shall furnish, breakdown between foreign and system on request, copies of maps showing its repair costs is not required for Board property as it exists on such date or reporting purpose. Car type identifica- dates as may be fixed by the Board. tion for light and running repairs to (c) Class I companies shall maintain foreign cars can be obtained from planimetric maps that show right-of- CRBS tapes. The cost of heavy repairs way, track and other important facili- to foreign cars should be accumulated ties at a scale to show sufficient detail. by car types. The resulting expense (d) Maps shall be indexed and titled credits from foreign railroads should be to clearly indicate the specific area de- assigned to the car types to which they picted. relate. (e) All maps shall be prepared in ac- (5) Railroads shall match any result- cordance with generally accepted map- ing expense credits with the car types ping practices. to which they relate. This can occur, [47 FR 50267, Nov. 5, 1982; 48 FR 32833, July 19, for example, when a railroad is charged 1983]

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2–23 Accounting for engineering costs. (d) The cost of designing, making (a) The pay and expenses of engi- plans and specificaitons, and super- neers, assistants and clerks engaged in vising the construction of equipment the survey and construction of new shall be included in the cost of the par- lines and extensions shall be included ticular equipment. in the cost of the particular property (e) Fees and expenses of architects involved. This accounting treatment specially employed for designing or su- also applies in making additions to and pervising the construction of buildings improvements of the carriers road, in- shall be included in the accounts ap- cluding wharves and docks. propriate for the cost of the buildings constructed. List of Officers and Employees [49 FR 2254, Jan. 19, 1984, as amended at 52 Chief engineer. FR 4321, Feb. 11, 1987] Assistant engineers. Bridge and signal engineer. 2–24 Accounting for other general ex- Architects and draftsmen. penditures. Chief clerk and other clerks. Expenditures of a general nature that Transitmen and levelmen. are attributable but not directly as- Rodmen and chainmen. signable to original construction or im- Cooks and porters on business cars. portant expansion of road shall be equi- ITEMS OF EXPENSE AND SUPPLIES tably assigned to the cost of specific units or segments of property. These Atlases and maps. expenditures include the pay and ex- Barometers. penses of executive and general officers Books for office use. Business car service. and their assistants engaged exclu- Cameras; compasses. sively with such construction, law ex- Camp equipage. penses (other than organization ex- Chains for surveyors. penses), stationery and printing, and Drawing boards. taxes before property is used in trans- Drawing instruments. portation operations. Field glasses. Furniture repairs and renewals. [49 FR 2255, Jan. 19, 1984, as amended at 52 Heating and lighting. FR 4321, Feb. 11, 1987] Magnets and magnifiers. Official train service. INSTRUCTIONS FOR MAINTENANCE Paper, blue-print. EXPENSES Periodicals and newspapers. Photographic supplies. Printing and stationery. 3–1 Items to be charged. (a) The ac- Provisions for business cars. counts provided for maintenance of Rent and repairs of offices. road property and of equipment are de- Rods for surveyors. signed to show the cost of repairs and Sextants and slide rules. also the loss through depreciation of Telegraph and telephone service. the property used in transportation op- Traveling expenses. erations, including expenses resulting Triangles and tripods. from ordinary wear and tear of service, (b) When employees listed in (a) exposure to the elements, inadequacy, above are engaged in the repair and obsolesence, or other depreciation, or maintenance of the roadway, their pay from accident, fire, flood, or other cas- and expenses shall be charged to the ualty. appropriate operating expense ac- (b) These accounts shall include the counts. cost of labor, materials and supplies, (c) Expenditures for tentative or pre- work-train service, floating equipment liminary surveys shall be carried in ac- work service, special machine service, count 743, Other deferred debits, until it contract work, privileges, protection is determined whether or not to con- from casualties, and other analogous tinue the work. If the project is contin- items of expense in connection with ued, expenditures for all surveys shall the maintenance of the plant used in be transferred to the appropriate prop- railway service. The cost of materials erty account and, if abandoned, to ap- and supplies, which shall include small propriate income accounts. tools, shall include the cost at the

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point of free delivery plus freight operating hothouses in connection with charges of foreign lines, and the costs the work of beautifying grounds; and of inspection and loading assumed by cost of clearing and removing casual the carrier; also a proportion of store incumbrances, such as ice, snow, and expenses. Such costs shall not include fallen timber. expenses of transportation over the (d) An employee’s job classification carrier’s line. Royalties for patent shall not govern the accounting for rights on mechanical appliances used work performed. Charges to a par- in repairs of equipment shall be in- ticular expense function shall be based cluded in the cost of the repairs. The on the nature of the work performed. cost of boarding, traveling, and other incidental expenses of employees shall [42 FR 35017, July 7, 1977, as amended at 52 FR 4325, Feb. 11, 1987] be included in the accounts to which the pay of the employees is chargeable, except where otherwise specified in the INSTRUCTIONS FOR DEPRECIATION text of the accounts. In calculating the ACCOUNTS cost of materials used proper allowance shall be made for the value of unused 4–1 Method. (a) There shall be portions and of cuttings, turnings, bor- charged monthly to operating expenses ings, etc., and for the value of the ma- or other appropriate accounts and cred- terial recovered from property repaired ited to account 735, Accumulated depre- and from temporary tracks, scaf- ciation; Road and equipment property, folding, cofferdams, and other tem- during the service life of depreciable porary structures used in repair work. road and equipment property, includ- (c) The cost of repairs shall include able in accounts classed as depreciable, the cost of inspecting to determine the amounts which will approximate the repairs necessary, and of adjusting or loss in service value not restored by repairing parts, both of road property current repairs or covered by insur- and of equipment, such as the repairing ance. The charges for accruing depre- of locomotives, cars, frogs, switches, ciation currently shall be computed in rails, etc.; the cost of inspecting and conformity with the group plan by ap- testing after repairs have been made plying to the cost of property such per- such as the testing of locomotives after centage rates as will distribute the repairs to determine whether the re- service value by the straight-line pairs have been properly made, and the method in equal annual charges to op- running of repaired locomotives light erating expenses or other accounts dur- in order to break them in for regular ing the estimated life of the property. service; incidental costs of repairs, In the case of track accounts 8, 9 and such as the construction or removal of 11, service value shall reflect net sal- false work in connection with mainte- vage value. For road property, the cost nance, cost of demolishing retired road shall be original cost or estimated property and disposing of the wreckage original cost, as used in the valuation therefrom when the property is dis- records, adjusted to current date. If a mantled by or for the carrier; cost of carrier submits proof that the actual maintaining or protecting traffic dur- cost of depreciable property is substan- ing the progress of construction work, tially different from cost figures in the including the cost of constructing, valuation records, the carrier may, maintaining and removing temporary with the approval of the Board, use tracks required for maintaining traffic such cost figures as the depreciation during the progress of the work; cost of base. mowing and beautifying grounds (b) The term group plan means the around buildings; repairing fences, plan under which depreciation charges sidewalks, driveways, and streets with- are accrued upon the basis of the cost in or adjacent to such grounds; cost of of depreciable property includable in removing snow from roofs of buildings accounts classed as depreciable using (when not removed by those employed the service lives of the individual de- in the buildings); cost of periodical res- preciable units in the accounts and torations of seasonal features, such as properly weighing to determine the gardens, shrubbery, and lawns; cost of composite annual rate of depreciation.

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(c) For the purpose of the group plan tion. The composite rates shall be of depreciation accounting, the fol- based on the results of a depreciation lowing primary accounts are classed as study performed by each railroad. A de- depreciable accounts: preciation study shall, in general, con- tain the following components: Road accounts: 3. Grading. (i) Actuarial or semiactuarial meth- 4. Other right-of-way expenditures. ods for determining service lives for 5. Tunnels and subways. road and equipment properties; 6. Bridges, trestles and culverts. (ii) Salvage value calculations for 7. Elevated structures. road and equipment properties; 8. Ties. (iii) Accumulated depreciation for 9. Rails and other track material. 11. Ballast. each account or subaccount as appro- 13. Fences, snowsheds, and signs. priate; 16. Station and office buildings. (iv) Other factors and related cal- 17. Roadway buildings. culations involving the depreciation 18. Water stations. process; and 19. Fuel stations. (v) A commentary on any adjust- 20. Shops and enginehouses. ments and judgmental factors used in 22. Storage warehouses. 23. Wharves and docks. the study. 24. Coal and ore wharves. (b) Railroads shall submit to the 25. TOFC/COFC terminals. Board for review and approval a report 26. Communication systems. on depreciation studies and proposed 27. Signals and interlockers. depreciation rates every three years for 29. Power plants. equipment property, and every six 31. Power transmission systems. years for road property. Railroads can, 35. Miscellaneous structures. 37. Roadway machines. however, submit depreciation studies 39. Public improvements-construction. prior to its scheduled year, in which 44. Shop machinery. case a new cycle will begin. 45. Power plant machinery. (c) In computing monthly deprecia- Equipment accounts: tion charges, the annual percentage 52. Locomotives. rates shall be applied to the deprecia- 53. Freight-train cars. tion base as of the first of each month 54. Passenger-train cars. 55. Highway revenue equipment. and the results shall be divided by 56. Floating equipment. twelve. 57. Work equipment. (d) Class II railroads are exempt from 58. Miscellaneous equipment. the three-year and six-year cyclical re- 59. Computer systems and word processing views, but shall submit depreciation equipment. studies when requested by the Board. (d) When abandonment of a branch Class III railroads are not required to line or other important segment of the submit depreciation studies. track structure or other part of the (e) A separate track depreciation rate plant for which depreciation charges shall apply to each primary property are not includable in the accounts as account in each track density category foreseeable within a reasonable period as provided in Instruction 4–3(d). Track of time due to exhaustion of traffic, ob- depreciation rates shall be developed solescence or other causes, application by estimating the average life based on may be made to the Board for author- an acceptable depreciation method- ity to record a suitable provision in an- ology, consistently applied, including ticipation of a probable loss. as an option the units of production method based on gross ton-miles per [42 FR 35017, July 7, 1977, as amended at 48 FR 4183, Feb. 18, 1983; 52 FR 4325, Feb. 11, mile of track. 1987] [42 FR 35017, July 7, 1977, as amended at 46 4–2 Rates of depreciation. (a) A sepa- FR 20210, Apr. 3, 1981; 48 FR 7184, Feb. 18, rate composite annual percentage rate 1983; 52 FR 4321, Feb. 11, 1987] for each depreciable property account, 4–3 Depreciation records to be kept. (a) or a subgroup in that account, shall be The carrier shall maintain for each used in computing annual depreciation class of property in convenient and ac- expenses and accumulated deprecia- cessible form engineering and other

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data bearing on prospective service classes, the carrier shall consider all traffic lives. carried over the segment whether in the car- (b) The carrier also shall keep such rier’s trains or in the trains of other carriers records of depreciable property and (estimated if not known). property retirements as will reflect the NOTE B: When a carrier operates systems of parallel tracks on a single roadbed, the den- service life of each class of property sity associated with the related segment of a which has been retired, or will permit rail route shall be the aggregate gross ton- the determination of service life indi- miles on all individual tracks. cations by past experience of useful life tenure of comparable property, turn- [42 FR 35017, July 7, 1977, as amended at 46 FR 20210, Apr. 3, 1981; 48 FR 7183, Feb. 18, over, or other appropriate methods; 1983; 52 FR 4321, Feb. 11, 1987] also such records as will reflect the percentage of value of the salvage for 4–4 Leased property—depreciation. (a) property retired from each class of de- The carrier shall include in operating preciable property. expenses charges for depreciation on (c) For purposes of analysis the car- road property and equipment used but rier shall maintain subsidiary records not owned, the rent for which is includ- in which the accumulated depreciation able in the lease rental accounts, and account is broken down into compo- shall maintain the same records of nent parts corresponding to each pri- service lives, salvage values, etc., as mary account to show the current provided for owned road property and credits and debits and the balance for equipment. The excess of the total each account. Such detailed informa- compensation paid over the amount tion shall be reported annually to this chargeable for depreciation shall be in- Board. For balance sheet purposes, the cluded in the rent account. If settle- accumulated depreciation account ment between the carrier and the les- shall be treated as a single composite sor is not currently made, the amount account for depreciable property. of the depreciation accrued during the (d) Carriers shall be prepared to jus- period of the lease shall be credited by tify all track depreciation rates by the carrier to account 772. Accrued li- keeping appropriate data on the service ability; Leased property. The necessary lives and salvage values of track com- adjustments of the difference between ponents which went into the life and the balance thus accrued in that ac- net salvage computation of each pri- count and the actual amount of settle- mary account in each density category. ment shall be made appropriately (e) The investment and related accu- through accounts 519, Miscellaneous in- mulated depreciation for accounts 3, 4, come, or 551, Miscellaneous income 5, 8, 9, 11 and 39 must be maintained by charges, at the time settlement for de- distinct traffic density categories. preciation on the property is made Each line segment shall be identified with the lessor. on January 1 of each year as belonging (b) The carrier shall not include in to one of the following traffic density the depreciation account in operating classes, based on the average traffic expenses any charges for depreciation density in the preceding three years: of equipment used but not owned when the rents therefor are not included in DENSITY the lease rental accounts but shall in- Class Description clude such charges in the appropriate other rent expense accounts. I Lines carrying at least 20 million gross ton-miles per 4–5 Jointly used property—deprecia- mile on an annual basis and not designated as belonging to Density Class III. tion. The owning carrier shall include II Lines carrying less than 20 million gross ton-miles in the depreciation accounts in oper- per mile on an annual basis and not designated as ating expenses the charges for depre- belonging to Density Class III. III Lines identified as potentially subject to abandon- ciation on units of depreciable property ment pursuant to Section 10904 of the Interstate jointly used with one or more other Commerce Act. carriers. The owning carrier shall cred- IV Yard and way switching tracks. V Electronic yards. it and each using carrier shall charge the appropriate joint facility accounts NOTE A: For purposes of designating line in operating expenses with the segments as belonging to one of the density amounts billed by the owning carrier

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against each using carrier for its pro- 5–2 Recorded value of securities portion of the service loss on property owned. (a)(1) The investment in securi- retired from service whether billed cur- ties other than those issued or assumed rently as depreciation or when retire- by the accounting company shall be re- ments occur as the loss in service corded in these accounts at cost, but value. The using carriers shall be re- excluding amounts paid for accrued in- quired to account for depreciation or terest and accrued dividends. retirement of units of road property (2) Accounts 702, Temporary Cash In- jointly used but not owned to the ex- vestments, 721, Investments in Affiliated tent of their contract liability. The Companies, and 722, Other Investments, same principle shall apply to terminal shall be maintained in such a manner companies and their nonowner tenants as to reflect the marketable equity se- in accounting for depreciation accruals curities’ portion (see definition 26) and or retirement charges recorded in the other securities or investments. accounts of the terminal companies. (3) For the purpose of determining net ledger value, the marketable eq- INSTRUCTIONS FOR INCOME AND uity securities in account 702 shall be considered the current portfolio and BALANCE SHEET ACCOUNTS the marketable equity securities in accounts 721 and 722 (combined) shall be 5–1 Current assets. (a) In the group of considered the noncurrent portfolio. accounts designated as current assets The net ledger value of each portfolio shall be included cash, those assets shall be the lower of its aggregate cost which are readily convertible into cash or market value. (See definition 26.) or are held for current use in oper- The amount by which aggregate cost ations, current claims against others exceeds market value shall be ac- and amounts accruing to the carrier counted for as the valuation allowance. which are subject to settlement in the Account 702, Temporary Cash Invest- ordinary course of business within one ments, shall be subdivided to include year. There shall not be included in the valuation allowance for the mar- this group of accounts any amount the ketable equity securities included collection of which is not reasonably therein. Account 724, Allowance for Net assured within one year because of the Unrealized Loss on Noncurrent Market- known financial conditions of the debt- able Equity Securities—Cr., is the valu- or or otherwise. Such items shall be in- ation allowance for the marketable eq- cluded in account 741, Other assets, at uity securities recorded in account 721, an amount not in excess of a reason- Investments in Affiliated Companies, and able estimate of realizable value. Items 722, Other Investments. Marketable eq- of current character but of doubtful uity securities accounted for by the eq- value shall be written down or written uity method shall not be combined off by charge to account 63–61–00, Gen- with other marketable equity securi- eral—Uncollectible accounts—General and ties when determining aggregate cost administrative, or account 553, and market value. Uncollectible accounts, as appropriate. (4) Realized gains and losses (the dif- Adjustment of these items of doubtful ference between net proceeds from sale value shall be made by direct reduction and cost) shall be included in the deter- of the asset account in which such mination of net income of the period in items are carried or by provision in ac- which they occur. Changes in the valu- count 709.5, Allowance for uncollectible ation allowance for marketable equity accounts, for the estimated securities included in account 702 shall uncollectible amount. be charged to account 551, Miscella- (b) The carrier shall transfer the esti- neous Income Charges, or credited to ac- mated realizable value of obsolete ma- count 519, Miscellaneous Income, as ap- terial to account 741, Other assets, equi- propriate, with a contra entry to the tably distribute the loss due to obsoles- valuation allowance contained within cence among the accounts ordinarily account 702. Changes in the valuation chargeable for such classes of material, allowance for marketable equity secu- and concurrently credit account 712, rities included in accounts 721 and 722 Material and Supplies. shall be recorded in equity account

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798.1, Net Unrealized Loss on Noncurrent (i) An investment account to include Marketable Equity Securities, with a (1) equity in the undistributed earnings contra entry to valuation account 724. or losses of the investee since the date (5) If there is a change in the classi- of acquisition (see definition 21(g)); (2) fication of a marketable equity secu- accumulated amortization of the dif- rity between current and noncurrent, ference between cost and net assets at the security shall be transferred at the date of acquisition (see (b)(3) below); lower of its cost or market value at and other adjustments for disposition date of transfer. If market value is less or writedown of investments. than cost, the market value shall be- (ii) An income account to include (1) come the new cost basis, and the dif- the investor’s share of the investee’s ference shall be accounted for as if it undistributed profits or losses for each were a realized loss and included in the reporting period subsequent to acquisi- determination of net income. tion of the investment except that in (6) The accounting company shall the year of acquisition such amount write down the ledger value of any se- shall be determined from the date of curities to the extent of impairment in acquisition; (2) amortization for the re- their value or write off entirely if there porting period of the difference be- is no reasonable prospect of realizing tween cost and net assets at date of ac- any value therefrom. For long term in- quisition. This account shall be closed vestments in marketable equity securi- at year-end to the retained earnings ties, when the decline in market value memorandum account discussed in below cost is judged to be other than paragraph (iii) below. temporary, the cost basis of the indi- (iii) A retained earnings account to vidual security shall be writen down to include (1) equity in the undistributed a new cost basis. The amount of the earnings or losses of the investee since write-down shall be accounted for as the date of acquisition; (2) accumu- realized loss by a charge to account lated amortization of the difference be- 551, Other Income Charges, and a credit tween cost and net assets acquired at to account 723, Reserve for Adjustment of date of acquisition (see (b)(3) below). Investment in Securities. The new cost (iv) Other memorandum accounts basis shall not be changed for subse- will be needed for such adjustments as quent recoveries in value. gains and losses on disposition of in- (b)(1) For financial statement pur- vestments, recognition of impairments poses the carrier shall follow the prin- in value, the investor’s share of ex- ciples of equity accounting for (1) all traordinary and prior period adjust- investments in corporate joint ven- ments reported in the investee’s finan- tures (see definition 21(c)), and (2) all cial statements (see instruction 1–2(d)), investments in voting stock of affili- and provision for deferred taxes where ated companies giving the carrier the it is reasonable to assume that undis- ability to significantly influence the tributed earnings of an investee will be operating and financial policies of an transferred to the investor in a taxable investee (see definition 21(b)). For pur- distribution. These memorandum ac- poses of this instruction an investment counts shall be closed at year-end to of 20 percent or more of the out- the retained earnings memorandum ac- standing voting stock of an investee count discussed in paragraph (iii) will indicate the ability to exercise sig- above. nificant influence over an investee in (3) The carrier shall retain the fol- the absence of evidence to the con- lowing information for each investee in trary. support of the worksheet or memo- (2) Since the equity method is not to randum accounts: be effected by entries in the books of (i) Original cost of investment. accounts but is to apply only in finan- (ii) Equity in net assets of investee at cial reports to the Board, the carrier date of acquisition. shall establish worksheet or memo- (iii) Allocation of difference between randum accounts. Three basic work- cost and equity in net assets, namely, sheet or memorandum accounts are to specific assets of investee or to needed: goodwill.

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(iv) Accumulated amortization of dif- (9) The investor shall suspend appli- ference between cost and equity in net cation of the equity method when the assets. investment (including the investment (v) Unamortized balance of difference memorandum account) together with between cost and equity in net assets. any net advances made to the investee (vi) Equity in undistributed earnings/ is reduced to zero. Additional losses losses for each year since date of acqui- shall not be provided for unless the in- sition. vestor has guaranteed obligations of (vii) Dividends received since date of the investee or is otherwise committed acquisition if determinable. to provide further financial support for (viii) Proceeds from sale of invest- the investee. If the investee subse- ments. quently reports net income the inves- (4) Any difference between the investor shall resume applying the equity tor’s cost and its share of the net as- method at such time as its share of sets of the investee at date of acquisi- that net income equals the share of net tion shall be allocated to specific as- losses not recognized during the period sets of the investee to the extent the of suspension. difference is attributable to them. (10) When the investor’s voting stock When the difference is allocated to de- interest falls below the level of owner- preciable or amortizable assets, depre- ship described in paragraph (b)(1) of ciation and amortization (through the this instruction, the investment no investment and income memorandum longer qualifies for the equity method. accounts) should absorb the difference Should dividends received on the in- over the remaining life of the related vestment in subsequent periods exceed assets. If the difference is not related the investor’s share of earnings for to specific accounts, it should be con- such periods, the investment memo- sidered goodwill and amortized over a randum and income memorandum ac- reasonable period not to exceed 40 counts shall be reduced by the excess years. For investments made prior to amount. November 1, 1970, amortization of good- (11) When the level of ownership of an will is not required in the absence of investment increases to that described evidence that the goodwill has a lim- in paragraph (b)(1) of this instruction, ited term of existence. the equity method shall be applied. The (5) The financial statements of the memorandum accounts for the invest- investee that are used for equity ac- ment, income (for current year’s equity counting should be timely. If the ac- in undistributed earnings less counting year of the investee differs amoritzation), and retained earnings from that of the investor then the most (for prior years’ equity in undistrib- recent available financial statements uted earnings less amortization) shall may be used. The lag in reporting be adjusted retroactively on a step-by- should be consistent from period to pe- step basis determining the equity in riod. net assets at date of acquisition, amor- (6) Material profits or losses on tization adjustment, and equity in un- transactions between the investor and distributed earnings or losses at each investee shall be eliminated until real- level of ownership. Where small pur- ized by either company as if the two chases are made over a period of time were consolidated. and then a purhase is made which (7) A transaction of the investee of a qualifies the investment for the equity capital nature that affects the inves- method, the date of latest purchase tor’s share of the investee’s stock- may be used as date of acquisition. holder’s equity should be reported in (12) Information having significance the financial statements as if the two with respect to the investor’s owner- were consolidated. ship in investees shall be disclosed in (8) The investor shall deduct any notes to financial statements of annual dividends applicable to outstanding cu- reports filed with the Board in accord- mulative preferred stock whether or ance with generally accepted account- not declared, and any other dividends ing principles. declared when computing its share of (c) When securities with a fixed ma- undistributed earnings or losses. turity date are purchased at a discount

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(i.e., when total cost including broker- balances in these accounts. Related age fees, taxes, commissions, etc., is debt expense shall also be charged to less than par), such discounts may be account 548 on a proportional and con- amortized over the remaining life of sistent basis. The amounts for the re- the securities through periodic debits spective debit balances for discount to the account in which the securities and expenses applicable to a particular are carried (preferably coincident with issue of obligations may be charged di- entries recording interest accruals) and rectly to account 548 at time of issue credits to the same account in which when the aggregate of such amounts interest income is credited. No debits does not appreciably affect the ac- shall be made in respect to discounts counts. The method of apportioning upon securities held as investments or debt discount, issue costs, and pre- in special funds if there is reason to be- mium to accounts 517 and 548 shall be lieve that such securities will be disposed of by redemption or otherwise at the interest method, where the effective less than par or will not be paid at date interest rate on the date of issuance is of maturity. When securities with a applied to the carrying value (debt, less fixed maturity date are purchased at a related discount, and issue cost, plus premium (i.e., when the total cost in- related premium of each specific issue cluding brokerage fees, taxes, commis- to the beginning of any given period.) sions, etc., is in excess of par), such However, other methods of amortiza- premium may be amortized over the re- tion may be used if the results ob- maining life of the securities through tained are not materially different periodic credits to the account in from those which would result from the which the securities are carried (pref- interest method. erably coincident with entries record- (c) When any funded debt which has ing interest accruals) and debits to the been actually issued to bona fide hold- same accounts in which the interest in- ers for value is reacquired by the ac- come is recorded. counting company, that proportion of NOTE: The carrier shall follow generally the balance remaining in accounts con- accepted accounting principles where an in- taining discount, expense and premium terpretation of the rules for equity accounting is needed or obtain an interpretation on funded debt for the subclass of the from its public accountant or the Board. security reacquired applicable to the 5–3 Discounts, expenses, and premiums portion reacquired shall be credited or on debt. (a) Ledger accounts shall be charged thereto, as appropriate, and provided to cover the discounts, ex- concurrently charged or credited to ac- penses, and premiums on the sale or re- count 519, Miscellaneous income, account sale of each subclass of funded debt and 551, Miscellaneous income charges; or to of receivers’ and trustees’ securities account 570, Extraordinary items, as ap- issued for the benefit of or assumed by propriate, in accordance with the text the company. (For explanation of sub- of these accounts. Such proportion class see account 765, Funded debt shall be based upon the ratio of the par unmatured.) The net debit balances re- value of the security reacquired to the maining in the ledger accounts for dis- par value of all the securities of the count and premium shall be included in subclass actually outstanding imme- account 770.1, Unamortized debt dis- diately before such reacquirement. count, and the net credit balances in Gains and losses from extinguishment account 770.2, Unamortized premium on of debt (excluding debt maturing seri- debt. Debt expense shall be included in ally) which is acquired to satisfy sink- account 743, Other deferred debits. ing fund requirements, shall not be re- (b) Each fiscal period there shall be corded as extraordinary items regard- charged to account 548, Amortization of less of amount, but shall be included in discount on funded debt, a proportion on accounts 519 and 551, as appropriate. a consistent basis of each of the debit Such gains and losses shall be sepa- balances in the discount and premium rately disclosed in reports to this accounts and correspondingly there shall be credited to income account 517, Board. Release of premiums on funding debt, a [42 FR 35017, July 7, 1977, as amended at 52 similar proportion of each of the credit FR 4325, Feb. 11, 1987]

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5–4 Discount, premium, and assessment Other debits to retained earnings. Any on capital stock. (a) Separate ledger ac- excess of recorded value over counts shall be provided for each sub- reaquisition cost shall be credited to class of capital stock issued or assumed account 795, Other capital. by the accounting company to cover (f) When capital stock is reacquired, discount suffered and premium realized either by purchase or donation, and is at the time of sale of capital stock. not retired or cancelled, nor properly General levies or assessments against includable in sinking or other funds, stockholders shall be credited to the the reacquisition cost shall be charged appropriate ledger accounts for the to account 798.5, Treasury stock. subclass of capital stock against which (g) When treasury stock is resold, ac- the levy or assessment is made. count 798.5, Treasury stock, shall be (b) The total of net debit balance in credited with the cost paid for it. Gains these ledger accounts shall be included shall be credited to account 795, ‘Other in account 793, Discount on capital stock, capital.’ Losses shall be charged to ac- and the total of net credit balances in count 795, Other capital, to the extent account 794, Premiums and assessments that previous net gains from sales or on capital stock. retirements of the same class of stock (c) Discount on each subclass of cap- are included therein; otherwise, to ac- ital stock may be offset or reduced by count 616, Other debits to retained earn- charges to account 794, Premiums and ings. assessments on capital stock, to the ex- 5–5 Joint liabilities. The accounting tent that net gains from premiums or company shall state as a liability in its assessments have been included therein balance sheet the difference between or to account 795, Other capital, to the the total par value of securities jointly extent that net gains from reacquisi- or severally issued by it and others and tion and resale or retirement of capital the portion of such liability which, stock applicable to such subclass have under the joint arrangement, it is ex- been included therein. Any remaining pected will be liquidated by the other discount may be amortized by charge party or parties to the joint arrange- to account 616. Other debits to retained earnings, or may be retained and car- ment. The amount of the jointly or ried in account 793, Discount on capital severally issued securities expected to stock, until the stock to which the dis- be liquidated by the other party or par- count applies is retired. ties shall be shown as a contingent li- (d) In case the accounting company is ability in accordance with instruction permitted and elects with the approval 5–6 pertaining to contingent assets and of the Board, to distribute all or any liabilities. part of the net balance of other paid-in 5–6 Contingencies. (a) The proper ac- capital to its stockholders, the amount counting treatment for contingencies thus distributed shall be charged to ac- depends upon whether the contingency count 795, Other capital. is: Probable: the event or events are (e) When capital stock is reacquired, likely to occur; Reasonably possible: the either by purchase or donation, and is chance of occurrence of the future retired or cancelled, account 791, Cap- event or events is more than remote, ital stock, shall be charged with the par but less than likely; or Remote: the value, stated value of no par stock, or chance of occurrence of the future if no par stock without stated value, event or events is slight. the proportionate amount at which the (b) Loss contingencies must be ac- particular class of stock is included in crued when they are probable and the account 791. Any excess of reacquisi- amount of loss can be reasonably esti- tion cost over the recorded value of the mated. Where they are only reasonably stock shall be charged to account 795, possible, only footnote disclosure is re- Other capital, to the extent of the accu- quired. Where they are remote, foot- mulated net gains included in this ac- note disclosure is not required, but is count applicable to reacquisition and permitted. resale or retirement of such subclass. (c) Gain contingencies usually are Any remaining excess reacquisition not reflected in the accounts since to cost shall be charged to account 616, do so might be to recognize revenue

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prior to its realization. Adequate dis- material, such as ties, shall be added as closure shall be made of contingencies store expenses to the cost of that par- that might result in gain, but care ticular material. shall be exercised to avoid misleading (b) The total amount of storehouse implications as to the likelihood of re- expenses charged to these accounts alization. shall be distributed among the ac- [42 FR 35017, July 7, 1977, as amended at 52 counts to which material and sta- FR 4326, Feb. 11, 1987] tionery has been charged, in proportion to the amounts charged to each ac- 5–7 Long-term obligations. Commit- count for the items issued, except that ments under unconditional purchase the amount representing the pur- obligations associated with suppliers’ chasing department expenses shall be financing arrangements and future apportioned on the value of the items payments on long-term borrowings and issued which were purchased by that redeemable stock shall be disclosed in department. To avoid monthly fluctua- accordance with generally accepted actions in the ratio of store expenses to counting principles. Such disclosures the value of material and statonery shall not preclude accounting recogni- purchased or issued, carriers may make tion if the substance of a financing ar- a monthly apportionment on the basis rangement is the acquisition of an of fair percentage rates, provided the asset or incurrence of a liability. store expense accounts are adjusted [47 FR 4266, Jan. 29, 1982, as amended at 52 and closed out at the end of each year. FR 4321, Feb. 11, 1987] 6–3 Shop expenses. (a) To a clearing account entitled Shop expenses shall be INSTRUCTIONS FOR CLEARING charged items of expense at shops, ACCOUNTS enginehouses, repair tracks, and other places where mechanical work is per- 6–1 Items to be charged. In recogni- formed, not assignable directly to spe- tion of the fact that certain expendi- cific accounts. Such expenses shall be tures incident to the construction and apportioned among the various ac- the operation of property are not counts affected. The basis of distribu- chargeable directly to any particular tion shall be the relative proportion property investment or expense ac- which the total amount of charges to count, clearing accounts have been pro- Shop expenses bears to the total of the vided for the purpose of securing an eq- directly distributed labor. To avoid uitable distribution of such items to monthly fluctuations in the ratio of the proper primary accounts. shop expenses to the total of distrib- 6–2 Material and stationery store ex- uted labor, carriers are permitted to penses. (a) To clearing accounts called make the monthly apportionment on Material store expenses and Stationery the basis of a percentage of the distrib- store expenses shall be charged expenses uted labor, provided the shop expense in connection with purchasing, han- account is adjusted and closed out at dling and storing material and sta- the end of the year. tionery in and distributing it from the (b) The expenses assignable to this company’s storehouses. Including the account shall include the pay of fore- pay of officers and employees in the men (who exercise supervision over all purchasing and store departments and departments), their clerks, and other their traveling, office, and other ex- employees engaged in general work in penses; also expenses, including wages, and about shops, cost of heat, light and fuel, and supplies, of operating switch- power; cost of small tools and supplies ing locomotives when exclusively as- and water and power purchased; also signed to the service of switching at cost of removal of snow and ice from material storehouses. (Expenses of in- transfer tables and shop yards, and cidental switching at material yards by other incidental shop expenses. To this locomotives in regular switching serv- account shall be charged expenses, in- ice shall be charged to the appropriate cluding wages, fuel and supplies, of op- transportation accounts.) The pay and erating switching locomotives when ex- expenses of men employed in pur- clusively assigned to switching service chasing or inspecting a single class of at shops (the expenses of incidental

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switching at shops by locomotives in taining and operating an electric, transportation switching service shall steam, or other power plant (both be charged to appropriate transpor- building and machinery) shall be deter- tation accounts). mined by the purpose for which the 6–4 Gravel and sand pits and quarries. power produced is used. When a power (a) When a gravel or sand pit or quarry plant is intended and used for pro- is opened for operations likely to ex- ducing power solely for the carrier’s tend over a long period, an account own operations and the cost of oper- shall be set up designated, Operations of ating the plant is chargeable to clear- gravel pit at lllllll, or Operations ing account Shop expenses, or to any of quarry at llll, as the case may one specific account for operating ex- be. To this account shall be charged penses, the expenses of maintenance cost of the land in excess of its esti- shall be charged to the appropriate mated value after the gravel, sand, or stone has been removed (credit to the maintenance accounts, and the cost of property account in which the cost of operation to the account appropriate the land is included); payments for according to the use of the power. right to enter upon and remove ballast (b) When the power from such a plant from land not owned by the carrier; is properly chargeable to more than cost of sinking test holes; and costs one account, the expenses of maintain- preparatory to opening the pit or quar- ing and operating the plant shall be in- ry. To this account shall be charged cluded in clearing account designated also the cost, in excess of the esti- Power plant operations. The expense of mated salvage value, of rails and fas- maintenance shall be cleared from that tenings, ties, other material and labor account to the appropriate mainte- used in constructing tracks to and in nance accounts. The expenses of oper- the gravel pit or quarry (the estimated ation shall be apportioned to the ap- salvage being carried in an appropriate propriate accounts upon the basis of suspense account); cost of labor and quantity of power used for the various train service employed in producing, purposes. quarrying, and loading ballast, includ- (c) When a part of the power pro- ing the cost of operation, repairs, and duced by a power plant is sold and the depreciation of power shovels and other remainder is used in the carrier’s own machines and machinery; pay and ex- operations, the cost of maintaining and penses of watchmen; cost of explosives operating the plant shall be charged to and hand tools, and miscellaneous expenses; and cost of installing, oper- a clearing account. The expense of ating and maintaining signals and maintenance shall be cleared from that interlockers at gravel pits. account to the appropriate mainte- (b) Credit to the clearing account nance accounts. The proportion of the shall be made each month to cover the expenses of operation assignable to the cost of ballast material produced dur- power sold, on the basis of ratio of ing the month. The cost of production quantity of power sold to total quan- shall include the expenses directly as- tity of power produced, shall be cred- signable to the monthly output plus a ited to this clearing account and any proportion of the expenses not directly related profit shall be credited to ac- assignable, such as cost of land, tracks, count 110, Incidental. The remainder of machinery, and interlockers. This lat- the cost of operation shall be distrib- ter amount shall be computed upon the uted to the appropriate expense ac- basis of the ratio which the monthly counts for the carrier’s own operations. output bears to the total estimated (d) When power plants are intended yardage to be taken from the pit. When and used solely for furnishing power to any portion of the product of such pits others, their investment cost shall be or quarries is sold, the cost thereof included in account 737, Property used shall be credited to this clearing ac- in other than carrier operations, and the count and any related profit shall be revenues and operating expenses shall credited to account 110, Incidental. be included in the accounts provided 6–5 Power plant operations. (a) The accounting for the expenses of main- for operations of such property.

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(e) The accounting for the mainte- Payments for relinquishment of cattle passes nance of transmission systems and dis- and other rights. tribution systems shall be in accord- Removal and relocation of buildings and ance with instructions pertaining to other structures not purchased. power plant operations. Rent of land when part of consideration for purchase. Right-of-way agents’ compensation (engaged PROPERTY ACCOUNTS solely in acquiring right of way). Taxes accrued and assumed at time of pur- Road chase. NOTE A: The cost of land acquired in excess 0 Road. of that necessary for transportation oper- The several primary accounts in- ations shall be included in balance sheet ac- cluded in this general account are de- count 737, ‘‘Property used in other than carrier operations.’’ When the purchase of land signed to show the cost of land and acquired for transportation operations in- road property owned by the carrier and volves land not used for such purposes, the devoted to transportation service. charges to this account shall be based upon the estimated cost of only that portion 2 Land for transportation purposes. which is used for such purposes, and the cost This account shall include the cost of of the remaining land shall be included in ac- land of necessary width acquired for count 737, ‘‘Property used in other than car- roadway; the cost of land for station, rier operations.’’ Only the actual cost borne office, shop, and other grounds; for in- by the carrier for right-of-way and other lands acquired through vacation of streets gress to or egress from such grounds; and highways shall be included in this ac- for borrow pits, waste banks, snow count. No donation should be considered as fences, sand fences, and other railway involved in the acquisition of such property. appurtenances; and for storage of ma- NOTE B: Amounts paid for options to pur- terial adjoining the right-of-way; the chase land for use in transportation oper- cost of land for wharves and docks and ations shall be charged to account 743, the cost of riparian or water rights ‘‘Other deferred debits.’’ If the carrier subse- necessary therefor; the cost of remov- quently purchases the land, the amount of ing from the right-of-way and locating the option payment shall be transferred to elsewhere the property of others, and this account. If the carrier does not acquire the cost of the necessary land for relo- the land and forfeits the option paid, the amount shall be charged to account 551, cation of the property, when such costs ‘‘Miscellaneous income charges.’’ are assumed by the accounting carrier. The carrier’s records shall be kept in 3 Grading. such manner as to show separately the cost of land purchased. Proceeds from (a) This account shall include the the sale of timber or of improvements cost of clearing and grading the road- purchased with right-of-way, less any way, and of constructing protection for cost of removal, shall be credited to the roadway, tracks, embankments and this account. cuts. (b) When a part of a bridge or trestle, ITEMS OF EXPENSE or the entire structure, is converted by Abstracts. filling into an earth embankment, and Appraisals. the bridge or trestle is used in lieu of a Arbitrators in condemnation cases. temporary trestle which would other- Commissions paid to others. wise be required for the filling, the es- Condemnation expenses, including court costs and special counsel fees. timated cost of such temporary trestle Damages to property of others. shall be included in the cost of the fill- Deferred payments for right-of-way. ing, and charged to this account. (See Ditches for waterways when part of consider- note A, under account 6, ‘‘Bridges, tres- ation. tles, and culverts.’’) Judgments and decreed costs to clear or de- (c) When a tunnel is converted into fend titles. Notarial fees. an open cut, the cost of clearing, grub- Plats. bing, and excavating shall be included Premiums on condemnation bonds. in this account. (Also see instruction 2– Recording deeds. 11.)

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DETAILS OF ROADBED AND ITEMS OF EXPENSE count 735, ‘‘Accumulated depreciation; Road and equipment property.’’ Advertising for contractors’ bids. Berm ditches. [42 FR 35017, July 7, 1977, as amended at 48 Blasting. FR 7183, Feb. 18, 1983] Breakwaters. Bulkheading. 6 Bridges, trestles, and culverts. Clearing land. Cribbing. This account shall include the cost of Dikes (including those of earthen construc- the substructure and superstructure of tion which are intended to function indefi- bridges, trestles, and culverts which nitely). carry the tracks of the carrier over Ditches (not required by right-of-way agree- water-courses, ravines, public and pri- ment). vate highways, and other railways. Dressing slopes. Excavation for conversion of tunnels into DETAILS OF BRIDGE STRUCTURES open cuts. Abutments. Filling bridges, trestles, and culverts. Bridge signs. Grading outfits. Cofferdams. Grubbing land. Concrete and masonry ends for culvert. Material taken from borrow pits. Cribs. New channels for streams. Decking, including gravel for fire protection. Operations of steam shovels. Dike protection. Payments for privilege of wasting material Drainage systems. on the property of others. Draw protection. Payments for waste banks off the right-of- Drawbridge engines and machinery. way. False work. Retaining walls. Guard timbers. Revetments. Ice breakers. Riprap. Painting (except repainting). Spoil banks. Pier protection. Temporary trestles for fills. Piers and foundations. Tools for grading. Pipe culverts. Wing dams. Retaining walls. [42 FR 35017, July 7, 1977, as amended at 49 Riprap around abutments. FR 2255, Jan. 19, 1984] Riprap at culverts ends. Supports. 4 Other right-of-way expenditures. Water channels. Waterproofing. This account shall include the cost Wind dams. (in excess of cost of railway facilities Wing walls. installed, if any) actually borne by the NOTE A: When a part or the entire struc- carrier of improvement projects (other ture of a bridge or trestle is converted, by than public improvement projects), filling, into an earth embankment, the ledg- such as the construction of canals, er value of the structure, or of the portion farm and other private passes, pipe thereof filled, shall be credited to this ac- lines, drains, and other facilities across count. In case the bridge or trestle is used in the carrier’s right-of-way. lieu of a temporary trestle for the purpose of filling, the estimated cost of such temporary 5 Tunnels and subways. trestle shall be charged to account 3, ‘‘Grad- ing.’’ The ledger value of the structure or This account shall include the cost of portion thereof, filled, less the value of the tunnels and subways for the passage of salvage and the estimated cost of trestle trains, including apparatus for ven- charged to account 3 shall be charged to ac- tilating and lighting and safety devices count 735, ‘‘Accumulated depreciation; Road therein, other than signals. and equipment property.’’ NOTE B: The cost of bridges to carry the NOTE A: The cost of tracks, including carrier’s tracks over undergrade crossings, guard rails, in tunnels shall not be charged including the necessary piers and abutments to this account. to sustain them, shall be included in this ac- NOTE B: Station subways not highway count. crossings are includible in account 16, ‘‘Sta- tion and office buildings.’’ 7 Elevated structures. NOTE C: When a tunnel is converted into an open cut, the ledger value of the tunnel shall This account shall include the cost of be credited to this account. The service elevated structures and foundations of value of the tunnel shall be charged to ac- elevated railway systems. This account

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is applicable to structures other than Derails. earthwork, which are for the purpose of Frog blocking. elevating tracks above the grade of Frogs. streets, and which are not properly Guard-rail blocking. classifiable as bridges or trestles. Guard-rail clamps. NOTE: The cost of stations and other struc- Guard-rail fasteners. tures built on elevated structures shall be Guard rails, switch and other. accounted for according to the class of the Main rods. structure and not in this account. Nut locks. Nuts. 8 Ties. Offset bars. (a) This account shall include the Rail braces. cost of cross, switch, bridge and other Rail chairs. track ties used in the construction of Rail clips. Rail joints. tracks for the movement or storage of Rail rests. locomotives and cars (including tracks Rail shims. in shop, fuel station, supply yard areas, Rail splices. etc.), and the cost of additional ties Splice bars. subsequently laid in such tracks. This Step chairs. account should also include the cost of Switch chairs. labor for unloading, distributing and Switch crossings. placing ties in tracks. Switch lamps. (b) The cost of handling ties in gen- Switch locks and keys. eral supply and storage yards shall be Switch points. included as store expenses. Switch stands. NOTE: The cost of ties used in the construc- Switch targets. tion of car floats shall be included in the Switches. cost of such floating equipment, and the cost Tie plates. of ties used in the construction of temporary Tie plugs. tracks, such as gravel-pit and quarry tracks, Tie rods. shall be included in the appropriate clearing Track bolts. accounts. Track insulators. NOTE: Respacing crossties is to be consid- Track spikes. ered maintenance and expense. NOTE A: The cost of rails and other track [48 FR 7183, Feb. 18, 1983] material used in the construction of car floats shall be included in the cost of such 9 Rails and other track material. floating equipment and the cost of rails and (a) This account shall include the other track material used in the construc- cost of rails and other track material tion of temporary tracks, such as gravel-pit used in the construction of tracks for and quarry tracks, shall be included in the appropriate clearing accounts. the movement or storage of loco- NOTE B: The following activities are con- motives and cars (including tracks in sidered as maintenance and should be ex- shop, fuel station, supply yard areas, pensed accordingly. etc.); the cost of welding two or more • Rail flaw detection lengths or rail into continuous lengths • Track inspection for use in construction of tracks; and • Shifting of existing track the cost of labor associated with un- • Removing weeds in track loading and installation of the rail and • Transposing rail other track material. • Restoring chipped and battered rail ends (b) The cost of handling rails and by welding and/or by rail grinding train or other track material in general supply other such equipment. • Gauging track and storage yards shall be included as • Loading scrap track materials store expenses. • Lubricating rail • ITEMS OF OTHER TRACK MATERIAL Tightening bolts • Resetting spikes and rail anchors in exist- Angle bars. ing track Anticreepers. • Any other maintenance work not involving Bumping posts. the placement of track material Compromise joints. Connecting rods. [48 FR 7183, Feb. 18, 1983, as amended at 49 Crossings, including foundations or bases. FR 2255, Jan 19, 1984; 52 FR 4326, Feb. 11, 1987]

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11 Ballast. yards, fuel and water stations, and other building sites, shall be charged to the ac- (a) This account shall include the counts appropriate for the cost of the struc- cost of gravel, stone, slag, cinders, tures. sand, and like material used in NOTE B: The cost of signs for identifying ballasting tracks (including tracks in bridges, signals, stations, and other struc- shop, fuel station, and supply yard tures shall be included in the account appro- areas, etc.) including cost of worktrain priate for the cost of the structures. service and the cost of labor expended NOTE C: The cost of crossing signals, in- in placing ballast in tracks. cluding crossing gates, shall be included in account 27, ‘‘Signals and interlockers.’’ NOTE A: The cost of ballast used in the NOTE D: This account shall also include the construction of temporary tracks, such as cost of replacing units of such property or gravel-pit and quarry tracks, shall be in- substantial parts of fences or snowsheds the cluded in the appropriate clearing accounts. original cost of which are charged to this ac- NOTE B: Earth placed to form a crown in count. the middle of the track is not considered as ballast. 16 Station and office buildings. NOTE C: The cost of ballast material placed on the decking of bridges solely for fire-pro- This account shall include the cost of tected purposes shall be included in account station and general office structures, 6, ‘‘Bridges, trestles and culverts.’’ their fixtures, appurtenances, and fur- NOTE D: Surfacing (surface correction of niture necessary to equip the buildings existing ballast) is to be considered mainte- ready for use. nance and expensed. STATION AND OFFICE STRUCTURES AND [48 FR 7183, Feb. 18, 1983, as amended at 49 DETAILS FR 2255, Jan. 19, 1984] Breakwaters for protection of buildings. 13 Fences, snowsheds, and signs. Buildings and rooms for trainmen. Buildings on piers. This account shall include: Coal transferring machinery (not on coal and (a) Fences. The cost of right-of-way ore wharves). fences and snow and sand fences, farm Coal trestles (not at fuel stations). gates, cattle guards, wing fences, Drainage and sewerage systems. aprons, and hedges, on property not Elevators and machinery. previously fenced, excluding those Fences. around stockyards, fuel stations, sta- Freight cranes and derricks. Freight handling machinery. tion and shop grounds, and building Gas-supply systems. sites. General office buildings. (b) Snowsheds. The cost of Grain elevators and warehouses. snowsheds, including initial cost of Heating plants. planting trees for protecting tracks Hoisting engines, for handling freight. from snow. Lighting plants. (c) Signs. The initial cost of signs Ore-transferring machinery. Pavement within ground limits. other than those for identification of Platforms, passengers, including planking bridges, signals, stations and other between tracks. structures. Power distribution systems, interior. Sidewalks. SIGN ITEMS Station footbridges (not highway crossings). Boundary signs. Station intertrack fences. Bridge-caution signs. Telegraph offices. Crossing signs. Track scales. Curve and elevation markers. Water-supply systems. Division-limit signs. Yard offices. Mileposts. NOTE A: Office buildings used exclusively Monuments. in connection with maintenance of way shall Safety-first signs at crossings. be included in account 17, ‘‘Roadway build- Section-limit signs. ings.’’ Those used exclusively in connection Slow or stop signs. with maintenance of equipment shall be in- Tunnel-caution signs. cluded in account 20, ‘‘Shops and Water-station signs. enginehouses.’’ Whistle signs. NOTE B: The cost of grading and preparing Yard-limit signs. grounds both before and after the construc- NOTE A: The cost of fences (other than tion of station buildings, the cost of con- right-of-way boundary fences) around stock- structing sidewalks, driveways, and fences

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thereon, and the cost of permanent water WATER STATION STRUCTURES AND DETAILS rights shall be included in the cost of the Boilers. buildings. The fees and expenses of archi- Breakwaters for protection of buildings. tects employed to design or supervise the Buildings on piers. construction in the buildings shall also be Cisterns and dams. included in the cost of the buildings. How- ever, the cost of restoring the grounds after Fences. addition and betterment work shall be in- Pump houses. cluded in the appropriate operating expense Purifying plants. accounts. Reservoirs and wells. Settling basins. [42 FR 35017, July 7, 1977, as amended at 52 Stationary engines. FR 4326, Feb. 11, 1987] Steam pipes. Tanks and foundations. 17 Roadway buildings. Water pipe lines. Water-treating plants. This account shall include the cost of NOTE A: The cost of water stations used roadway shops and other roadway solely for supplying water to shops, power buildings, including drainage, water, plants, stations, hotels, tenement houses, or gas, and sewer pipes and connections; section houses shall be charged to the appro- and all machinery, fixtures, and fur- priate accounts relating to the property so niture to equip the building ready for supplied. use. NOTE B: The cost of a temporary water station established only for use during the con- LIST OF ROADWAY BUILDINGS struction period shall be included in the primary accounts to which is charged the cost Breakwaters for protection of buildings. of the work in connection with which the Carpenters shops. water station is used. Fire-engine houses. NOTE C: The cost of grading and preparing Frog shops for repair of track material. grounds both before and after the construc- Hand-car houses. tion of water station buildings, the cost of Lighting plants. constructing sidewalks, driveways, and Lumber sheds. fences thereon, and the cost of permanent Planning mills. water rights shall be included in the cost of Rail reclamation plant. the buildings. The fees and expenses of architects employed to design or supervise the Rail shops for repair of track material. construction of the buildings shall also be in- Rail welding plant. cluded in the cost of the buildings. However, Repair shops. the cost of restoring the grounds after addi- Scrap bins. tion and betterment work shall be included Section dwelling houses. in the appropriate operating expense ac- Tool houses. counts. NOTE: The cost of grading and preparing grounds both before and after the construc- 19 Fuel stations. tion of roadway buildings, the cost of con- This account shall include the cost of structing sidewalks, driveways, and fences thereon, and the cost of permanent water structures, facilities other than tracks, rights, shall be included in the cost of the and appliances necessary to equip for buildings. The fees and expenses of archi- service, stations for supplying fuel to tects, employed to design or supervise the locomotives and floating equipment. construction of the buildings, shall also be included in the cost of the buildings. How- FUEL STATION STRUCTURES AND DETAILS ever, the cost of restoring the grounds after Breakwaters for protection of buildings. addition and betterment work shall be in- Buildings on piers. cluded in the appropriate operating expense Dumping machinery. accounts. Elevating machinery. Fences. 18 Water stations. Fuel houses or stations. This account shall include the cost of Fuel-oil plants, pumps, and tanks. Fuel platforms on wharves. structures, facilities, and appliances Stationary engines. necessary to equip for service, stations Weighing apparatus. for supplying water. The cost of anal- NOTE A: The cost of fuel stations, coal yses of water preliminary to the estab- houses, etc., used solely for supplying fuel to lishment of water stations shall be in- shops, power plants, stations, hotels, tene- cluded in this account. ment houses, or section houses shall be

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charged to the appropriate accounts relating Steam-distribution systems, interior. to the property so supplied. Storehouses. NOTE B: The cost of a temporary fuel sta- Tanks, gas, and oil. tion established only for use during the con- Test rooms. struction period shall be allocated to the pri- Turntables. mary accounts charged with the construc- Upholstering shops. tion costs. Warehouses. NOTE C: The cost of grading and preparing NOTE A: The cost of distinct power plant grounds both before and after the construc- buildings for shop purposes shall be included tion of fuel station buildings, the cost of con- in account 29, ‘‘Power plants.’’ The cost of structing sidewalks, driveways, and fences distribution systems leading from such thereon, and the cost of permanent water power plants to shops shall be included in ac- rights shall be included in the cost of the count 31, ‘‘Power-transmission systems.’’ buildings. The fees and expenses of archi- NOTE B: The cost of grading and preparing tects employed to design or supervise the grounds both before and after the construc- construction of the buildings shall also be in- tion of shop buildings, the cost of con- cluded in the cost of the buildings. However, structing sidewalks, driveways, and fences the cost of restoring the grounds after addi- thereon, and the costs of permanent water tion and betterment work shall be included rights shall be included in the costs of the in the appropriate operating expense ac- buildings. The fees and expenses of archi- counts. tects employed to design or supervise the construction of the buildings shall also be in- 20 Shops and enginehouses. cluded in the cost of the buildings. However, This account shall include the cost of the cost of restoring the grounds after addition and betterment work shall be included buildings to be used as shops and in the appropriate operating expense ac- enginehouses and storehouses for mate- counts. rial for maintenance of equipment; NOTE C: The cost of shop buildings devoted foundations, except those special to solely to the maintenance of way and struc- particular machines and other appa- tures shall be included in account 17, ‘‘Road- ratus; furniture and fixtures other than way buildings.’’ equipment chargeable to account 44, Shop machinery; drainage, sewerage, 22 Storage warehouses. and water supply systems; and plants This account shall include the cost of for heat and light. storage warehouses, including machinery and fixtures therein. The buildings SHOP AND ENGINEHOUSE STRUCTURES AND herein referred to are not the ordinary DETAILS freight warehouses or stations where Air-compressor houses. freight is received for shipment, etc., Bins for material. but warehouses in which merchandise Blacksmith shops. is stored and which the railway compa- Breakwaters for protection of buildings. Buildings on piers. nies operate as storage warehouses. Car sheds and shops. NOTE A: The cost of grading and preparing Carpenter shops. grounds both before and after the construc- Electric-power distribution systems within tion of storage warehouse buildings, the cost buildings. of constructing sidewalks, driveways, and Enginehouses. fences thereon, and the cost of permanent Fire engine houses. water rights shall be included in the cost of Footbridges (not public highways). the buildings. The fees and expenses of archi- Foundries and machine shops. tects employed to design or supervise the Gas-compressor houses. construction of the buildings shall also be in- Heating and lighting plants. cluded in the cost of buildings. However, the Laboratories. cost of restoring the grounds after addition Lumber sheds. and betterment work shall be included in the Material and supply truck tracks. appropriate operating expense accounts. Motor-crane tracks. NOTE B: The cost of warehouses leased to Offices, shop. noncarriers shall be charged to account 737, Paint shops. ‘‘Property used in other than carrier oper- Pipe lines, air, and heat. ations.’’ Pipe lines, gas, interior. Planning mills and repair shops. 23 Wharves and docks. Platforms, shop and yard. Scale houses and scales. This account shall include the cost of Scrap bins. wharves, docks, dry docks, slips, float Sidewalks. bridges, and other landings for vessels,

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including the cost of necessary dredg- terment work shall be included in the appro- ing and the cost of float-bridge ma- priate operating expense accounts. chinery; also the cost of piling, pile protection, cribs, cofferdams, walls, 25 TOFC/COFC terminals. and other necessary devices and appa- This account shall include the cost of ratus for the operation or protection of structures, fixtures, machinery and ap- wharves and docks. purtenances comprising terminals used for loading and unloading trailers and DETAILS OF WHARVES AND DOCKS containers on and from flat cars. Bridge pontoons. Bulkheads. TOFC/COFC TERMINAL STRUCTURES AND Caissons and cribwork. DETAILS Dry docks. Cranes and hoists, including related machin- Ferry-bridge machinery. ery and appurtenances. Ferry bridges. Drainage and sewerage. Ferry slips. Fences. Jetties and inclines. Grading and preparing grounds for TOFC/ Transfer-bridge machinery. COFC terminals. Transfer bridges. Offices, TOFC/COFC terminal. NOTE A: The cost of coal and ore wharves Lighting system. and docks shall be included in account 24, Platforms, ramps and appurtenances. ‘‘Coal and ore wharves.’’ Power distribution systems. NOTE B: The cost of the land on which Sidewalks, pavements and driveways on ter- wharves are built and cost of riparian or minal grounds. water rights for wharves and docks shall be Terminal trucks and tractors. charged to account 2, ‘‘Land for transpor- NOTE A: ‘‘Trailer,’’ as used in the text and tation purposes.’’ elsewhere in this system of accounts unless NOTE C: The cost of buildings located on otherwise indicated in the context, means wharves shall be included in the accounts ap- trailer bodies used in TOFC/COFC service propriate for the class of buildings. which are permanently mounted on running NOTE D: The cost of grading and preparing gear. ‘‘Containers’’ means trailer bodies used grounds both before and after the construc- in TOFC/COFC service which are not perma- tion of wharves (other than coal and ore nently mounted on wheels or chassis, but are wharves), the cost of constructing sidewalks, separated from such running gear before driveways, and fences thereon, and the cost being loaded on flat cars. of permanent water rights shall be included NOTE B: The cost of grading and preparing in the cost of the wharves. However, the cost grounds both before and after the construc- of restoring the grounds after addition and tion of TOFC/COFC terminals, the cost of betterment work shall be included in the ap- constructing sidewalks, driveways, and propriate operating expense accounts. fences thereon, and the cost of permanent water rights shall be included in the cost of 24 Coal and ore wharves. the buildings. The fees and expenses of archi- This account shall include the cost of tects employed to design or supervise the wharves and docks for the transfer, construction of the buildings shall also be in- treatment, blending, or storage of coal cluded in the cost of the buildings. However, the cost of restoring the grounds after addi- or ore, including the cost of necessary tion and betterment work shall be included dredging and of conveyors, machinery, in the appropriate operating expense ac- and fixtures. counts. NOTE A: The structures referred to in the account do not include small transfer or 26 Communication systems. storage trestles or wharves at stations where This account shall include the cost of coal is stored or delivered, such trestles telegraph, telephone, radio, radar, in- being classed as station buildings. ductive train communication, and NOTE B: The cost of grading and preparing grounds both before and after the construc- other communication systems, includ- tion of coal and ore wharves, the cost of con- ing terminal equipment. structing sidewalks, driveways, and fences DETAILS OF TELEGRAPH AND TELEPHONE thereon, and the cost of permanent water TERMINAL EQUIPMENT rights shall be included in the cost of the wharves. The fees and expenses of architects Batteries. employed to design or supervise the con- Cables and wires, interior. struction of whaves shall also be included in Carrier terminating equipment. the cost of the wharves. However, the cost of Conduits, interior. restoring the grounds after addition and bet- Connecting wires.

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Current-controlling instruments. same account as the building in which lo- Electric generators and motors. cated or in the account appropriate for the Electric meters. service with which associated. Engines, stationary. Fuses and mechanical protectors. ITEMS Rectifiers. Buzzers, bells, dictaphone or other inter- Rheostats. office communication systems in an office Sending and receiving instruments. or group of buildings. Switchboards. Loud speakers, bells, or whistles in shop and Telegraph repeaters. other yards. Telephone repeaters. Loud speakers, public address devices, press Teletypewriters. button control lights, telautograph or Testing outfits. other systems in stations or on platforms. Transformers. Whistles, klaxons, or horns operated from signals towers. DETAILS OF TELEGRAPH AND TELEPHONE OUTSIDE PLANT NOTE C: Test sets shall be classified as tools and included in the account appro- Aerial attachments. priate for their use. Braces. Brackets. 27 Signals and interlockers. Cable boxes and appurtenances. Cable and wires, aerial. This account shall include the cost of Conduits and appurtenances. interlocking and other signals appa- Cross arms. ratus for governing the movements of Gas and associated facilities for cables. locomotives, cars, and trains, and for Guy stubs. the protection of traffic at crossings, Guy wires. including towers and other buildings, Insulators. furniture, fixtures, and machinery in Load coils. Submarine cables and connections. connection therewith; roadway instal- Telephone pole boxes. lations for train control and remote Towers. control including the cost of the initial Underground cables and connections. tests of such installation; also the cost of buildings and machinery of power DETAILS OF RADIO, RADAR, AND INDUCTIVE plants used primarily for the produc- TRAIN COMMUNICATION EQUIPMENT tion of power for the operation of sig- Aerials or antenna, and attachments. nals and interlockers. Buildings or towers used exclusively for wireless. ITEMS Control units. Automatic-train control devices other than Power generating, converting, or supply on equipment. equipment. Call-bell systems along track to call in Radar console and associated equipment. flagmen. Roadside or office equipment for all wireless Call boxes, electric. systems operated on special channels be- Car-retarder systems. tween train and train, train and tower or Centralized traffic control. office, or between ship and shore. Crossing flasher-light signals. Specialized testing and repair equipment. Crossing gates, highway and railway. Transmitters and receivers, including mobile Crossing signals bells. units. Crossing warning signals. NOTE A: Radio, radar or trainphone equip- Interlocker buildings and machinery. ment (except portable apparatus) which is Power apparatus primarily for the operation permanently attached to locomotives, cars, of signals and interlockers. work equipment, or other rolling stock or Power-distribution lines primarily for the floating equipment shall be included in the operation of signals and interlockers. same accounts as the equipment on which in- Signal buildings. stalled. Wireless sets for instruction, adver- Signal machinery, poles and foundations. tising, or entertainment shall be included in Train-order signals. the same accounts as the building in which NOTE A: When signal or interlocking appa- located. ratus is located in a station building, only NOTE B: Communication systems of lim- the cost of the signal or interlocking appa- ited extent, not connected with other sys- ratus shall be charged to this account. The tems used for special purposes and usually entire cost of the building shall be included installed within a single building, group of in account 16, ‘‘Station and office buildings.’’ buildings, or within the limits of a station or NOTE B: The cost of track material, such as shop layout or yard, shall be included in the switches, special rail braces, special roads,

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special track fastenings, split rails, derails, Water, sewer, gas, and drainage, pipes and derail stands, and frogs, used in connection connections. with interlockers, shall be included in ac- Wells (but not pumps). count 9, ‘‘Rail and other track material.’’ NOTE C: When derails are arranged so as to DAM, CANAL, AND PIPE-LINE ITEMS be thrown from switch stands, the cost of Aqueducts. labor expended in the installation of the con- Bridges. nections between the switch stand and derail Fences (other than right-of-way boundary and the devices for throwing the derail shall fences). be included in account 9, ‘‘Rail and other Footbridges. track material.’’ The cost of the material Reservoirs. shall be included in account 9, ‘‘Rail and Roadways. other track material.’’ Sluices. NOTE D: The cost of grading and preparing Valves. grounds both before and after the construc- Water rights. tion of signal and interlocker buildings, the NOTE A: The cost of power-plant machin- cost of constructing sidewalks, driveways, ery, including stacks resting on boilers, and and fences thereon, and the cost of perma- special foundations for machines, shall be in- nent water rights shall be included in the cluded in account 45, ‘‘Power-plant machin- cost of the buildings. The fees and expenses ery.’’ of architects employed to design or supervise NOTE B: The cost of the buildings and the the construction of the buildings shall also power machinery and other apparatus of be included in the cost of the buildings. How- plants used primarily for operating signals ever, the cost of restoring the grounds after and interlockers shall be included in account addition and betterment work shall be in- 27, ‘‘Signals and interlockers.’’ cluded in the appropriate operating expense NOTE C: Investment in buildings and ma- accounts. chinery of detached plants for furnishing [42 FR 35017, July 7, 1977, as amended at 52 power both for operating purposes and for FR 4326, Feb. 11, 1987] sale shall be included in this account and in account 45, ‘‘Power-plant machinery,’’ re- 29 Power plants. spectively. When plants are intended and used primarily for generating power for sale This account shall include the cost of to other than common carriers, the invest- power-plant and substation buildings (hous- ment shall be included in account 737. ing machinery provided for in account 45, ‘‘Property used in other than carrier oper- ‘‘Power-plant machinery’’); all foundations ations.’’ other than those special to particular machines and apparatus; and also dams, canals, 31 Power-transmission systems. pipe lines, and accessories devoted to the uti- This account shall include the cost of lization of water for power. Gas and sewer systems for conveying electricity, pipes and their connections, fixtures (including wiring) for lighting and heating, and fur- steam, and compressed air from pro- niture and miscellaneous fixtures shall be ducing plants to place or building considered as a part of the power-plant build- where used; also the cost of conduits ings. and of poles, cross arms, insulator pins, brackets, and other pole fixtures, and POWER-PLANT STRUCTURE ITEMS of other structures for power-trans- Buildings. mission and distribution systems, in- Coal bunkers, pockets and trestles. cluding those for electric railway oper- Fences (other than right-of-way boundary ation, and lighting systems for general fences). lighting purposes. Fixtures for lighting (including wiring) and heating power-plant buildings. POWER-TRANSMISSION SYSTEM ITEMS Foundations (except special foundations for Air pipe-line in car yards. machines and other apparatus). Compressed air pipe-lines. Fuel-oil tanks. Compressed air storage tanks (not at power Furniture. houses or shops). Hose and appliances for protecting buildings Cut-outs (not at power houses and sub- against fire. stations). Pavement within ground limits. Overhead trolley wires. Permanent rights in water supply. Rail-insulating devices. Platforms. Steam-heating pipe-lines in car yards. Smoke stacks and chimneys and their foun- Switchboards (not at power houses and sub- dations when distinct from and not resting stations). on boilers. Third-rail insulation and protection.

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Transformers (not at power houses and sub- included in the appropriate operating ex- stations). pense accounts. Underground power tubes. 37 Roadway machines. POLE-LINE AND CONDUIT ITEMS This account shall include the cost of Braces and other support for holding poles in the initial outfit of roadway machines position. provided for the maintenance of road- Brackets, cross arms, and other pole fixtures. way and structures at the time the Conduits for wires and cables. road is opened for commercial traffic, Cutting and trimming trees. and the cost of additional roadway ma- Guy stubs and wires. chines acquired subsequently. This ac- Manholes. count shall also include the cost of on Poles and towers. and/or off-track automotive vehicles, Sewer traps. permanently equipped with special- Stenciling or painting letters or numbers on purpose machinery such as hydraulic poles. cranes, derricks, ditching apparatus, NOTE A: The cost of wire and pipe-distribu- pile-driving equipment, and similar tion systems located within shop buildings machines listed below, and used exclu- and in stations and office buildings shall be sively in maintenance of way and included in the cost of the buildings, except that lateral service lines to equipment-shop structures. machines shall be included in account 44, LIST OF ROADWAY MACHINES ‘‘Shop machinery.’’ The cost of distribution systems used primarily for operating signals Adzers. and interlockers shall be included in account Anchor applicators. 27, ‘‘Signals and interlockers.’’ Ballast regulators. NOTE B: The cost of conduits and of poles Cars, lever. and fixtures for telegraph and telephone, or Cars, motor inspection. signal lines shall be included in account 26, Cars, push. ‘‘Communication systems,’’ or account 27, Cars (small), crane, for supply yards and gen- ‘‘Signals and interlockers,’’ as appropriate. eral use. The cost of poles and conduits used for tele- Concrete mixers. graph and telephone or signal lines and for Ditching machines. power-distribution lines shall be included in Dredging machines. the account appropriate according to their Engines, portable. predominant use. Grading outfits. Hydraulic outfits. 35 Miscellaneous structures. Jacks, hydraulic. This account shall include the cost of Pile drivers. all permanent structures not provided Plows, unloading. Rail grinders. for elsewhere, including all fixtures Rail unloaders. and furniture to equip them for use. Rock crushers. Scarifier-inserters. MISCELLANEOUS STRUCTURES ITEMS Spike drivers. Floodlight tower installations in yards. Spike pullers. Grain elevators where grain is stored for Tie tampers. owners. Timber trucks. Storehouses for general purpose materials Trackliners. and supplies. NOTE A: When an important addition and NOTE A: Small storage elevators at way betterment project or the construction of a stations where grain is received for shipment new line necessitates the purchase of road- are classed as station buildings. way machines to be used exclusively there- NOTE B: The cost of grading and preparing on, the cost shall be included in the accounts grounds both before and after the construc- to which the cost of the work is charged. The tion of miscellaneous structures and the cost amount realized from any subsequent sale, of constructing sidewalks, driveways, and or the appraised value of the machines re- fences thereon, shall be included in the cost tained after the completion of the special of the structures. The fees and expenses of work for which they were purchased, shall be architects employed to design or supervise credited to the accounts charged with the the construction of the buildings shall also cost thereof. The appraised value of such ma- be included in the cost of the structures. chines retained shall be debited to this ac- However, the cost of restoring the grounds count and thereafter considered as the cost after addition and betterment work shall be of such property.

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NOTE B: The cost of machines for the count. The carrier shall charge the cost of equipment of roadway shops shall be in- assessments for public improvements which cluded in account 17, ‘‘Roadway buildings.’’ is borne by joint owner tenants to the appro- NOTE C: The cost of roadway machines, priate property accounts other than account such as pile drivers, log loaders, hoist en- 39, ‘‘Public improvements; construction,’’ as- gines, and concrete mixers, when perma- sessments from tenant owners shall be cred- nently mounted for movement on the car- ited to account 795, ‘‘Other capital.’’ The rier’s tracks, shall be included in account 57, owner tenants shall charge their propor- ‘‘Work equipment.’’ tionate share of the assessment to account 721, ‘‘Investments and advances; affiliated 39 Public improvements; construction. companies.’’ The carrier shall charge the appropriate property accounts other than the This account shall include amounts public improvement account for the cost of assessed on carrier property by govern- public improvement assessments borne by mental authority (by mutual agree- nonowner tenants with contra credit to ac- ment or otherwise) to cover the cost of count 38–00–00, ‘‘Purchased services—Joint constructing public improvements, facility—Credit,’’ and the tenants shall when such assessments are made charge their proportionate share of the as- against property within defined areas sessments to account 37–00–00, ‘‘Purchased of taxing districts. The account also services—Joint facility—Debit.’’ NOTE B: The cost to the carrier of main- shall include carrier’s portion of the taining public improvements shall be in- cost of public improvements con- cluded in operating expenses. structed under governmental require- NOTE C: Any portion of the cost of public ments. (See instruction 2–17.) The en- improvements which is included in the gen- tire amount of each assessment and eral tax levy for a regular taxing district other liabilities for public improve- shall be included in the account appropriate ments shall be included in this account for the taxes. NOTE D: The amount of the deferred pay- as soon as the amounts are determined. ments of assessments for public improve- ITEMS ments, if payments are to be made within one year, shall be included in account 763, Cost of land outside carrier’s right-of-way to ‘‘Other current liabilities.’’ If the payments provide for the relocation of streets or are spread over a longer period they shall be highways or providing slopes therefor. credited to account 782, ‘‘Other liabilities.’’ Cost of removal and relocation of buildings The interest paid on such assessments shall and other structures in connection with be included in account 547, ‘‘Interest on un- the construction of streets and highways. funded debt.’’ Curbing streets and highways. NOTE E: Interest imposed for failure to pay Damage to property of others when inci- assessments within the allocated time shall dental to highway construction. be charged to Account 547, Interest on un- Drainage systems. funded debt. Any related penalties shall be Engineering—When such costs apply to charged to Account 551, Miscellaneous in- items chargeable to this account. come charges. Flood protection. NOTE F: Assessments on noncarrier prop- Grading streets and highways. erty for the cost of constructing public im- Guttering streets and highways. provements shall be charged to account 737, Irrigation systems. ‘‘Property used in other than carrier oper- Levees. ations.’’ Overhead highway bridges, including ap- proaches. [42 FR 35017, July 7, 1977, as amended at 52 Paving streets and highways, including such FR 4326, Feb. 11, 1987] pavings at crossings. Planking, highway crossings. 44 Shop machinery. Sewer systems. This account shall include the cost of Sidewalks. Street-lighting systems. machinery and other apparatus in Water works. shops and engine houses, including the NOTE A: The cost of railway facilities in- cost of special foundations and instal- stalled in connection with joint public im- lation and cost of small hand tools nec- provement projects if not in excess of total essary first to equip a shop. costs borne by the carrier shall be included in accounts other than account 39, ‘‘Public LIST OF SHOP MACHINERY improvements; construction,’’ appropriate Ash conveyors. for the class of property installed. Any costs Air compressors. borne by the carrier in excess of the cost of Belting. railway facilities shall be charged to this ac- Blowers.

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Boilers for furnishing power. Mechanical stokers. Boring machines. Metal stacks on boilers. Cars, motor. Refrigerating—machinery and apparatus. Cars, push. Rotary converters. Cranes. Sewer connection for machinery. Drilling machines. Coal-conveying machinery. Drop tables. Forges. Condensers. Framing machines. Cranes. Furnaces. Draft machinery. Grinding and polishing machines. Dynamos. Hoists. Engine-room appliances and tools. Hydraulic jacks. Feed water heaters. Lathes. Special foundations for machines. Lifting magnets. Steam-distribution systems within the Metal chimneys. plant. Milling machines. Switchboards. Motors. Tanks. Pipe cutting and threading machines. Planers. Tractors, trailers, and trucks, permanently Pneumatic hammers. assigned to power plants. Power equipment. Transformers. Punches. Turbines. Riveters. Water meters. Saws. Well pumps. Shafting. NOTE A: The cost of power machinery and Shapers. other apparatus installed in a shop as part of Slotters. the shop equipment shall be included in ac- Stationary engines. count 44, ‘‘Shop machinery.’’ Steam hammers. NOTE B: The cost of power machinery and Vises. other apparatus installed in station and of- Welding machines. fice buildings shall be included in account 16, Woodworking machines. ‘‘Station and office buildings.’’ NOTE A: The cost of power-plant machinery NOTE C: The cost of buildings and the and other apparatus for shop purposes, when power machinery and other apparatus of located in distinct buildings, shall be in- plants used primarily for operating signals cluded in account 45, ‘‘Power-plant machin- and interlockers shall be included in account ery.’’ 27, ‘‘Signals and interlockers.’’ NOTE B: The cost of foundations other than NOTE D: The cost of foundations other than those special to particular machines and those special to particular machines and other apparatus shall be included in the cost other apparatus shall be included in the cost of the building and not in this account. of the building and not in this account. NOTE E: The cost of machinery and build- 45 Power-plant machinery. ings of detached plants for producing power This account shall include the cost of both for operating purposes and for sale shall machinery and other apparatus in be included in this account and in account power plants and substations for gener- 29, ‘‘Power plants,’’ respectively. When ating and transforming power used for plants are intended and used primarily for generating power for sale to noncarriers the the operation of trains and cars or to investment shall be included in account 737, furnish power, heat, and light for sta- ‘‘Property used in other than carrier oper- tions, shops, and general purposes, and ations.’’ also the cost of foundations special to particular machines or other apparatus Equipment including the cost of installation.

ITEMS 50 Equipment. Air compressors. The several primary accounts in- Ash-conveying machinery. cluded in this general account are de- Battery-charging apparatus. signed to show the cost of the several Boiler-room appliances and tools. classes of equipment vehicles and shop Boilers and fittings. Circuit breakers. and power plant equipment owned by Furnaces. the carrier, or held under equipment Ice-manufacturing machinery and apparatus. trust agreements or other contractual Lubricating devices. obligation for purchase of the property.

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52 Locomotives. Charcoal. Coal. (a) This account shall include the Coke. cost of locomotives and tenders pur- Dump (commercial). chased or built by the carrier, and of Express. appurtenances, furniture, and fixtures Flat. necessary to equip them for service, in- Fruit. cluding the cost of inspection, setting Furniture. up, and trying out after receipt from Gondola. builders, and transportation charges to Gondola (hopper). Gondola (long). the carrier’s line. This account may Hay. also include the cost of spare engines Lime. carried on hand for the purpose of tem- Mail. porarily replacing similar units re- Oil tank. moved from locomotives for overhaul, Ore. repair or other reason. Logging. (b) Records shall be maintained to re- Platform. flect separately the investment cost of Polling. Poultry. locomotives on the basis of their ini- Produce. tial identification for depreciation pur- Rack. poses; i.e., road passenger, road freight, Refrigerator. road switching and yard switching. Stock. Tank and water (when used as commercial LIST OF APPURTENANCES TO LOCOMOTIVES cars). Airbrake equipment and hose. Arm rests. LIST OF APPURTENANCES TO FREIGHT-TRAIN Brake fixtures. CARS Cab cushions. Air-brake equipment, including hose. Clocks. Cooking equipment and utensils. Fire-extinguishing apparatus. Heating units. Gongs. Lamps and fixtures. Headlamps. Loading devices. Metallic packing. Refrigeration units. Pneumatic sanding equipment. Seats. Radio equipment, permanently attached. Speed recorders. Seat boxes. Train-signal equipment, including hose. Signal lamps. Water tanks. Speed recorders. Steam-gauge lamps. Steam-heat equipment and hose. 54 Passenger-train cars. Storm doors. This account shall include the cost of Tool boxes. passenger-train cars of all classes, such Train-signal equipment and hose. NOTE: Cars with motor equipment are not as motor-driven cars, purchased or to be classed as locomotives. built by the carrier, including all appurtenances, furniture, and fixtures 53 Freight-train cars. necessary to equip them for service, This account shall include the cost of and cost of inspection and transpor- freight-train cars of all classes, such as tation charges to the carrier’s line. motor-driven cars, purchased or built LIST OF PASSENGER-TRAIN CARS by the carrier, including all appurtenances, furniture, and fixtures nec- Automobile. Baggage. essary to equip them for service, and Baggage-express. the cost of inspection and transpor- Baggage-mail. tation charges to the carrier’s line. Baggage-mail-express. Buffet. LIST OF FREIGHT-TRAIN CARS Cafe, chair, and club. Automobile. Dining. Ballast (commercial). Library. Beer. Milk. Box. Observation. Cabin. Parlor. Caboose. Parlor-baggage.

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Passenger. Trailers. Passenger-baggage. Trucks. Passenger-baggage-mail. Postal. LIST OF APPURTENANCES TO HIGHWAY Refrigerator-express. REVENUE EQUIPMENT Sleeping. Fire extinguishers. Smoking. Heating units. Tourists. Radio communication equipment. Refrigeration units. LIST OF APPURTENANCES TO PASSENGER-TRAIN Rigging equipment. CARS Road dollies. Air-brake equipment including hose. Tarpaulins. Bedding. NOTE: The cost of trucks and tractors, Chairs. which are used exclusively at TOFC/COFC Coat hooks. terminals for loading and unloading trailers Curtains and fixtures. and containers on and from flat cars shall be Cushions. charged to account 25, ‘‘TOFC/COFC termi- Electric bells. nals.’’ Floor coverings. Heating equipment. 56 Floating equipment. Ice boxes. Ice tanks. This account shall include the cost of Kitchen equipment and utensils. marine or floating equipment of all Lighting equipment. kinds except work equipment, pur- Mail catchers. chased or built by the carrier, includ- Parcel racks. ing all appurtenances, furniture, and Ranges and boilers. fixtures necessary to equip it for serv- Seats. Speed recorders. ice, and cost of inspection and trans- Steam-heat hose. portation charges to the carrier’s line. Table china. LIST OF FLOATING EQUIPMENT Table glassware. Table linen. Barges. Table silver. Canal boats. Toilet equipment. Car and other floats. Train-signal equipment, including hose. Ferryboats. Water tanks. Lighters. Power launches. Power lighters. 55 Highway revenue equipment. Scows. (a) This account shall include the Steam boats. cost of highway vehicles used in rev- Steamships. enue transportation service, including Transfer boats. pickup and delivery service, substitute Tugboats. line-haul service, and TOFC/COFC serv- LIST F APPURTENANCES TO FLOATING ice; also the cost of appurtenances EQUIPMENT (such as radio communication equip- Anchors. ment) necessary to equip them for Barometers. service, and the inspection and trans- Beds and bedding. portation costs and charges required Binnacle lamps. for delivery of the vehicles into the Blocks and tackle. carrier’s revenue service. China, crockery, and glassware. (b) Records shall be maintained to Chronometers. identify the carrier’s investment in the Compasses. Desks and furniture. following equipment, including appur- Engines and foundations. tenances: Fire buckets and extinguishers. Floor coverings. LIST OF HIGHWAY REVENUE EQUIPMENT Gangplanks. Bogies. Heating equipment Buses. Hoisting equipment. Chassis. Kitchen equipment. Containers. Life preservers. Semi-trailers. Lighting equipment. Tractors. Linen.

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Logs. Snow drags. Machinery and foundations. Snow plows (moved by but not attached to Masts. locomotives). Boilers and foundations. Sprinkling cars. Cables. Steam shovels. Capstan bars. Steam wrecking derricks. Charts. Supply cars. Pianos and other musical instruments. Sweeper cars. Pumps. Tool cars. Railings. Tool and block cars. Rigging. Water cars. Scales. Weed burners (mounted). Seats, chairs, and cushions. Wrecking cars. Spyglasses and telescopes. Steam distribution systems. LIST OF FLOATING WORK EQUIPMENT Steering equipment. Derricks. Ticket cases. Dredges. Tool boxes and tools. Pile drivers. Tracks on car floats. Ventilating equipment. 58 Miscellaneous equipment. 57 Work equipment. (a) This account shall include the cost of automobiles, trucks and other This account shall include the cost of highway equipment not used in rev- work equipment, including motor-driv- enue transportation service and not en equipment, purchased or built by provided for elsewhere; the cost of air- the carrier; cost of appurtenances, fur- planes; the cost of appurtenances (such niture, and fixtures necessary to equip as radio communication equipment) it for service; and cost of inspection necessary to equip them for service; and transportation charges to the car- and the inspection and transportation rier’s line. costs and charges required for delivery LIST OF RAIL WORK EQUIPMENT of the vehicles to the carrier. (b) The cost of on and/or off-track Air-brake instruction cars. Ballast cars. automotive vehicles, which are perma- Ballast unloader cars. nently equipped with special-purpose Boarding cars. machinery and used exclusively in Bridge cars. maintenance of way and structures, Business cars. shall be charged to account 37, Road- Camp cars. way machines. Cinder cars. Concrete mixers (mounted). LIST OF MISCELLANEOUS EQUIPMENT Derrick cars. Airplanes. Dirt spreaders (mounted). Automobiles. Ditching cars. Buses. Dump cars. Emergency repair vehicles. Dynamometer cars. Road dollies. Gas tank cars. Semi-trailers. Grading cars. Tractors. Gravel cars. Trailers. Indicator cars. Trucks. Locomotive tanks used permanently as Wreckers. water cars. Locomotives. LIST OF APPURTENANCES TO MISCELLANEOUS Officers’ cars. EQUIPMENT Outfit cars. Painters’ cars. Fire extinguisher. Pay cars. Radio communication equipment. Pile drivers (mounted). Rigging equipment. Rail cars. Tarpaulins. Rail saws (mounted). Salt cars. 59 Computer systems and word proc- Sanding cars. essing equipment. Scale test cars. Scraper cars. This account shall include the cost of Snow dozers. mainframe and mini-computers and

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data processing equipment as well as depositaries on unexpended balances) the cost of word processing equipment after such funds become available for that is not dedicated to a particular use and before the receipt or the com- function. Essentially this account con- pletion or coming into service of the sists of all computer-related equipment property so acquired shall be charged that remains under the control of the to this account. data processing department. This ac- (b) When such securities are sold at a count shall also include the cost of premium, the proportion of such pre- foundations, power supply, fixtures, ap- mium assignable to the time between purtenances and other devices to pre- the date of the actual issuance of the pare this equipment for use. securities and the time when the prop- ITEMS erty acquired or the improvement Mainframes, Mini-computers, Word proc- made becomes available for service essing systems, Printers, Monitors, Modems, shall be credited to this account. Storage devices. (c) This account shall also include NOTE A: The cost of micro computers, data such proportion of the discount and ex- processing equipment, and word processing pense on funded debt issued for the ac- equipment which are an integral part of and essential to the operation of a separate facil- quisition of original road, original ity shall be charged to the appropriate prop- equipment, road extensions, additions, erty account for that facility. and betterments, as is equitably as- NOTE B: Carriers desiring to adopt other signable to the period between the date methods of accounting for computers and of the actual issuance of securities and word processing equipment that are considered more suitable for their operational the time when the property acquired or structure shall submit justification and sup- the improvement made become avail- porting documents to the Board for considerable for the service for which it is in- ation and decision. tended. The proportion of discount and [52 FR 4326, Feb. 11, 1987] expense thus chargeable shall be determined by the ratio between the period General Expenditures prior to the completion or coming into service of the facilities or improve- 70 General expenditures. ments acquired and the period of the entire life of the securities issued. The primary accounts of this general account are designed to include ex- NOTE A: Interest on bonds, notes, or other penditures made in connection with evidences of indebtedness accruing before the acquisition and construction of the proceeds from the sale of the securities original road and equipment, and with become available for use shall not be in- extension, additions, and betterments cluded in this account, nor shall there be included any interest accruing after the prop- to road and equipment property, when erty with respect to which the proceeds are such expenditures cannot properly be expended is received or becomes available for included in any of the foregoing ac- use in connection with commercial service. counts as a part of the cost of any spe- NOTE B: If securities issued or assumed by cific work. When assignable, such ex- the carrier are subsequently sold or expenditures shall be included in the cost changed by or for the carrier, the excess of of the property for which the expendi- the par value and accrued interest of the se- tures occurred. curities over the actual money value of the consideration received shall be deemed a dis- 76 Interest during construction. count. In no case (except as provided in the (a) When any bonds, notes, or other third paragraph of this account) shall dis- evidences of indebtedness are sold, or count be included as part of the cost of items any interest-bearing debt is incurred included in the accounts prescribed in this classification. for acquisition and construction of NOTE C: Whenever interest, premium, or original road and equipment, exten- discount assignable to the construction pe- sions, additions, and betterments, the riod is incurred in connection with an ex- interest accruing on the part of the penditure covered by some specific road and debt representing the cost of property equipment account or accounts, such inter- chargeable to road and equipment ac- est, premium, or discount shall be charged counts (less interest, if any, allowed by directly to the specific accounts to which it

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is related. Unless provided for otherwise, in- earnings, or account 606 Other credits to terest costs shall be capitalized in accord- retained earnings. Any amount so au- ance with generally accepted accounting thorized or directed by the Board to be principles. NOTE D: This account shall not include in- cleared and written off to retained interest during the construction period on the come shall be in lieu of amounts in- carrier’s own funds expended in connection cludible in accounts indicated in para- with the acquisition or construction of origi- graph (b). nal road and equipment, extensions, addi- (d) Other plans for clearance, disposi- tions, and betterments. tion, or classification of a balance in (5 U.S.C. 553; 49 U.S.C. 10321) this account in conformity with sound [42 FR 35017, July 7, 1977, as amended at 46 accounting principles may be sub- FR 10920, Feb. 5, 1981] mitted to the Board with suitable details for consideration. This includes Other Property Accounts application for disposition of a balance in this account attributable to reduc- 80 Other elements of investment. tion of capitalization in a reorganiza- (a) This account shall include tion. An accounting procedure so ap- amounts resulting from adjustment of plied for shall become effective only the primary property accounts to con- after Board approval. Each carrier form with cost of property in valuation shall maintain a record of items ini- records. The amount in this account tially included in and cleared later shall be cleared on a consistent basis as from this account and the basis used in property is retired from service or oth- computing such items. erwise in accordance with the rules in NOTE: The amounts attributable to past paragraphs (b), (c), and (d) of this ac- mergers, consolidations and purchases of count. Any material amount in this ac- property included in this account shall be count assignable to property pre- merged with the adjustment made pursuant viously retired from service shall be to paragraph (a) of this text. cleared immediately. (b) When property is retired from 90 Construction in progress. service, an equitable portion of the bal- This account shall include expendi- ance in this account assignable to such tures incurred by the carrier in the property shall be cleared when the re- process of constructing road and equip- tirement entry is made. The amount so ment with its own forces or under con- cleared, when a debit, shall be charged tract during the period prior to the to account 551, Miscellaneous income time property is placed in transpor- charges, or, when a credit, shall be re- tation operations, including cost of corded in account 519, Miscellaneous in- materials and supplies located at point come. The exception to this general of use and of necessary land acquired rule with respect to a credit balance for such projects. When a project is assignable to property retired is that when property classified as depreciable completed or when a segment of a large is retired from service and the balance project is completed and placed in serv- in the accumulated depreciation ac- ice, the cost of the completed project count for the property is materially de- or the completed segment thereof shall ficient, because of sudden retirement be transferred to the appropriate road or other unusual cause, the portion of a and equipment primary accounts. Sep- credit balance cleared for the retire- arate subaccounts may be maintained ment, equal to the deficiency, shall be for road, equipment, or other classes of applied to reduce the amount of loss expenditures. Expenditures for rel- otherwise chargeable to the accumu- atively unimportant projects may be lated depreciation account. included directly in primary accounts. (c) A carrier may apply to the Board for authority to clear the entire balance from this account immediately or amortize the balance over a short period of time by appropriate inclusion in account 616, Other debits to retained

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RAILWAY OPERATING REVENUE (g) Revenue from stop privileges. (h) Revenue from transit privileges. ACCOUNTS (i) Revenue upon the basis of arbitraries out of freight, rates for water transfers Transportation Revenue Accounts (ferriage, lighterage, and floatage). (j) Revenue from transportation of trailers 100 Transportation; rail line. and containers on flat cars in TOFC/COFC service upon the basis of all-rail line-haul The primary accounts included in freight tariff rates and under arrangements this general account are designed to for motor carrier-railroad joint haul, and show amounts of money which the car- from the loading and unloading of trailers rier becomes entitled to receive or and containers on and from flat cars upon which accrue to its benefit from serv- the basis of tariff rates and under arrange- ices rendered in transporting property ments for motor carrier-railroad joint haul. or persons by rail line. The detail ac- ITEMS TO BE CHARGED counts include in this general account series are summarized in account 501, (a) Amounts paid as bridge and ferry Railway Operating Revenues. arbitraries on freight. (b) Amounts paid for completing a haul. [42 FR 35017, July 7, 1977, as amended at 52 (c) Amounts paid for elevation of freight. FR 4326, Feb. 11, 1987] (d) Amounts paid for switching services, in connection with the transportation of 101 Freight. freight, on the basis of switching tariffs, and (a) This account shall include rev- allowances out of through rates, including enue from the transportation of freight amounts paid for switching empty cars in and from transit, stop, and recon- connection with a freight revenue movement. signing privileges, upon the basis of (e) Amounts paid for transferring freight lawful tariff rates. between stations. (b) This account shall include collec- (f) Arbitraries and allowances to others for tions in excess of tariff charges, except lighterage and wharfage. where such amounts are segregated and (g) The carrier’s proportion of overcharges held subject to refund. resulting from the use of erroneous rates, (c) Proceeds derived from the sale of weights, classifications or computations. unclaimed and refused freight which (h) The carrier’s proportion of refunds on has been transported in accordance account of errors in routing and billing. with the contract of shipment shall be (i) The carrier’s proportion of uncollected revenue on freight lost or destroyed in tran- credited to this account in cases where sit. such items can be readily identified. (j) The carrier’s proportion of uncollected Uncollected tariff charges on such ship- tariff charges on damaged shipments for ments shall be charged to this account. which charges neither shipper nor consignee (d) Amounts determined to be is liable. uncollectible shall be accounted for in (k) Amounts paid on basis of tariff rates accordance with the text of account 63– for loading and unloading livestock. 61–00 General—Uncollectible accounts. (l) Amounts paid to motor truck companies for hauling trailers and containers to ITEMS TO BE CREDITED and from TOFC/COFC terminals, and allowances to shippers who perform such service (a) Revenue upon the basis of local freight on the basis of tariff rates. tariff rates, regardless of class of train in which the freight is transported. NOTE A: Amounts paid for switching empty (b) The carrier’s proportion of revenue cars other than in connection with loaded upon the basis of through freight tariff rates, movements shall be charged to operating ex- regardless of class of train on which the pense account 61–32–XX, ‘‘General—Other freight is transported. Expenses—Transportation—Yard—Freight,’’ (c) Revenue from transportation of mail except that amounts paid for switching matter, and empty mail pouches, at freight equipment for repairs shall be included in rates. the appropriate equipment repair accounts. (d) Revenue from transportation of freight NOTE B: Other carriers’ proportion of rev- on special trains at rates based on weights of enue and of uncollectible undercharges paid shipments. by the carrier on account of its errors in (e) Revenue on basis of classifications and routing and billing shall be charged to oper- freight tariffs from transportation of care- ating expense account 61–35–76, ‘‘General— takers of freight shipments. Other Expenses—Transportation—Adminis- (f) Revenue from reconsigning privileges. trative Support.’’

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NOTE C: When a lessee company transports (j) Passenger fare overcharges. freight over the tracks of another carrier on (k) Revenue from transportation of the basis of a proportion of revenues under a corpses, based on passenger fares. joint arrangement, it shall include the entire (l) Revenue from water transfers (ferriage), compensation in its revenues and statistics, bridge tolls, and transfers between railway charging the appropriate joint facility ex- stations or between railway stations and pense and rental accounts with the amounts docks, received as arbitraries in divisions of paid the lessor company, and the lessor com- passenger fares. pany shall credit the corresponding accounts. ITEMS TO BE CHARGED NOTE D: Revenue from the transportation (a) Amounts paid as bridge tolls, and also of caretakers of freight shipments, when not for ferry, depot to depot and depot to dock included as a part of the freight charges on passenger transfer service. the waybill covering the freight shipments, shall be credited to account 102, ‘‘Pas- (b) Amounts paid for switching in com- senger.’’ pleting a passenger transportation move- NOTE E: This account shall be maintained ment. so as to show separately payments and al- (c) Amounts paid for switching empty pas- lowances for (a) terminal collection and de- senger-train cars in connection with trans- livery services when performed in connection portation of passengers. (See note C.) with line-haul transportation of freight on (d) Redemptions of unused and partially the basis of freight tariff rates, further sepa- unused local tickets and redemptions of car- rated between (1) TOFC/COFC service, and (2) rier’s proportions of unused and partially un- all other freight service; also (b) payments used interline tickets. for switching services when performed in (e) Refund of extra fares, cash fare penalty connection with line-haul transportation of collections, and overcharges in excess of tar- freight on the basis of switching tariffs and iff fares. allowances out of freight rates, including the (f) Uncollectible undercharges. switching of empty cars in connection with a NOTE A: Gross receipts from the sale of revenue movement, and (c) payments on mileage tickets, and scrip books shall be basis of tariff rates for loading and unloading credited to a suspense account. The suspense livestock. account shall be charged and this account credited with the value of coupons as hon- 102 Passenger. ored, in connection with any of the services This account shall include the rev- provided for in Items To Be Credited. enue from transportation of passengers NOTE B: When a lessee company transports at passenger tariff fares, from the passengers over the tracks of another company under a joint arrangement upon the transportation of passengers at special basis of a proportion of the passenger rev- fares as provided by law, and from inci- enue, it shall include the entire compensa- dental charges in connection there- tion in its passenger revenue and statistics, with. charging the appropriate joint facility expense and rental accounts with the amounts ITEMS TO BE CREDITED paid the lessor company and the lessor com- (a) Revenue from local passenger fares. pany shall credit the corresponding joint fa- (b) The carrier’s proportion of revenue cility accounts. from interline passenger fares. NOTE C: Amounts paid for switching empty (c) Revenue from extra fares. passenger-train cars other than in connec- (d) Revenue from additional fares or tion with loaded movements, shall be charges for exclusive use of a passenger car, charged to account 61–42–XX. General—Other drawing room, compartment, bedroom, etc. Expenses—Transportation—Yard—Passenger, (e) Revenue from mileage and scrip cou- except that when switched for repairs, the pons honored for all services covered by this amounts paid shall be included in account account. 39–25–45, Purchased Services—Repairs Billed by (f) Revenue from transportation of pas- Others—Equipment—Other Equipment. sengers in special cars or on special trains NOTE D: Amounts determined to be when charge is based on passenger fare per uncollectible shall be accounted for in ac- capita, regardless of the number of pas- cordance with the text of account 63–62–00, sengers actually transported. General—Uncollectible accounts. (g) Revenue from a guaranteed minimum amount not based on per capita fare, for 103 Passenger-related. transportation of passengers on special or chartered trains. This account shall include the rev- (h) Cash fare penalty collections. enue from the transportation of bag- (i) Unclaimed collections and deposits for gage, packages, etc. on passenger transportation of passengers. trains at other than freight or express

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tariff rates. This account shall also in- is made; insurance of freight afloat clude the revenue from berth and seat when billed out at other than cost; accommodations furnished in sleeping, storage of freight afloat; grain overage parlor observation, chair, and other in boats; pumping performed for out- special passenger cars, also the revenue side parties; and from other similar derived from the operation of passenger sources. trains not provided for elsewhere, and (c) To this account shall be charged dining and buffet service. amounts payable to other companies or The amounts recorded in this account individuals for extra lighterage, extra shall not include aid in the form of towing, and for all other service when abatement or forgiveness of taxes, as- such payments represent revenue col- sumption by local governments of sta- lected and credited to this account and tion maintenance costs, and other not a direct expense. similar special indirect benefits, con- NOTE: No revenue shall be included in this tributed by governmental agencies. account for water transfers of passengers or shipments upon the basis of arbitraries out 104 Switching. of rates for transportation involving rail line (a) This account shall include the haul. revenue from switching service upon the basis of lawful tariff rates. To this 106 Demurrage. account shall be credited the carrier’s This account shall include the rev- revenue upon the basis of tariff rates, enue from the detention of cars inci- or the carrier’s allowance out of dent to loading, unloading, recon- through rates, from the switching of signing, and stops in transit upon the cars of all kinds, loaded or empty, ei- basis of lawful tariffs for demurrage. ther locally at a station or within a This account shall also include the rev- switching district, between connecting enue from the detention of trailers and lines, between local industries, or be- containers used in TOFC/COFC service, tween connecting lines and local indus- incident to loading and unloading, tries; revenue upon the basis of distinct upon the basis of tariff rates. tariff rates for trapcar and ferry-car NOTE: This account shall be maintained so service and for spotting cars; also the as to reflect separately (1) revenue from de- revenue from interwork switching at tention of cars, and (2) revenue from deten- industrial plants, and the revenue from tion of trailers and containers used in TOFC/ penalty switching incident to the im- COFC service. proper delivery of cars by other carriers. 110 Incidental. (b) To this account shall be charged This account is designed to show the amounts paid others for switching amounts which the carrier becomes en- when such switching service is pro- titled to receive from services rendered vided for in the switching rate charged incidentally with rail-line and water- by the carrier. line transportation; for the use of fa- NOTE: Penalty switching charges paid by the cilities of which the expenses for oper- carrier shall be included in expense account 61–32–XX, General—Other Expenses—Transpor- ation and maintenance are not sepa- tation—Yard—Freight. rable from railway expenses and from incidental sources not provided for 105 Water transfers. elsewhere. Among the items included (a) This account shall include the in this account are revenues derived revenue, from the transfer by water from (1) hotels and restaurants, (2) op- (ferriage, lighterage, and floatage) of erations conducted at stations and on passenger, freight, vehicles and live- trains by individual or companies other stock, upon the basis of lawful local than railway companies, (3) storage, (4) tariff rates. the sale of electric power, (5) renting (b) This account also shall include property operated and maintained in revenue from water transfers of other connection with the property used in traffic, such as the revenue from tow- the carrier’s transportation operations ing beyond lighterage limits and all and from railway operations not pro- other towing for which an extra charge vided for elsewhere.

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Joint Facility Revenue Accounts pany for the latter’s proportion of expense of maintaining and operating joint facilities, which includes a credit covering the debtor 120 Joint facility. company’s proportion of the revenues from The primary accounts included in operation of such joint facilities, shall indi- this general account are designed to cate separately the proper distribution of show the carrier’s proportion of reve- both the revenues and the expenses included nues collected by others in connection in the bill, and such distribution shall be adhered to by the debtor. with operation of joint facilities and NOTE B: No debits shall be made to this ac- the amount payable by the carrier to count representing amounts creditable by other companies from operation of the operating company to primary accounts joint facilities. 101–103, 105 and 110. 121 Joint facility—credit. OPERATING EXPENSE ACCOUNTS This account shall include the carrier’s proportion of revenue collected by others in connection with the oper- SOURCE: 52 FR 4326, Feb. 11, 1987, unless ation of joint tracks, yards, terminals, otherwise noted. and other facilities, including revenue from hotels, restaurants, grain ele- INSTRUCTION vators, sale of power, and other mis- (1) The operating expense accounts cellaneous operations. use a six-digit code. The first two dig- NOTE A: The purpose of this account is to its denote natural expense, the second show the amounts of revenue from the oper- two digits denote activity/subactivity, ation of joint tracks, yards, terminals and and the third two digits denote de- other facilities operated by other companies, tailed functions. [See Table A for an which under existing contracts or agree- overview of the coding structure and ments are credited by the operating company to the tenant companies which partici- Tables B–E for detailed functions.] pate therein. The bill rendered by any cred- (2) The operating expense account ex- itor company against a debtor company for planations use a three-tier format. Sec- the latter’s proportion of the expense of tion 1 contains natural expense expla- maintenance and operation of joint facili- nations with applicable activity/sub- ties, which includes also a credit covering a activity and function assignment. Sec- proportion of the revenue to be paid over, tion 2 details the activity/subactivity shall show the distribution of the credit for such proportion of the revenue separately explanations. Section 3 explains the from the distribution of the expense of oper- functions appropriate for each activity/ ation. subactivity. To obtain a complete ex- NOTE B: No credits shall be made to this planation for a particular account, account representing amounts creditable by refer to section 1 to locate the natural the operating company to primary accounts expense and activity/subactivity (first 101–103, 105 and 110. four digits) and read the appropriate account text. Accounts that are as- 122 Joint facility—debit. signed to functions are appropriately This account shall include that pro- listed. For further information, refer to portion of revenue from the operation section 2 and section 3. of joint tracks, yards, terminals, and (3) All accounts listed in Table A and other facilities, which is creditable to section 1 are for freight only. Refer to other companies, including revenue Table F for applicable passenger or from hotels, restaurants, grain ele- common account codes. Account num- vators, sale of power, and other mis- bers designated with an asterisk in sec- cellaneous operations. tion 1 denote freight only accounts, NOTE A: The purpose of this account is to while other accounts are used for both show the amount of revenue from operation freight and passenger or common ac- of a terminal company or other carrier counts. which, under the terms of existing contracts (4) All expense assigned to common or agreements covering the joint use of tracks, yards, and other facilities, is credited operating accounts shall be allocated to other carriers that participate in the ben- to freight and passenger accounts in efits from such joint use. The bill rendered accordance with Part 1242 of this chap- by a creditor company against a debtor com- ter.

VerDate Aug<31>2005 10:32 Nov 27, 2006 Jkt 208216 PO 00000 Frm 00080 Fmt 8010 Sfmt 8010 Y:\SGML\208216.XXX 208216 Surface Transportation Board, DOT Pt. 1201 tive eral and 11–61 21–61 41–61 61–61 istra- Gen- admin- 3 3 3 3 tive 11–35 21–35 41–35 61–35 istra- Admin- support 3 3 3 3 Spe- 11–34 21–34 41–34 61–34 SVDS cialized 3 3 3 3 and yard mon 11–33 21–33 41–33 com- Train 3 3 3 2–32 ...... 2–32 52–34 52–35 52–61 12–32 12–33 12–34 12–35 12–61 ...... 37–32 ...... 37–34 37–35 37–61 38–32 38–34 38–35 38–61 11–32 21–32 41–32 61–32 ...... 3 3 3 3 ying the natural expense code (first two digits) to

...... 1 53–32 ...... 1 53–32 53–34 53–35 53–61 ...... 1 31 XX–32 XX–33 XX–34 XX–35 XX–61 XX–34 XX–35 31 XX–32 XX–33 ...... 11–31 21–31 41–31 61–31 Train Yard 3 3 3 3 natural expense [see control column], the second group de- CCOUNTS A function assignment [see Tables B, C, D & E]. 21–23 39–23 ...... 40–23 ...... 41–23 ...... 61–23 ment Other equip- 3 3 3 3 3 XPENSE E cars 11–22 11–23 21–22 39–22 40–22 41–22 61–22 Freight ...... 51–31 51–32 51–33 51–34 ...... 3 3 3 3 3 3 ...... 63–61 ...... 64–61 ...... 11–21 21–21 39–21 40–21 41–21 61–21 PERATING Loco- motive 3 3 3 3 3 3 O ...... 11–13 21–13 39–13 40–13 41–13 61–13 Other AILWAY 3 3 3 3 3 3 R ing 11–12 21–12 39–12 40–12 41–12 61–12 Switch- 3 3 3 3 3 3 ning 11–11 21–11 39–11 40–11 41–11 61–11 Run- TRUCTURE FOR 3 3 3 3 3 3 S ODING XX–00 Way and structures XX–10 Equipment XX–20 Transportation XX–30, 40, 50 XX–60 Control A—C ABLE T ...... XX– XX–22 XX–23 XX–12 XX–13 XX–21 XX–00 XX–11 2 Fringe benefits...... Salaries and wages ...... Fringe 12–00 12–11 12–12 12–13 12–21 12–22 12–23 12–31 11–00 Materiel, tools, supp, fuel, lubricants ...... rentals—DR...... 21–00 Rent—DR...... rentals—CR...... Lease ...... 31–00 31–11 31–12 31–13 31–21 31–22 31–23 Rent—CR...... Fac. Lease ...... 33–00 33–11 33–12 33–13 33–21 33–22 33–23 32–00 32–11 32–12 32–13 32–21 32–22 32–23 Fac. Jt...... 34–00 34–11 34–12 34–13 34–21 34–22 34–23 rents—DR...... Jt. rents—CR...... Other ...... 35–00 35–11 35–12 35–13 35–21 35–22 35–23 facility—DR...... Other ...... 36–00 36–11 36–12 36–13 36–21 36–22 36–23 facility—CR...... Jt. 37–00 37–11 37–12 37–13 37–21 37–22 37–23 37–31 Jt. 38–00 38–11 38–12 38–13 38–21 38–22 38–23 38–31 Repairs billed by others—DR ...... Repairs billed to others—CR ...... 39–00 Other purchase services ...... 40–00 41–00 casualties...... Loss damage claims ...... Other 52–00 52–11 52–12 52–13 52–21 52–22 52–23 52–31 5 51–00 Insurance ...... 53–00 53–11 53–12 53–13 53–21 53–22 53–23 53–3 ...... Other expenses ...... Depreciation ...... 61–00 Uncollectible account...... 62–00 62–11 62–12 62–13 62–21 62–22 62–23 Property taxes ...... 63–00 ...... 64–00 ...... Each operating expense account has a six-digit code divided into three two-digit groups. The first group denotes the The account numbers shown on this matrix are for freight only. passenger and common derived by appl Expenses shall be reported by applicable functions [see account text]. 1 2 3 Freight Personnel ...... 10–00 ...... Materiel ...... 20–00 ...... Purchased services ...... 30–00 ...... Claims and insurance ...... 50–00 ...... General ...... 60–00 ...... the activity codes shown in Table F. Natural expenses are used only same activities as for freight. notes the activity/subactivity for freight, passenger or common service [see Table F]; and third group signifies applicable

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TABLE B—FUNCTION CODE USE—WAY AND STRUCTURES

Running Switching Other Code Functions 1 F P C F P C F P C

ADMINISTRATION 02 Track ...... X X X 03 Bridges and buildings ...... X X X 04 Signals ...... X X X 05 Communications ...... X X X 06 Other ...... X X X REPAIRS AND MAINTENANCE 10 Roadway ...... X X X X X X ...... 11 Tunnels and subways...... X X X X X X ...... 12 Bridges and culverts...... X X X X X X ...... 13 Ties ...... X X X X X X ...... 14 Rails and other track material ...... X X X X X X ...... 16 Ballast ...... X X X X X X ...... 19 Signals and interlockers...... X X X X X X ...... 20 Communication systems ...... X X X 21 Power systems ...... X X X 22 Highway grade crossings...... X X X X X X ...... 23 Station and office buildings ...... X X X 24 Shop bldgs.—Locomotives ...... X X X 25 Shop bldgs.—Freight cars ...... X 26 Shop bldgs.—Other equipment ...... X X X 27 Locomotive servicing facilities ...... X X X 28 Misc. buildings and structures ...... X X X 29 Coal terminals ...... X 30 Ore terminals ...... X 31 TOFC/COFC terminals ...... X 32 Other marine terminals ...... X 33 Motor vehicle loading and distribution facilities ...... X 35 Facilities—Other specialized services operations ...... X 36 Roadway machines ...... X X X 37 Small tools and supplies ...... X X X 38 Snow removal ...... X X X 39 Dismantling retired property...... X X X X X X X X X 48 Road property damaged...... X X X X X X X X X OTHER 99 Other ...... X X X X X X X X X 1 F—Freight; P—Passenger; C—Common.

TABLE C—FUNCTION CODE USE—EQUIPMENT

Locomotives Freight Cars Other Equip- Code Functions ment 1 F P C F P C F P C

ADMINISTRATION 01 Administration...... X X X X ...... X X X REPAIR AND MAINTENANCE 39 Dismantling retired property...... X X X X ...... X X X 41 Locomotives...... X X X ...... 42 Freight cars...... X ...... 43 Trucks, trailers, containers in revenue service ...... X ...... 44 Floating equipment in revenue service ...... X ...... 45 Passenger and other revenue equipment ...... X X X 46 Computer systems and word processing equipment ...... X X X 47 Work and other nonrevenue equipment ...... X X X 48 Equipment damaged...... X X X X ...... X X X 49 Shop machinery—locomotives...... X X X 50 Shop machinery—freight cars ...... X X X 51 Shop machinery—other equipment ...... X X X 99 Other...... X X X X ...... X X X 1 F—Freight; P—Passenger; C—Common.

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...... X ...... X ...... X ...... X ...... X X X ...... X ...... RANSPORTATION ...... X ...... Train Yard Train and yard —T X X X X X X ...... X ...... X ...... X ...... *F P C F P C *F SE ...... X ...... U ...... X ...... X ...... X ...... X ...... X ...... X X ...... X ...... ODE ...... X ...... C ...... X ...... X ...... X ...... X ...... X ...... X UNCTION D—F ABLE T OTHER OPERATIONS ADMINISTRATION 01 ...... 56 Enginecrews...... 57 Train trains...... 58 Dispatching 59 drawbridges...... Operating switches, signals, interlockers, retarders, humps ...... 60 Operating 61 X Highway crossing protection X ...... 62 wrecks...... Train inspection and lubrication ...... 63 Clearing X crews...... X 64 Switch X operations...... X X 65 Controlling X X 66 X fuel...... Yard and terminal clerical67 Locomotive ...... X X .. 68 locomotives...... X Power purchased/produced for motive power ...... 69 Servicing ...... 70 .... Cleaning car interior X ...... 71 Adjusting, transferring loads ...... X 72 Car loading devices and grain doors ...... 73 X Pick up and delivery, marine haul, rail substitute service ...... 74 ...... services...... Loading, unloading, local marine .... X ...... 75 Protective ...... 76 X Clerks and accounting employees ...... 77 . X Communications systems operations ...... 78 ...... Loss and damage claims processing ...... 99 Other ...... Code

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TABLE E—FUNCTIONAL CODE USE—GENERAL AND ADMINISTRATIVE

Code Functions Freight Passenger Common

ADMINISTRATION Administration ...... X X X GENERAL 86 Accounting, auditing, finance ...... X X X 87 Management services and data and word processing ...... X X X 88 Marketing...... X X X 89 Sales ...... X X X 90 Industrial development...... X 91 Personnel, labor relations ...... X X X 92 Legal and secretarial ...... X X X 93 Public relations and advertising ...... X X X 94 Research and development ...... X X X OTHER 99 Other ...... X X X

TABLE F—ACTIVITY/SUBACTIVITY CODE USE

Code pas- Activity/subactivity Freight senger Common

Way and structures: Running ...... 11 14 17 Switching ...... 12 15 18 Other ...... 13 16 19 Equipment: Locomotives ...... 21 24 26 Freight cars ...... 22 N/A N/A Other ...... 23 25 27 Transportation: Train ...... 31 41 51 Yard ...... 32 42 52 Train and yard common ...... 33 43 53 Specialized services ...... 34 N/A N/A Administrative support ...... 35 45 55 General and administrative ...... 61 62 63

OPERATING EXPENSE ACCOUNTS ered direct compensation for time not worked. Amounts of labor billed by Section 1—Natural Expense Explanations* contractors, other companies, and joint facilities, are not considered salaries and wages of the carrier company and Personnel are not to be included in this account group. Its components shall be distrib- Control—10–00–00 uted to the following accounts in ac- This account may be used as a con- cordance with Instruction 1–12. trol account for all accounts in the PERSONNEL Series: Salaries and Wages. Salaries and Wages—Way and Struc- Fringe Benefits Not Included in Com- tures—Running—11–11–XX pensation. This account includes the compensation Salaries and Wages—Control 11–00–00 payable to all repair and maintenance employees and others who are associated with This account series includes the com- the repair and maintenance of the carrier’s pensation payable to employees for roadway and track on the line of road and services performed. It includes outside of classification yards. Compensa- amounts payable in connection with tion payable to officers and technical and profit sharing and stock option plans clerical employees shall only be assigned to that are part of employee compensa- Way and Structures—Other. This account shall be subdivided by the following function. This account series also includes tions: amounts of compensation payable to Repair and Maintenance: employees for paid time off as a fringe Roadway ...... 11–11–10 benefit: Vacation pay, holiday pay, Tunnels and Subways ...... 11–11–11 sick pay, and other payments consid- Bridges and Culverts ...... 11–11–12

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Ties ...... 11–11–13 Locomotive Servicing Facili- Rails and Other Track Mate- ties ...... 11–13–27 rial ...... 11–11–14 Miscellaneous Buildings and Ballast ...... 11–11–16 Structures ...... *11–13–28 Signals and Interlockers ...... 11–11–19 Coal Terminals ...... *11–13–29 Highway Grade Crossings ...... 11–11–22 Ore Terminals ...... *11–13–30 Dismantling Retired Property 11–11–39 TOFC/COFC Terminals ...... *11–13–31 Road Property and Equipment Other Marine Terminals ...... *11–13–32 Damaged ...... 11–11–48 Motor Vehicle Loading and Other—Other ...... 11–11–99 Distribution Facilities ...... *11–13–33 Facilities for Other Special- Salaries and Wages—Way and Struc- ized Services Operations ...... *11–13–35 tures—Switching—11–12–XX Roadway Machines ...... 11–13–36 Snow Removal ...... 11–13–38 This account includes the compensation Dismantling Retired Property 11–13–39 payable to all repair and maintenance employees and others who are associated with Road Property and Equipment the repair and maintenance of the carrier’s Damaged ...... 11–13–48 roadway and track within classification Other—Other ...... 11–13–99 yards and stations. Compensation payable to officers and technical and clerical employees Salaries and Wages—Equipment—Loco- shall be assigned to Way and Structures— motives—11–21–XX Other. This account shall be subdivided by This account includes the compensation the following functions: payable to all officers and technical and cler- Repair and Maintenance: ical employees, repair and maintenance em- Roadway ...... 11–12–10 ployees, and others who are associated with Tunnels and Subways ...... 11–12–11 the repair and maintenance of locomotives, Bridges and Culverts ...... 11–12–12 whether owned by the carrier or by others. Ties ...... 11–12–13 This account shall be subdivided by the fol- Rails and Other Track Mate- lowing functions: rial ...... 11–12–14 Administration—General ...... 11–21–01 Ballast ...... 11–12–16 Repair and Maintenance: Signals and Interlockers ...... 11–12–19 Dismantling Retired Property 11–21–39 Highway Grade Crossings ...... 11–12–22 Locomotives ...... 11–21–41 Dismantling Retired Property 11–12–39 Road Property and Equipment Road Property and Equipment Damaged ...... 11–21–48 Damaged ...... 11–12–48 Other—Other ...... 11–21–99 Other—Other ...... 11–12–99 Salaries and Wages—Equipment— Salaries and Wages—Way and Struc- Freight Cars—11–22–XX* tures—Other—11–13–XX This account includes the compensation This account includes the compensation payable to all officers, technical and clerical payable to all repair and maintenance em- employees, repair and maintenance employ- ployees and others who are associated with ees, and others, who are associated with the the repair and maintenance of the carrier’s repair and maintenance of freight cars, structures other than roadway and track. whether owned by the carrier or by others. Each administration account (functions 02– This account shall be subdivided by the fol- 06) includes the compensation payable to all lowing functions: officers and technical and clerical employees associated with the Way and Structures Ac- Administration—General ...... 11–22–01 tivity. This account shall be subdivided by Repair and Maintenance: the following functions: Dismantling Retired Property 11–22–39 Freight Cars ...... 11–22–42 Administration: Road Property and Equipment Track ...... 11–13–02 Damaged ...... 11–22–48 Bridges and Buildings ...... 11–13–03 Other—Other ...... 11–22–99 Signals ...... 11–13–04 Communications ...... 11–13–05 Salaries and Wages—Equipment—Other Other ...... 11–13–06 Repair and Maintenance: Equipment—11–23–XX Communication Systems ...... 11–13–20 This account includes the compensation Power Systems ...... 11–13–21 payable to all officers, technical and clerical Station and Office Buildings ... 11–13–23 employees, repair and maintenance employ- Shop Buildings—Locomotives 11–13–24 ees, and others, who are associated with the Shop Buildings—Freight Cars *11–13–25 repair and maintenance of equipment other Shop Buildings—Other ...... 11–13–26 than locomotives and freight cars, whether 75

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owned by the carrier or by others. This ac- Clearing Wrecks ...... 11–32–63 count shall be subdivided by the following Switch Crews ...... 11–32–64 functions: Controlling Operations ...... 11–32–65 Administration—General ...... 11–23–01 Yard and Terminal Clerical .... 11–32–66 Repair and Maintenance: Locomotive Fuel ...... 11–32–67 Dismantling Retired Property 11–23–39 Electric Power Purchased/Pro- Trucks, Trailers, Containers duced for Motive Power ...... 11–32–68 in Revenue Service ...... *11–23–43 Servicing Locomotives ...... 11–32–69 Floating Equipment—Revenue Other—Other ...... 11–32–99 Service ...... *11–23–44 Passenger and Other Revenue Salaries and Wages—Transportation— Service ...... 11–23–45 Train and Yard—Common—11–33– Work and Other Non-Revenue Equipment ...... 11–23–47 XX Road Property and Equipment This account includes the compensation Damaged ...... 11–23–48 payable to all officers, performing functions Shop Machinery—Locomotives 11–23–49 incurred on behalf of both train and yard op- Shop Machinery—Other erations. This account shall be subdivided by Equipment ...... 11–23–51 the following functions: Other—Other ...... 11–23–99 Operations: Cleaning Car Interiors ...... 11–33–70 Salaries and Wages—Transportation— Adjusting and Transferring Train—11–31–XX Loads ...... *11–33–71 This account includes the compensation Car Loading Devices and payable to all officers, technical and clerical Grain Doors ...... *11–33–72 employees, engine and train crews, and other operational employees, who are associated Salaries and Wages—Transportation— with the dispatching and operation of freight Specialized Services—11–34–XX* trains over the roadway and outside of classification yards. This account shall be sub- This account includes the compensation divided by the following functions: payable to all officers, technical and clerical employees, and other operational employees Administration—General ...... 11–31–01 who are associated with operating services Operations: which are specialized in nature and in cost Engine Crews ...... 11–31–56 characteristics. The specialized services des- Train Crews ...... 11–31–57 ignated by the Board appear within the ex- Dispatching Trains ...... 11–31–58 planation of activities/subactivities. This ac- Operating Switches, Signals, count shall be subdivided by the following Interlockers, Retarders, functions: Humps ...... 11–31–59 Operating Drawbridges ...... 11–31–60 Administration—General ...... 11–34–01 Highway Crossing Protection 11–31–61 Operations: Train Inspection and Lubrica- Pick Up and Delivery, Marine tion ...... 11–31–62 Line Haul, and Rail Sub- Clearing Wrecks ...... 11–31–63 stitute Service ...... 11–34–73 Locomotive Fuel ...... 11–31–67 Loading, Unloading, and Local Electric Power Purchased/Pro- Marine ...... 11–34–74 duced for Motive Power ...... 11–31–68 Protective Services ...... 11–34–75 Servicing Locomotives ...... 11–31–69 Other—Other ...... 11–34–99 Other—Other ...... 11–31–99 Salaries and Wages—Transportation— Salaries and Wages—Transportation— Administrative Support—11–35–XX Yard—11–32–XX This account includes the compensation This account includes the compensation payable to all officers, are associated with payable to all officers, technical and clerical providing direct administrative support for employees, engine and train crews, and other the Transportation Activity. For further operational employees, who are associated clarification refer to the explanation of the with the movement of freight cars within Administrative Support Operations Sub- classification yards and in terminal switch- activity. Each account shall be subdivided by ing and transfer service. This account shall the following functions: be subdivided by the following functions: Administration—General ...... 11–35–01 Administration—General ...... 11–32–01 Operations: Operations: Clerical and Accounting Em- Operating Switches, Signals, ployees ...... 11–35–76 Interlockers, Retarders, Communication Systems Op- Humps ...... 11–32–59 erations ...... 11–35–77 76

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Loss and Damage Claims Proc- Fringe Benefits Not Included in essing ...... 11–35–78 Compensation—Way and Struc- Other—Other ...... 11–35–99 tures—Switching ...... 12–12–00 Fringe Benefits Not Included in Salaries and Wages—General and Ad- Compensation—Way and Struc- ministrative—11–61–XX tures—Other ...... 12–13–00 Fringe Benefits Not Included in This account includes the compensation Compensation—Equipment Lo- payable to all employees who are associated comotives ...... 12–21–00 with overall administration or other general Fringe Benefits Not Included in support for carrier operations. Overall ad- Compensation—Equipment— ministration includes executive, legal, finan- Freight Cars ...... *12–22–00 cial, treasury, accounting, budgeting, taxation, corporate planning, costing, mar- Fringe Benefits Not Included in keting, advertising, traffic, corporate sec- Compensation—Equipment— retary, public relations, real estate, insur- Other Equipment ...... 12–23–00 ance administration, personnel administra- Fringe Benefits Not Included in tion, pension plan administration, general Compensation—Transpor- purchasing, labor relations, internal audit- tation—Train ...... 12–31–00 ing, industrial engineering, and regulatory Fringe Benefits Not Included in reporting. For further clarification refer to Compensation—Transpor- the explanation of the General and Adminis- tation—Yard ...... 12–32–00 trative Activity. This account shall be sub- Fringe Benefits Not Included in divided by the following functions: Compensation—Transpor- tation—Train and Yard Common 12–33–00 Administration—General ...... 11–61–01 Fringe Benefits Not Included in General: Compensation—Transpor- Accounting, Auditing, Finance 11–61–86 tation—Specialized Services ...... 12–34–00 Marketing ...... 11–61–88 Fringe Benefits Not Included in Sales ...... 11–61–89 Compensation—Transpor- Industrial Development ...... *11–61–90 tation—Administrative Support 12–35–00 Personnel and Labor Relations 11–61–91 Fringe Benefits Not Included in Legal and Secretarial ...... 11–61–92 Compensation—General and Ad- Public Relations and Adver- ministrative ...... 12–61–00 tising ...... 11–61–93 Research and Development ..... 11–61–94 Materiel Control—20–00–00 Other—Other ...... 11–61–99 This account may be used as a con- Fringe Benefits Not Included in Com- trol account for the MATERIEL series: pensation—Control—12–00–00 Materials, Tools, Supplies, Fuels, Lu- This account series includes amounts bricants. payable to others, or other costs Materials, Tools, Supplies, Fuels, Lubri- charged to expense, for employee benefits which are not considered part of di- cants—Control—21–00–00 rect compensation. These benefits in- This account group includes the cost clude the carrier portions of Railroad of items installed or commodities con- Retirement contributions, pension ex- sumed which are charged to expense in pense, unemployment taxes, dental connection with carrier operations. plans, health plans, hospitalization in- This account group includes charges to surance, life insurance, subsidies for expense for all materials, small tools, employee lunchrooms, company enter- supplies, fuels, lubricants, purchased tainment facilities for personal use, standard stationery and forms, freight- and other benefits to employees that in on materials and supplies, and simi- are not includible in direct compensa- lar items. This account group excludes tion. They exclude travel expense on purchased services such as utilities, company business, casualties, work- communications, postage and other men’s compensation, as well as dues, items of similar nature. Its compo- memberships, and similar items when nents shall be distributed to the fol- the direct beneficiary is clearly the company rather than the employee. lowing accounts: Fringe Benefits Not Included in Compensation—Way and Struc- tures—Running ...... 12–11–00 77

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Materials, Tools, Supplies, Fuels, Lubri- Materials, Tools, Supplies, Fuels, Lubri- cants—Way and Structures—Run- cants—Way and Structures— ning—21–11–XX Other—21–13–XX

This account includes the cost of items in- This account includes the cost of items installed or commodities consumed which are stalled or commodities consumed which are charged to expense, where such items are charged to expense, where such items are consumed in the performance or support of consumed in the performance or support of the repair and maintenance of the carrier’s the repair and maintenance of the carrier’s roadway and track on the line of the road structures not provided for in running or and outside of classification yards. Each ac- switching. Each account includes charges to count includes charges to expense for all ma- expense for all materials, small tools, sup- terials, small tools, supplies, fuels, lubri- plies, fuels, lubricants, purchased standard cants, purchased standard stationery and stationery and forms, freight-in on materials forms, freight-in on materials, and supplies, and supplies, and similar items. Its compo- and similar items. Its components shall be nents shall be distributed to the following distributed to the following functions in ac- functions in accordance with Instruction 1– cordance with Instruction 1–18: 18: Repair and Maintenance: Administration: Track ...... 21–13–02 Roadway ...... 21–11–10 Bridges and Buildings ...... 21–13–03 Tunnels and Subways ...... 21–11–11 Signals ...... 21–13–04 Bridges and Culverts ...... 21–11–12 Communications ...... 21–13–05 Ties ...... 21–11–13 Other ...... 21–13–06 Rails and Other Track Mate- Repair and Maintenance: rial ...... 21–11–14 Communication Systems ...... 21–13–20 Ballast ...... 21–11–16 Power Systems ...... 21–13–21 Signals and Interlockers ...... 21–11–19 Station and Office Buildings ... 21–13–23 Dismantling Retired Property 21–11–39 Shop Buildings—Locomotives 21–13–24 Road Property and Equipment Shop Buildings—Freight Cars *21–13–25 Damaged ...... 21–11–48 Shop Buildings—Other Equip- Other—Other ...... 21–11–99 ment ...... 21–13–26 Locomotive Servicing Facili- ties ...... 21–13–27 Materials, Tools, Supplies, Fuels, Lubri- Coal Terminals ...... *21–13–29 cants—Way and Structures— Ore Terminals ...... *21–13–30 Switching—21–12–XX TOFC/COFC Terminals ...... *21–13–31 Other Marine Terminals ...... *21–13–32 Motor Vehicle Loading and This account includes the cost of items in- Distribution Facilities ...... *21–13–33 stalled or commodities consumed which are Facilities for Other Special- charged to expense, where such items are ized Services Operations ...... *21–13–35 consumed in the performance or support of Roadway Machines ...... 21–13–36 the repair and maintenance of the carrier’s Snow Removal ...... 21–13–38 roadway and track within classification Dismantling Retired Property 21–13–39 yards and stations. This account includes Road Property and Equipment charges to expense for all materials, small Damaged ...... 21–13–48 tools, supplies, fuels, lubricants, purchased Other—Other ...... 21–13–99 standard stationery and forms, freight-in on materials and supplies, and similar items. Its components shall be distributed to the fol- Materials, Tools, Supplies, Fuels, Lubri- lowing functions in accordance with Instruc- cants—Equipment—Locomotives— tion 1–18: 21–21–XX Repair and Maintenance: Roadway ...... 21–12–10 This account includes the cost of items in- Tunnels and Subways ...... 21–12–11 stalled or commodities consumed which are charged to expense, where such items are Bridges and Culverts ...... 21–12–12 consumed in the performance or support of Ties ...... 21–12–13 the repair and maintenance of locomotives, Rails and Other Track Mate- whether owned by the carrier or by others. rial ...... 21–12–14 This account includes charges to expense for Ballast ...... 21–12–16 all materials, small tools, supplies, fuels, lu- Signals and Interlockers ...... 21–12–19 bricants, purchased standard stationery and Highway Grade Crossings ...... 21–12–22 forms, freight-in on materials and supplies, Dismantling Retired Property 21–12–29 and similar items. Its components shall be Road Property and Equipment distributed to the following functions in ac- Damaged ...... 21–12–48 cordance with Instruction 1–18:

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Administration—General ...... 21–21–01 Shop Machinery—Locomotives 21–23–49 Repair and Maintenance: Shop Machinery—Freight Cars *21–23–50 Locomotives ...... 21–21–41 Shop Machinery—Other Road Property and Equipment Equipment ...... 21–23–51 Damaged ...... 21–21–48 Other—Other ...... 21–23–99 Other—Other ...... 21–21–99 Materials, Tools, Supplies, Fuels, Lubri- Materials, Tools, Supplies, Fuels, Lubri- cants—Transportation—Train—21– cants—Equipment—Freight Cars— 31–XX 21–22–XX* This account includes the cost of items in- This account includes the cost of items installed or commodities consumed which are stalled or commodities consumed which are charged to expense, where such items are charged to expense, where such items are consumed in association with the dis- consumed in the performance or support of patching and operation of freight trains over the repair and maintenance of freight-cars, the charges to expense for all materials, whether owned by the carrier or by others. small tools, supplies, fuels, lubricants, pur- This account includes charges to expense for chased standard stationery and forms, all materials, small tools, supplies, fuels, lu- freight-in on materials and supplies, and bricants, purchased standard stationery and similar items. Its components shall be dis- forms, freight-in on materials and supplies, tributed to the following functions in accord- and similar items. Its components shall be ance with Instruction 1–18: distributed to the following functions in ac- Administration—General ...... 21–31–01 cordance with Instruction 1–18: Operations: Engine Crews ...... 21–31–56 Administration—General ...... 21–22–01 Train Crews ...... 21–31–57 Repair and Maintenance: Dispatching Trains ...... 21–31–58 Dismantling Retired Property 21–22–39 Operating Switches, Signals, Freight Cars ...... 21–22–42 Interlockers, Retarders, Road Property and Equipment Humps ...... 21–31–59 Damaged ...... 21–22–48 Operating Drawbridges ...... 21–31–60 Other—Other ...... 21–22–99 Highway Crossing Protection 21–31–61 Train Inspection and Lubrica- Materials, Tools, Supplies, Fuels, Lubri- tion ...... 21–31–62 cants—Equipment—Other Equip- Clearing Wrecks ...... 21–31–63 ment—21–23–XX Locomotive Fuels ...... 21–31–67 Electric Power Purchased/Pro- This account includes the cost of items in- duced for Motive Power ...... 21–31–68 Servicing Locomotives ...... 21–31–69 stalled or commodities consumed which are Other—Other ...... 21–31–99 charged to expense, where such items are consumed in the performance or support of the repair and maintenance of equipment by Materials, Tools, Supplies, Fuels, Lubri- others. This account includes charges to ex- cants—Transportation—Yard—21– pense for all materials, small tools, supplies, 32–XX fuels, lubricants, purchased standard stationery and forms, freight-in on materials This account includes the cost of items in- and supplies, and similar items. Its compo- stalled or commodities consumed which are nents shall be distributed to the following charged to expense, where such items are functions in accordance with Instruction 1– consumed in and in terminal switching and 18: transfer service. This account includes Administration—General ...... 21–23–01 charges to expense for all materials, small Repair and Maintenance: tools, supplies, fuels, lubricants, purchased Dismantling Retired Property 21–23–39 standard stationery and forms, freight-in on Trucks, Trailers, Containers materials and supplies, and similar items. Its in Revenue Service ...... *21–23–43 components shall be distributed to the fol- Floating Equipment—Revenue lowing functions in accordance with Instruc- Service ...... *21–23–44 tion 1–18: Passenger and Other Revenue Administration—General ...... 21–32–01 Equipment ...... 21–23–45 Operations: Computer Systems and Word Operating Switches, Signals, Processing Equipment ...... 21–23–46 Interlockers, Retarders, Work and Other Non-Revenue Humps ...... 21–32–59 Equipment ...... 21–23–47 Clearing Wrecks ...... 21–32–63 Road Property and Equipment Switch Crews ...... 21–32–64 Damaged ...... 21–23–48 Controlling Operations ...... 21–32–65 79

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Yard and Terminal Clerical .... 21–32–66 Administration—General ...... 21–35–01 Locomotive Fuel ...... 21–32–67 Operations: Electric Power Purchased/Pro- Clerks, Accounting Employees 21–35–76 duced for Motive Power ...... 21–32–68 Communication Systems Op- Servicing Locomotives ...... 21–32–69 erations ...... 21–35–77 Other—Other ...... 21–32–99 Loss and Damage Claims Proc- essing ...... 21–35–78 Materials, Tools, Supplies, Fuels, Lubri- Other—Other ...... 21–35–99 cants—Transportation—Train and Yard Common—21–33–XX Materials, Tools, Supplies, Fuels, Lubri- cants—General and Administra- This account includes the cost of items in- tive—21–61–XX stalled or commodities consumed which are This account includes the cost of items in- charged to expense, where such items are stalled or commodities consumed which are consumed on behalf of both train and yard charged to expense, where such items are operations. This account includes charges to consumed in providing overall administra- expense for all materials, small tools, sup- tion or other general support for carrier op- plies, fuels, lubricants, supplies, and similar erations. For further clarification refer to items. Its components shall be distributed to the definition of the General and Adminis- the following functions in accordance with trative Activity. This account shall be sub- Instruction 1–18: divided by the following functions: Operations: Administration—General ...... 21–61–01 Cleaning Car Interiors ...... 21–33–70 General: Adjusting, Transferring *21–33–71 Accounting, Auditing, Finance 21–61–86 Loads. Management Services and Car Loading Devices and *21–33–72 Data and Word Processing ... 21–61–87 Grain Doors. Marketing ...... 21–61–88 Sales ...... 21–61–89 Materials, Tools, Supplies, Fuels, Lubri- Industrial Development ...... *21–61–90 cants—Transportation—Specialized Legal and Secretarial ...... 21–61–92 Services—21–34–XX* Public Relations and Adver- tising ...... 21–61–93 Research and Development ..... 21–61–94 This account includes the cost of items in- Other—Other ...... 21–61–99 stalled or commodities consumed which are charged to expense, where such items are Purchased Services consumed in operating services which are specialized in nature and in cost characteristics. The specialized services designated by Control—30–00–00 the Board appear within the explanation of This account may be used as a con- specialized services. This account shall be trol account for all accounts in the subdivided by the following functions: PURCHASED SERVICES series: Administration—General ...... 21–34–01 Operations: Lease Rentals—Dr. Pick Up and Delivery, Marine Lease Rentals—Cr. Line Haul, and Rail Sub- Joint Facility Rent—Dr. stitute Service ...... 21–34–73 Joint Facility Rent—Cr. Loading, Unloading, and Local Other Rents—Dr. Marine ...... 21–34–74 Other Rents—Cr. Protective Services ...... 21–34–75 Joint Facility—Dr. Other—Other ...... 21–34–99 Joint Facility—Cr. Repairs Billed by Others—Dr. Materials, Tools, Supplies, Fuels, Lubri- Repairs Billed to Others—Cr. Other Purchased Services cants—Transportation—Administra- tive Support—21–35–XX Lease Rentals—Debit—Control—31–00– 00 This account includes the cost of items installed or commodities consumed which are This account series includes the rent- charged to expense, where such items are als of road property and equipment consumed in association with providing di- with terms of 30 days or more. This ac- rect administrative support for the Trans- count excludes joint facility and joint portation Activity. For further clarification trackage rents, insurance and mainte- refer to the explanation of the Administra- tive Support Operations Subactivity. This nance elements of lease payments, and account shall be subdivided by the following all elements of capital leases as defined functions: in FASB Statement No. 13. Capitalized 80

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leases shall be included in the applica- property jointly used shall be charged ble property account for the particular to this account. asset leased [See Instruction 2–11b]. The cost of maintenance, operation, The components of this natural ex- or administration of joint facilities, pense will be distributed to the fol- chargeable to the accounting company, lowing accounts in accordance with In- shall be charged to the various joint fa- struction 1–18: cility accounts (37–XX–00). When the Lease Rentals—Dr.—Way and compensation for the use of joint fa- Structures—Running ...... 31–11–00 cilities is a fixed amount or is based Lease Rentals—Dr.—Way and upon a charge per passenger, ton, car, Structures—Switching ...... 31–12–00 or other unit, it shall be fairly appor- Lease Rentals—Dr.—Way and tioned between this account and Joint Structures—Other ...... 31–13–00 Lease Rentals—Dr.—Equipment— Facility—Dr. (37–XX–00). This appor- Locomotives ...... 31–21–00 tionment shall be made by the oper- Lease Rentals—Dr.—Equipment— ating company and shall be followed by Freight Cars ...... *31–22–00 the accounting company. Lease Rentals—Dr.—Equipment— The components of this natural ex- Other Equipment ...... 31–23–00 pense consist of the following accounts: Lease Rentals—Credit—Control—32–00– Joint Facility Rents—Dr.—Way and Structures—Running ...... 33–11–00 00 Joint Facility Rents—Dr.—Way This account group includes the rent- and Structures—Switching ...... 33–12–00 als of owned property and equipment or Joint Facility Rents—Dr.—Way subleases of leased road property and and Structures—Other ...... 33–13–00 equipment with terms of from 30 days Joint Facility Rents—Dr. Equip- ment—Locomotives ...... *33–21–00 to one year. Longer term leases are in- Joint Facility Rents—Dr. Equip- dicative of a noncarrier operation and ment—Freight Cars ...... *33–22–00 all revenues and expenses related to Joint Facility Rents—Dr. Equip- such property and equipment should be ment—Other Equipment ...... 33–23–00 classified accordingly and excluded from railroad operations. This account Joint Facility Rents—Credit—Control— excludes joint facilities and joint 34–00–00 trackage, capital leases, and portions This account series includes amounts of lease receipts covering maintenance receivable accrued for rent of equip- and insurance. The components of this ment, tracks, yards, terminals and natural expense account will be distrib- other facilities owned or controlled by uted to the following accounts in ac- the accounting company and used cordance with Instruction 1–18: jointly with other companies or indi- Lease Rentals—Cr.—Way and viduals. Amounts receivable from other Structures—Running ...... 32–11–00 companies in reimbursement for taxes Lease Rentals—Cr.—Way and on property jointly used shall be cred- Structures—Switching ...... 32–12–00 ited to this account. Lease Rentals—Cr.—Way and Structures—Other ...... 32–13–00 The portion of the cost of mainte- Lease Rentals—Cr.—Equipment— nance, operation, or administration of Locomotives ...... 32–21–00 joint facilities recoverable from others Lease Rentals—Cr.—Equipment— shall be credited to the various joint Freight Cars ...... *32–22–00 facility accounts (38–XX–00). When the compensation for the use of joint fa- Joint Facility Rents—Debits—Control— cilities is a fixed amount or is based 33–00–00 upon a charge per passenger, ton, car, This account group includes amounts or other unit, it shall be fairly appor- payable accrued as rent for equipment, tioned by the creditor between this ac- tracks, yards, terminals, and other fa- count and Joint Facility—Cr. (38–XX– cilities owned or controlled by other 00). carriers, companies, or individuals, and The components of this account se- in the joint use of which the account- ries shall be distributed to the fol- ing company participates. Amounts lowing accounts: paid or payable by the accounting com- Joint Facility Rents—Cr.—Way pany in reimbursement for taxes on and Structures—Running ...... 34–11–00

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Joint Facility Rents—Cr.—Way Joint Facility—Debit—Control—37–00– and Structures—Switching ...... 34–12–00 00 Joint Facility Rents—Cr.—Way This account includes joint trackage and Structures—Other ...... 34–13–00 and joint facility costs, exclusive of Joint Facility Rents—Cr.—Equip- ment—Locomotives ...... *34–21–00 rents, payable by the railroad to oth- Joint Facility Rents—Cr.—Equip- ers. The components of this account ment—Freight Cars ...... *34–22–00 will be distributed to the following ac- Joint Facility Rents—Cr.—Equip- counts in accordance with Instruction ment—Other Equipment ...... 34–23–00 1–18: Joint Facility—Dr.—Way and Other Rents—Debit—Control—35–00–00 Structures—Running ...... 37–11–00 Joint Facility—Dr.—Way and This account group includes the Structures—Switching ...... 37–12–00 rents with terms of less than 30 days Joint Facility—Dr.—Way and which are not renewed. This account Structures—Other ...... 37–13–00 includes all time and mileage pay- Joint Facility—Dr.—Equipment— ments for interchange locomotive, Locomotives ...... 37–21–00 freight car, and other revenue equip- Joint Facility—Dr.—Equipment— Freight Cars ...... *37–22–00 ment hire. The components of this ac- Joint Facility—Dr.—Equipment— count will be distributed to the fol- Other Equipment ...... 37–23–00 lowing accounts in accordance with In- Joint Facility—Dr.—Transpor- struction 1–18: tation—Train ...... 37–31–00 Joint Facility—Dr.—Transpor- Other Rents—Dr.—Way and Struc- tation—Yard ...... 37–32–00 tures—Running ...... 35–11–00 Joint Facility—Dr.—Transpor- Other Rents—Dr.—Way and Struc- tation—Specialized Services ...... *37–34–00 tures—Switching ...... 35–12–00 Joint Facility—Dr.—Transpor- Other Rents—Dr.—Way and Struc- tation—Administrative Support 37–35–00 tures—Other ...... 35–13–00 Joint Facility—Dr.—General and Other Rents—Dr.—Equipment— Administrative ...... 37–61–00 Locomotives ...... 35–21–00 Other Rents—Dr.—Equipment— Joint Facility—Credit—Control—38–00– Freight Cars ...... *35–22–00 00 Other Rents—Dr.—Equipment— Other Equipment ...... 35–23–00 This account group includes joint trackage and joint facility costs, exclu- Other Rents—Credit—Control—36–00– sive of rents, payable by others to the 00 railroad. The components of this account will be distributed to the fol- This account includes rents with lowing accounts in accordance with In- terms of less than 30 days which are struction 1–18: not renewed. This account includes all Joint Facility—Cr.—Way and time and mileage receipts for inter- Structures—Running ...... 38–11–00 changed locomotive, freight car, and Joint Facility—Cr.—Way and other revenue equipment hire. The Structures—Switching ...... 38–12–00 components of this account will be dis- Joint Facility—Cr.—Way and tributed to the following accounts in Structures—Other ...... 38–13–00 Joint Facility—Cr.—Equipment— accordance with Instruction 1–18: Locomotives ...... 38–21–00 Other Rents—Cr.—Way and Struc- Joint Facility—Cr.—Equipment— tures—Running ...... 36–11–00 Freight Cars ...... *38–22–00 Other Rents—Cr.—Way and Struc- Joint Facility—Cr.—Equipment— tures—Switching ...... 36–12–00 Other Equipment ...... 38–23–00 Other Rents—Cr.—Way and Struc- Joint Facility—Cr.—Transpor- tures—Other ...... 36–13–00 tation—Train ...... 38–31–00 Other Rents—Cr.—Equipment— Joint Facility—Cr.—Transpor- Locomotives ...... 36–21–00 tation—Yard ...... 38–32–00 Other Rents—Cr.—Equipment— Joint Facility—Cr.—Transpor- Freight Cars ...... *36–22–00 tation—Specialized Services ...... *38–34–00 Joint Facility—Cr.—Transpor- Other Rents—Cr.—Equipment— tation—Administrative Support 38–35–00 Other Equipment ...... 36–23–00 Joint Facility—Cr.—General and Administrative ...... 38–61–00

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Repairs Billed by Others—Debit—Con- roadway and track. This account shall be trol—39–00–00 subdivided by the following functions: Repair and Maintenance: This account group includes amounts Communication Systems ...... 39–13–20 payable by the railroad to others for Power Systems ...... 39–13–21 repair and maintenance of the report- Station and Office Buildings ... 39–13–23 ing railroad’s property and equipment. Shop Buildings—Locomotives 39–13–24 The components of this account shall Shop Buildings—Freight Cars *39–13–25 be distributed to the following ac- Shop Buildings—Other Equip- counts in accordance with Instruction ment ...... 39–13–26 Locomotive Servicing Facili- 1–18: ties ...... 39–13–27 Miscellaneous Buildings and Repairs Billed by Others—Dr.—Way Structures ...... 39–13–28 and Structures—Running—39–11– Coal Terminals ...... *39–13–29 XX Ore Terminals ...... *39–13–30 This account includes amounts payable by TOFC/COFC Terminals ...... *39–13–31 Other Marine Terminals ...... *39–13–32 the railroad to others for repair and mainte- Motor Vehicle Loading and nance of the reporting railroad’s property as- Distribution Facilities ...... *39–13–33 sociated with the carrier’s roadway and Facilities for Other Special- track on the line of road and outside of clas- ized Services Operations ...... *39–13–35 sification yards. This account shall be sub- Roadway Machines ...... 39–13–36 divided by the following functions: Snow Removal ...... 39–13–38 Repair and Maintenance: Road Property and Equipment Roadway ...... 39–11–10 Damaged ...... 39–13–48 Tunnels and Subways ...... 39–11–11 Bridges and Culverts ...... 39–11–12 Repairs Billed by Others—Dr.—Equip- Ties ...... 39–11–13 ment—Locomotives—39–21–XX Rails and Other Track Mate- rial ...... 39–11–14 This account includes amounts payable by Ballast ...... 39–11–16 the railroad to others for repair and mainte- Signals and Interlockers ...... 39–11–19 nance under the Locomotive subactivity. Highway Grade Crossings ...... 39–11–22 This account shall be subdivided by the fol- Road Property and Equipment lowing functions: Damaged ...... 39–11–48 Repair and Maintenance: Locomotives ...... 39–21–41 Repairs Billed by Others—Dr.—Way Road Property and Equipment and Structures—Switching—39–12– Damaged ...... 39–21–48 XX Repairs Billed by Others—Dr.—Equip- This account includes amounts payable by ment—Freight Cars—39–22–XX* the railroad to others for repair and maintenance of the reporting railroad’s property as- This account includes amounts payable by sociated with the carrier’s roadway and the railroad to others for repair and mainte- track within classification yards and sta- nance under the Freight Car subactivity. tions. This account shall be subdivided by This account shall be subdivided by the fol- the following functions: lowing functions: Repair and Maintenance: Repair and Maintenance: Roadway ...... 39–12–10 Freight Cars ...... 39–22–42 Tunnels and Subways ...... 39–12–11 Road Property and Equipment Bridges and Culverts ...... 39–12–12 Damaged ...... 39–22–48 Ties ...... 39–12–13 Rails and Other Track Mate- Repairs Billed by Others—Dr.—Equip- rial ...... 39–12–14 ment Other Equipment—39–23–XX Ballast ...... 39–12–16 This account includes amounts payable by Signals and Interlockers ...... 39–12–19 the railroad to others for the repair and Highway Grade Crossings ...... 39–12–22 maintenance of equipment not pertaining to Road Property and Equipment the Locomotive or Freight Car subactivity. Damaged ...... 39–12–48 This account shall be subdivided by the following functions: Repairs Billed by Others—Dr.—Way and Structures—Other—39–13–XX Repair and Maintenance: Trucks, Trailers, and Con- This account includes amounts payable by tainers in Revenue Service .. *39–23–43 the railroad to others for repair and mainte- Floating Equipment—Revenue nance of the carrier’s structures other than Service ...... *39–23–44

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Passenger and Other Revenue Repairs Billed to Others—Cr.—Way and Equipment ...... 39–23–45 Structures—Other—40–13–XX Computer Systems and Word Processing Equipment ...... 39–23–46 This account includes amounts payable by Work and Other Non-Revenue others to the railroad for repair and mainte- Equipment ...... 39–23–47 nance of other railroads’ structures other Road Property and Equipment than roadway and track. This account shall Damaged ...... 39–23–48 be subdivided by the following functions: Shop Machinery—Locomotives 39–23–49 Repair and Maintenance: Shop Machinery—Freight Cars *39–23–50 Communication Systems ...... 40–13–20 Shop Machinery—Other Power Systems ...... 40–13–21 Equipment ...... 39–23–51 Station and Office Buildings ... 40–13–23 Shop Buildings Locomotives .. 40–13–24 Repairs Billed to Others—Cr.—Control Shop Buildings—Freight Cars *40–13–25 40–00–00 Shop Buildings—Other Equip- ment ...... 40–13–26 This account series includes amounts Locomotive Servicing Facili- payable by others to the railroad for ties ...... 40–13–27 repair and maintenance of others’ road Miscellaneous Buildings and property and equipment. The compo- Structures ...... 40–13–28 nents of this account shall be distrib- Coal Terminals ...... *40–13–29 uted to the following accounts in ac- Ore Terminals ...... *40–13–30 cordance with Instruction 1–18: TOFC/COFC Terminals ...... *40–13–31 Other Marine Terminals ...... *40–13–32 Repairs Billed to Others—Cr.—Way and Motor Vehicle Loading and Structures—Running—40–11–XX Distribution Facilities ...... *40–13–33 Facilities for Other Special- This account includes amounts payable by ized Services Operations ...... *40–13–35 others to the railroad for repair and mainte- Roadway Machines ...... 40–13–36 nance of other railroads’ roadway and track Snow Removal ...... 40–13–38 on the line of road and outside of classifica- Road Property and Equipment tion yards. This account shall be subdivided Damaged ...... 40–13–48 by the following functions: Repair and Maintenance: Repairs Billed to Others—Cr.—Equip- Roadway ...... 40–11–10 ment Locomotives—40–21–XX Tunnels and Subways ...... 40–11–11 Bridges and Culverts ...... 40–11–12 This account includes amounts payable by Ties ...... 40–11–13 others to the railroad for repair and mainte- Rails and Other Track Mate- nance of other railroads’ locomotives. This rial ...... 40–11–14 account shall be subdivided by the following Ballast ...... 40–11–16 functions: Signals and Interlockers ...... 40–11–19 Repair and Maintenance: Highway Grade Crossings ...... 40–11–22 Locomotives ...... 40–21–41 Road Property and Equipment Road Property and Equipment Damaged ...... 40–11–48 Damaged ...... 40–21–48

Repairs Billed to Others—Cr.—Way and Repairs Billed to Others—Cr.—Equip- Structures Switching—40–12–XX ment—Freight Cars—40–22–XX* This account includes amounts payable by This account includes amounts payable by others to the railroad for repair and mainte- others to the railroad for repair and maintenance of other railroads’ roadway and track nance of other railroads’ freight cars. This within classification yards and stations. This account shall be subdivided by the following account shall be subdivided by the following functions: functions: Repair and Maintenance: Repair and Maintenance: Freight Cars ...... 40–22–42 Roadway ...... 40–12–10 Road Property and Equipment Tunnels and Subways ...... 40–12–11 Damaged ...... 40–22–48 Bridges and Culverts ...... 40–12–12 Ties ...... 40–12–13 Repairs Billed to Others—Cr.—Equip- Rails and Other Track Mate- ment—Other Equipment—40–23–XX rial ...... 40–12–14 Ballast ...... 40–12–16 This account includes amounts payable by Signals and Interlockers ...... 40–12–19 others to the railroad for repair and mainte- Highway Grade Crossings ...... 40–12–22 nance of other railroads’ other equipment. Road Property and Equipment Each account shall be subdivided by the fol- Damaged ...... 40–12–48 lowing functions: 84

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Repair and Maintenance: Repair and Maintenance: Trucks, Trailers, and Con- Roadway ...... 41–12–10 tainers in Revenue Service .. *40–23–43 Tunnels and Subways ...... 41–12–11 Floating Equipment—Revenue Bridges and Culverts ...... 41–12–12 Service ...... *40–23–44 Ties ...... 41–12–13 Passenger and Other Revenue Rails and Other Track Mate- Equipment ...... 40–23–45 rial ...... 41–12–14 Computer Systems and Word Ballast ...... 41–12–16 Processing Equipment ...... 40–23–46 Signals and Interlockers ...... 41–12–19 Road Property and Equipment Highway Grade Crossings ...... 41–12–22 Damaged ...... 40–23–48 Dismantling Retired Property 41–12–39 Shop Machinery—Locomotives 40–23–49 Road Property and Equipment Shop Machinery—Freight Cars *40–23–50 Damaged ...... 41–12–48 Shop Machinery—Other Other—Other ...... 41–12–99 Equipment ...... 40–23–51 Other Purchased Services—Way and Other Purchased Services—Control— Structures—Other—41–13–XX 41–00–00 This account includes amounts charged or This account group includes amounts credited to operating expenses for other purchased services specified in control account charged or credited to operating ex- 41–00–00. This account shall be subdivided by penses for purchased advertising; pur- the following functions: chased printing; outside professional Administration: services such as legal, accounting, Track ...... 41–13–02 audit, engineering, and consulting; Bridges and Buildings ...... 41–13–03 payments for detour of trains; utilities, Signals ...... 41–13–04 telephone, postage, subscriptions, com- Communications ...... 41–13–05 munications, purchased electric power Other ...... 41–13–06 for train and locomotive propulsion; Repair and Maintenance: Communication Systems ...... 41–13–20 and other services purchased. The com- Power Systems ...... 41–13–21 ponents of this account group shall be Station and Office Buildings ... 41–13–23 distributed to the following accounts Shop Buildings—Locomotives 41–13–24 in accordance with Instruction 1–18: Shop Buildings—Freight Cars *41–13–25 Shop Buildings—Other Equip- Other Purchased Services—Way and ment ...... 41–13–26 Structures—Running—41–11–XX Locomotive Servicing Facili- ties ...... 41–13–27 This account includes amounts charged or Miscellaneous Buildings and credited to operating expenses for other pur- Structures ...... 41–13–28 chased services specified in control account Coal Terminals ...... *41–13–29 41–00–00. This account shall be subdivided by Ore Terminals ...... *41–13–30 the following functions: TOFC/COFC Terminals ...... *41–13–31 Repair and Maintenance: Other Marine Terminals ...... *41–13–32 Roadway ...... 41–11–10 Motor Vehicle Loading and Tunnels and Subways ...... 41–11–11 Distribution Facilities ...... *41–13–33 Bridges and Culverts ...... 41–11–12 Facilities for Other Special- Ties ...... 41–11–13 ized Services Operations ...... *41–13–35 Rails and Other Track Mate- Roadway Machines ...... 41–13–36 rial ...... 41–11–14 Snow Removal ...... 41–13–38 Ballast ...... 41–11–16 Dismantling Retired Property 41–13–39 Signals and Interlockers ...... 41–11–19 Road Property and Equipment Highway Grade Crossings ...... 41–11–22 Damaged ...... 41–13–48 Dismantling Retired Property 41–11–39 Other—Other ...... 41–13–99 Road Property and Equipment Damaged ...... 41–11–48 Other Purchased Services—Equip- Other—Other ...... 41–11–99 ment—Locomotives—41–21–XX This account includes amounts charged or Other Purchased Services—Way and credited to operating expenses for other pur- Structures—Switching—41–12–XX chased services specified in control account This account includes amounts charged or 41–00–00. This account shall be subdivided by credited to operating expenses for other pur- the following functions: chased services specified in control account Administrative—General ...... 41–21–01 41–00–00. This account shall be subdivided by Repair and Maintenance: the following functions: Dismantling Retired Property 41–21–39

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Locomotives ...... 41–21–41 Highway Crossing Protection 41–31–61 Road Property and Equipment Train Inspection and Lubrica- Damaged ...... 41–21–48 tion ...... 41–31–62 Other—Other ...... 41–21–99 Clearing Wrecks ...... 41–31–63 Locomotive Fuel ...... 41–31–67 Other Purchased Services—Equip- Electric Power Purchased/Pro- ment—Freight Cars—41–22–XX* duced for Motive Power ...... 41–31–68 This account includes amounts charged or Servicing Locomotives ...... 41–31–69 credited to operating expenses for other pur- Other—Other ...... 41–31–99 chased services specified in control account 41–00–00. This account shall be subdivided by Other Purchased Services—Transpor- the following functions: tation—Yard—41–32–XX Administrative—General ...... 41–22–01 This account includes amounts charged or Repair and Maintenance: credited to operating expenses for other pur- Dismantling Retired Property 41–22–39 chased services specified in control account Freight Cars ...... 41–22–42 41–00–00. This account shall be subdivided by Road Property and Equipment the following functions: Damaged ...... 41–22–48 Administration—General ...... 41–32–01 Other—Other ...... 41–22–99 Operations: Operating Switches, Signals, Other Purchased Services—Equip- Interlockers, Retarders, ment—Other Equipment—41–23–XX Humps ...... 41–32–59 This account includes amounts charged or Clearing Wrecks ...... 41–32–63 credited to operating expenses for other pur- Switch Crews ...... 41–32–64 chased services specified in control account Controlling Operations ...... 41–32–65 41–00–00. This account shall be subdivided by Yard and Terminal Clerical .... 41–32–66 the following functions: Locomotive Fuel ...... 41–32–67 Electric Power Purchased/Pro- Administrative—General ...... 41–23–01 Repair and Maintenance: duced for Motive Power ...... 41–32–68 Dismantling Retired Property 41–23–39 Servicing Locomotives ...... 41–32–69 Trucks, Trailers, Containers Other—Other ...... 41–32–99 in Revenue Service ...... 41–23–43 Floating Equipment—Revenue Other Purchased Services—Transpor- Service ...... *41–23–44 tation—Train and Yard Common— Passenger and Other Revenue 41–33–XX Equipment ...... 41–23–45 This account includes amounts charged or Computer Systems and Word credited to operating expenses for other pur- Processing Equipment ...... 41–23–46 chased services specified in control account Work and Other Non-Revenue 41–00–00. This account shall be subdivided by Equipment ...... 41–23–47 the following functions: Road Property and Equipment Damaged ...... 41–23–48 Operations: Shop Machinery—Locomotives 41–23–49 Cleaning Car Interiors ...... 41–33–70 Shop Machinery—Freight Cars *41–23–50 Adjusting, Transferring Loads 41–33–71 Shop Machinery—Other Car Loading Devices and Equipment ...... 41–23–51 Grain Doors ...... 41–33–72 Other—Other ...... 41–23–99 Other Purchased Services—Transpor- Other Purchased Services—Transpor- tation—Specialized Services—41– tation—Train—41–31–XX 34–XX This account includes amounts charged or This account includes amounts charged or credited to operating expenses for other pur- credited to operating expenses for other purchased services specified in control account chased services specified in control account 41–00–00. This account shall be subdivided by 41–00–00. This account shall be subdivided by the following functions: the following functions: Administration—General ...... 41–31–01 Administration—General ...... 41–34–73 Operations: Operations: Engine Crews ...... 41–31–56 Pick Up and Delivery, Marine Train Crews ...... 41–31–57 Line Haul, and Rail Sub- Dispatching Trains ...... 41–31–58 stitute Service ...... 41–34–73 Operating Switches, Signals, Loading, Unloading, and Local Interlockers, Retarders, Marine ...... 41–34–74 Humps ...... 41–31–59 Protective Services ...... 41–34–75 Operating Drawbridges ...... 41–31–60 Other—Other ...... 41–34–99 86

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Other Purchased Services—Transpor- damage claim shall be charged to the tation—Administrative Support— Train and Yard Subactivity. This ac- 41–35–XX count series excludes amounts payable This account includes amounts charged or to employees or other parties for inju- credited to operating expenses for other pur- ries sustained or loss of life; for dam- chased services specified in control account age to real property of others or per- 41–00–00. This account shall be subdivided by sonal property not carried in revenue the following functions: services; all payments for other dam- Administration—General ...... 41–35–01 ages of any kind; and related insurance Operations: premiums. These costs are appro- Clerks, Accounting Employees 41–35–76 priately charged to the following ac- Communication Systems Op- counts: erations ...... 41–35–77 Loss and Damage Claims Proc- Loss and Damage Claims—Trans- essing ...... 41–35–78 portation—Train ...... 51–31–00 Other—Other ...... 41–35–99 Loss and Damage Claims—Trans- portation—Yard ...... 51–32–00 Other Purchased Services—General Loss and Damage Claims—Trans- and Administrative—41–61–XX portation—Train and Yard Com- mon ...... 51–33–00 This account includes amounts charged or Loss and Damage Claims—Trans- credited to operating expenses for other pur- portation—Specialized Services *51–34–00 chased services specified in control account 41–00–00. This account shall be subdivided by Other Casualties—Control—52–00–00 the following functions: Administration—General ...... 41–61–01 This account includes amounts pay- General: able to employees or other parties for Accounting, Auditing, Finance 41–61–86 injuries sustained or loss of life in con- Management Services and nection with the construction, mainte- Data and Word Processing ... 41–61–87 nance, operations, and administration Marketing ...... 41–61–88 of railroad property and equipment; for Sales ...... 41–61–89 Industrial Development ...... *41–61–90 damage to real property, property of Personnel and Labor Relations 41–61–91 others or personal property not carried Legal and Secretarial ...... 41–61–92 in revenue service; all payments for Public Relations and Adver- other damages of any kind. This ac- tising ...... 41–61–93 count excludes freight and other goods Research and Development ..... 41–61–94 carried in a revenue service, and insur- Other—Other ...... 41–61–99 ance premiums related to the casualties chargeable to this account. Claims and Insurance NOTE: The costs of clearing wrecks and repairing casualty-caused damage to the rail- Control—50–00–00 road’s property and equipment are properly This account may be used as a con- classified under other natural expense accounts as appropriate and further classified trol account for all accounts in the by relevant activities and functions. These CLAIMS AND INSURANCE series: Loss and costs are appropriately charged to the fol- Damage Claims, Other Casualties, In- lowing accounts: surance. Other Casualties—Way and Struc- tures—Running ...... 52–11–00 Loss and Damage Claims—Control—51– Other Casualties—Way and Struc- 00–00 tures—Switching ...... 52–12–00 This account series includes amounts Other Casualties—Way and Struc- payable to compensate for the loss or tures—Other ...... 52–13–00 damage of freight or other goods car- Other Casualties—Equipment— ried in revenue service. Loss and dam- Locomotives ...... 52–21–00 age claims should not be allocated. Other Casualties—Equipment— Freight Cars ...... *52–22–00 When specific identification of loss and Other Casualties—Equipment— damage claims is possible, the related Other Equipment ...... 52–34–00 expenses shall be directly assigned to Other Casualties—Transpor- the Train, Yard, or Specialized service tation—Train ...... 52–31–00 Subactivity. If a solely related deter- Other Casualties—Transpor- mination cannot be made the loss and tation—Yard ...... 52–32–00

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Other Casualties—Transpor- associated with the carrier’s roadway and tation—Specialized Services ...... *52–34–00 track on the line of road and outside of clas- Other Casualties—Transpor- sification yards. Each account shall be sub- tation—Administrative Support 52–35–00 divided by the following functions: Other Casualties—General and Ad- Repair Maintenance: ministrative ...... 52–61–00 Roadway ...... 61–11–10 Tunnels and Subways ...... 61–11–11 Insurance—Control—53–00–00 Bridges and Culverts ...... 61–11–12 This account series include premiums Ties ...... 61–11–13 for insurance to cover property and Rails and Other Track Mate- rial ...... 61–11–14 equipment loss and damage, liability, Ballast ...... 61–11–16 business interruption, and the like. Signals and Interlockers ...... 61–11–19 These costs are appropriately charged Highway Grade Crossings ...... 61–11–22 to the following accounts: Dismantling Retired Property 61–11–39 Insurance—Way and Structures— Road Property and Equipment Running ...... 53–11–00 Damaged ...... 61–11–48 Insurance—Way and Structures— Other—Other ...... 61–11–99 Switching ...... 53–12–00 Insurance—Way and Structures— Other Expenses—Way and Structures— Other ...... 53–13–00 Switching—61–12–XX Insurance—Equipment—Loco- Each account includes amount charged to motives ...... 53–21–00 operating expenses for items not otherwise Insurance—Equipment—Freight provided for in the other natural expense ac- Cars ...... *53–22–00 counts, including travel and other expenses Insurance—Equipment—Other of employees, road property retirement Equipment ...... 53–23–00 losses, and other items of a general nature Insurance—Transportation—Train 53–31–00 associated with the carrier’s roadway and Insurance—Transportation—Yard 53–32–00 track within classification yards and sta- Insurance—Transportation—Spe- tions. Each account shall be subdivided by cialized Services ...... *53–34–00 the following functions: Insurance—Transportation—Ad- ministrative Support ...... 53–35–00 Repair and Maintenance: Insurance—General and Adminis- Roadway ...... 61–12–10 trative ...... 53–61–00 Tunnels and Subways ...... 61–12–11 Bridges and Culverts ...... 61–12–12 Ties ...... 61–12–13 General Rails and Other Track Mate- rial ...... 61–12–14 Control—60–00–00 Ballast ...... 61–12–16 Signals and Interlockers ...... 61–12–19 This account may be used as a con- Highway Grade Crossings ...... 61–12–22 trol account for all accounts in the Dismantling Retired Property 61–12–39 GENERAL series: Other Expenses, Depre- Road Property and Equipment ciation, Uncollectible Accounts, Prop- Damaged ...... 61–12–48 erty Taxes, Other Taxes. Other—Other ...... 61–12–99

Other Expenses—Control—61–00–00 Other Expenses—Way and Structures— Other—61–13–XX This account series includes amounts charged to operating expenses for This account includes amounts items not otherwise provided for in the charged to operating expenses for other natural expense accounts, includ- items not otherwise provided for in the ing travel and other expenses of em- other natural expense accounts, includ- ployees, road property and equipment ing travel and other expenses of em- retirement losses, and other items of a ployees, road property retirement general nature. losses, and other items of a general nature associated with the carrier’s Other Expenses—Way and Structures— structures other than roadway and Running—61–11–XX track. This account shall be subdivided Each account includes amounts charged to by the following functions: operating expenses for items not otherwise Administration: provided for in the other natural expense ac- Track ...... 61–13–02 counts, including travel and other expenses Bridges and Buildings ...... 61–13–03 of employees, road property retirement Signals ...... 61–13–04 losses, and other items of a general nature Communications ...... 61–13–05 88

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Other ...... 61–13–06 Other Expenses—Equipment—Other Repair and Maintenance: Equipment—61–23–XX Communication Systems ...... 61–13–20 Power Systems ...... 61–13–21 This account includes amounts charged to Station and Office Buildings ... 61–13–23 operating expenses for items not otherwise Shop Buildings—Locomotives 61–13–24 provided for in the other natural expense ac- Shop Buildings—Freight Cars *61–13–25 counts, including travel and other expenses Shop Buildings—Other Equip- of employees, equipment retirement losses, ment ...... 61–13–26 associated with the repair and maintenance Locomotive Servicing Facili- of equipment other than locomotives and ties ...... 61–13–27 freight cars, whether owned by the carrier or Miscellaneous Buildings and by others. This account shall be subdivided Structures ...... 61–13–28 by the following functions: Coal Terminals ...... *61–13–29 Administration—General ...... 61–23–01 Ore Terminals ...... *61–13–30 Repair and Maintenance: TOFC/COFC Terminals ...... *61–13–31 Dismantling Retired Property 61–23–39 Other Marine Terminals ...... *61–13–32 Trucks, Trailers, Containers Motor Vehicle Loading and in Revenue Service ...... *61–23–43 Distribution Facilities ...... *61–13–33 Facilities for Other Special- Floating Equipment—Revenue ized Services Operations ...... *61–13–35 Service ...... *61–23–44 Roadway Machines ...... 61–13–36 Passenger and Other Revenue Snow Removal ...... 61–13–38 Equipment ...... 61–23–45 Dismantling Retired Property 61–13–39 Computer Systems and Word Road Property and Equipment Processing Equipment ...... 61–23–46 Damaged ...... 61–13–48 Work and Other Non-Revenue Other—Other ...... 61–13–99 Equipment ...... 61–23–47 Road Property and Equipment Other Expenses—Equipment—Loco- Damaged ...... 61–23–48 motives 61–21–XX Shop Machinery—Locomotives 61–23–49 This account includes amounts charged to Shop Machinery—Freight Cars *61–23–50 operating expenses for items not otherwise Shop Machinery—Other provided for in the other natural expense ac- Equipment ...... 61–23–51 counts, including travel and other expenses Other—Other ...... 61–23–99 of employees and equipment retirement losses, associated with the repair and main- Other Expenses—Transportation— tenance of locomotives, whether owned by Train—61–23–XX the carrier or by others. This account shall be subdivided by the following functions: This account includes amounts charged to operating expenses for items not otherwise Administration—General ...... 61–21–01 provided for in the other natural expense ac- Repair and Maintenance: counts, including travel and other expenses Dismantling Retired Property 61–21–39 of employees, associated with the dis- Locomotives ...... 61–21–41 patching and operations of freight-trains Road Property and Equipment over the roadway and outside of classifica- Damaged ...... 61–21–48 tion yards. This account shall be subdivided Other—Other ...... 61–21–99 by the following functions: Other Expenses—Equipment—Freight Administration—General ...... 61–31–01 Cars—61–22–XX* Operations: Engine Crews ...... 61–31–56 This account includes amounts charged to Train Crews ...... 61–31–57 operating expenses for items not otherwise Dispatching Trains ...... 61–31–58 provided for in the other natural expense ac- Operating Switches, Signals, counts, including travel and other expenses Interlockers, Retarders, of employees, equipment retirement losses, Humps ...... 61–31–59 associated with the repair and maintenance of freight cars, whether owned by the carrier Operating Drawbridges ...... 61–31–60 or by others. This account shall be sub- Highway Crossing Protection 61–31–61 divided by the following functions: Train Inspection and Lubrica- tion ...... 61–31–62 Administration—General ...... 61–22–01 Repair and Maintenance: Clearing Wrecks ...... 61–31–63 Dismantling Retired Property 61–22–39 Locomotive Fuel ...... 61–31–67 Freight Cars ...... 61–22–42 Electric Power Purchased/Pro- Road Property and Equipment duced for Motive Power ...... 61–31–68 Damaged ...... 61–22–48 Servicing Locomotives ...... 61–31–69 Other—Other ...... 61–22–99 Other—Other ...... 61–31–99 89

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Other Expenses—Transportation— Operations: Yard—61–32–XX Clerks, Accounting Employees 61–35–76 Communication Systems Op- This account includes amounts charged to erations ...... 61–35–77 operating expenses for items not otherwise Loss and Damage Claims Proc- provided for in the other natural expense ac- essing ...... 61–35–78 counts, including travel and other expenses Other—Other ...... 61–35–99 of employees, and other items of a general nature associated with the movement of Other Expenses—General and Adminis- freight cars within classification yards and trative—61–61–XX in terminal switching and transfer service. This account shall be subdivided by the fol- This account includes amounts charged to lowing functions: operating expenses for items not otherwise Administration—General ...... 61–32–01 provided for in the other natural expense accounts, including travel and other expenses Operations: of employees, and other items of a general Operating Switches, Signals, nature incurred in providing overall admin- Interlockers, Retarders, istration or other support for carrier oper- Humps ...... 61–32–59 ations. This account shall be subdivided by Clearing Wrecks ...... 61–32–63 the following functions: Switch Crews ...... 61–32–64 Controlling Operations ...... 61–32–65 Administration—General ...... 61–61–01 Yard and Terminal Clerical .... 61–32–66 General: Locomotive Fuel ...... 61–32–67 Accounting, Auditing, Finance 61–61–86 Electric Power Purchased/Pro- Management Services and duced for Motive Power ...... 61–32–68 Data Processing ...... 61–61–87 Servicing Locomotives ...... 61–32–69 Marketing ...... 61–61–88 Sales ...... 61–61–89 Other—Other ...... 61–32–99 Industrial Development ...... *61–61–90 Personnel Labor Relations ..... 61–61–91 Other Expenses—Transportation—Spe- Legal and Secretarial ...... 61–61–92 cialized Services—61–34–XX* Public Relations and Adver- This account includes amounts charged to tising ...... 61–61–93 operating expenses for items not otherwise Research and Development ..... 61–61–94 provided for in the other natural expense ac- Other—Other ...... 61–61–99 counts, including travel and other expenses of employees, and other items of a general Depreciation—Control—62–00–00 nature incurred in operating services which This account group includes the are specialized in nature and in cost charac- amounts charged to operating expenses teristics. The specialized services designated for depreciation of owned road property by the Board appear within the explanation of activities/ subactivities. This account and equipment, and the depreciation shall be subdivided by the following func- element of road property held under tions: capital lease in accordance with FASB Administration—General ...... 61–34–01 Statement No. 13. These costs are ap- Operations: propriately charged to the following Pick Up and Delivery, Marine accounts: Line Haul, and Rail Sub- Depreciation—Way and Struc- stitute Service ...... 61–34–73 tures—Running ...... 62–11–00 Loading, Unloading, and Local Depreciation—Way and Struc- Marine ...... 61–34–74 tures—Switching ...... 62–12–00 Protective Services ...... 61–34–75 Depreciation—Way and Struc- Other—Other ...... 61–34–99 tures—Other ...... 62–13–00 Depreciation—Equipment—Loco- Other Expenses—Transportation—Ad- motives ...... 62–21–00 ministrative Support—61–35–XX Depreciation—Equipment— Freight Cars ...... *62–22–00 This account includes amounts charged to Depreciation—Equipment—Other operating expenses for items not otherwise Equipment ...... 62–23–00 provided for in the other natural expense accounts, including travel and other expenses Uncollectible Accounts—Control—63– of employees, and other items of a general nature incurred in association with pro- 00–00 viding direct administrative support for the This account includes charges to op- Transportation Activity. This account shall erating expenses for the writedown of be subdivided by the following functions: accounts and notes due to the railroad, Administration—General ...... 61–35–01 whether classified as current or long- 90

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term. This account includes any cred- described functions on property of the its to allowance accounts for collect- type included in property accounts 2 ibility and total writeoff of receivables. through 45, excluding 44, whether such This account does not include property is owned or leased. It includes writedowns of property, equipment, or the costs of operating work trains in investments (except accounts, notes, or support of this activity. other receivables held as investments). This activity excludes all expenses Proper adjustments of incorrect receiv- related to transportation and other ables are not to be charged to this ac- equipment described in property account. Collections of amounts pre- counts 44, 46 and 52 through 58, all of viously written off or down are to be which should be charged to the Equip- credited to this account. The total of ment activity. It also excludes ex- this account shall be charged to the penses in performance or support of following account: Transportation, General and Adminis- Uncollectible Accounts—General trative activities, property used for and Administrative ...... 63–61–00 noncarrier operations, non-operating property, and interest or other fixed Property Taxes—Control—64–00–00 charges. This account includes only taxes based on the value of real estate and Running Subactivity—(XX–11–XX) personal property used in railroad op- (1) Running subactivity of the Way erations. The total of this account and Structures activity refers to the shall be charged to the following ac- functions of repairing, maintaining, count: leasing, renting, depreciating, and re- Property Taxes—General and Ad- tiring right-of-way, trackage, signals ministrative ...... 64–61–00 and interlockers, and highway grade crossings for running tracks, passing Other Taxes—Control—65–00–00 tracks, crossovers, etc., including turn- This account includes taxes on gross outs from those tracks, passing clear- receipts, franchise fees, excise taxes, ance points. It includes all natural ex- and similar items. This account expense object subclassifications under cludes property taxes and taxes charge- the Way and Structures activity that able as employee benefits. The total of are applicable to right-of-way and this account shall be charged to the trackage as defined above. This sub- following account: activity specifically excludes expenses Other Taxes—General and Admin- incurred in operating signals and inter- istrative ...... 65–61–00 lockers and highway grade crossings, which are properly charged to the OPERATING EXPENSE ACCOUNTS Transportation activity.

Section 2—Activity/Subactivity Switching Subactivity—(XX–12–XX) Explanations (2) Switching subactivity of the Way and Structures activity refers to the Way and Structures Activity—(XX–10– function of repairing, maintaining, XX) leasing, renting, depreciating, and re- (A) Way and Structures activity refers tiring right-of-way, trackage, signals to repairing, maintaining, leasing, and interlockers, and highway grade renting, depreciating, and retiring crossings for yards where separate right-of-way and trackage, structures, switching services are maintained, in- buildings, and facilities. It includes all cluding classification, house, team, in- natural expense object subclassifica- dustry, and other tracks switched by tions such as salaries and wages, fringe yard locomotives, and for station, benefits, material and supplies, lease team, industry, and other switching rentals, purchased services, casualties, tracks for which no separate switching depreciation and retirements, where service is maintained. It includes all such objects are in the performance or natural expense object subclassifica- support of the above functions. Specifi- tions under the Way and Structures ac- cally included are all natural expense tivity that are applicable to right-of- objects in the performance of the above way and trackage as defined above.

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This subactivity specifically excludes Locomotives Subactivity—(XX–21–XX) expenses incurred in operating signals (1) Locomotives subactivity of the and interlockers, and highway grade Equipment activity refers to repairing, crossings, which are properly charged maintaining, leasing, renting, depre- to the Transportation activity. ciating, and retiring locomotives. It includes all natural expense object sub- Other Subactivity—(XX–13–XX) classifications under the Equipment (3) Other subactivity of the Way and activity that are applicable to loco- Structures activity refers to the func- motives. This subactivity specifically tion of repairing, maintaining, leasing, excludes expenses incurred in oper- renting, depreciating, and retiring ating locomotives, such as locomotive other roadway property structures, fuel and lubricants, train crew wages, buildings, and facilities not provided operating supplies, servicing (as op- for in the Running and Switching sub- posed to maintaining or repairing), and activities. It includes all natural ex- cleaning which are includable in the pense object subclassifications under Transportation activity, except when the Way and Structures activity that locomotive use is clearly in support of are applicable to the structures, build- other activities or subactivities. When ings, and facilities as defined above. locomotives are operated in support of The specifically excludes expenses in- repairing or maintaining locomotives, curred in operating such structures, the operating costs shall be charged to buildings, and facilities, which are this subactivity. properly charged to the Equipment, Transportation, and General and Ad- Freight Train Cars Subactivity—(XX– ministrative activities. 22–XX) (2) Freight Train Cars subactivity of Equipment Activity—(XX–20–XX) the Equipment activity refers to re- (B) Equipment activity refers to repairing, maintaining, leasing, renting, pairing, maintaining, leasing, renting, depreciating, and retiring freight train depreciating, and retiring transpor- cars. It includes all natural expense ob- tation and other operating equipment. ject subclassifications under the Equip- It includes all natural expense object ment activity that are applicable to subclassifications such as salaries and freight train cars. This subactivity per- wages, fringe benefits, material and tains to all freight train cars described supplies, lease rentals, purchased serv- in property account 53, whether owned ices, casualties, depreciation, and re- or leased, including freight cars used tirements. Specifically included are all for hauling freight in company service natural expense objects in the perform- and cabooses. It does not pertain to ance of the above functions on property work equipment. This subactivity spe- of the type included in property ac- cifically excludes expenses incurred in counts 44, 46 and 52 through 58, whether running trains or operating freight such property is owned or leased. The cars, such as for locomotive fuel and costs of operating work trains in sup- lubricants, train crew wages, inspect- port of the Equipment activity are to ing trains, operating supplies, servicing be included herein. (as opposed to maintaining or repair- This activity excludes all expenses ing), and cleaning, which are includ- related to road property as described in able in the Transportation activity, ex- property accounts 2 through 45, exclud- cept where such costs are clearly in ing account 44, all of which should be support of repairing or maintaining charged to the Way and Structures ac- freight cars, other activities or sub- tivity. It also excludes expenses in per- activities. When locomotives or trains formance of, or support for Transpor- are operated in support of repairing or tation, General and Administrative ac- maintaining freight cars, the operating tivities, property used for noncarrier costs shall be charged to this sub- operations, nonoperating property, and activity. interest or other fixed charges.

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Other Equipment Subactivity—(XX–23– terial and supplies, purchased services, XX) lost or damaged freight, and casualties. (3) Other Equipment subactivity of the Train Operations Subactivity—(XX–31– Equipment activity refers to repairing, XX) maintaining, leasing, renting, depreciating, and retiring other equipment. This activity excludes all expenses It includes all natural expense object assignable to the Way and Structures, subclassifications under the Equipment Equipment, and General and Adminis- activity which are applicable to other trative activities, as well as those ex- equipment. The subactivity pertains to penses for noncarrier operations and all equipment described in property ac- nonoperating functions. counts 44, 46 and 54 through 58, whether (1) Train Operations subactivity of the such property is owned or leased. This Transportation activity refers to oper- subactivity specifically excludes ex- ations of all trains except those per- penses incurred in operating other forming yard functions in terminals. It equipment, such as for fuel and lubri- includes running trains in road or way cants, crew wages, inspecting equip- service; switching trains except where ment, operating supplies, servicing (as such switching is performed within opposed to maintaining or repairing), yards or terminals; and making cus- and cleaning, which are includible in tomer pick-ups and deliveries except in the Transportation activity, except yards and terminals. where such costs are clearly in support It also provides for dispatching, con- of other activities or subactivities. trolling, reporting, and monitoring When locomotives, trains, or other road train movements; inspecting and equipment are operating in support of lubricating trains; servicing, fueling, repairing or maintaining other equip- and cleaning (not repairing or main- ment, the operating costs shall be taining) locomotives; purchasing or charged to this subactivity. producing electric power for motive power; and operating supporting activi- Transportation Activity—(XX–30–XX) ties such as communications, sig- (C) Transportation activity refers to naling, crossing protection, and operating, servicing, inspecting, weigh- interlockings. ing, assembling, and switching trains; This subactivity also includes crew operating highway revenue services; calling and transporting; crew lodging, operating facilities in connection with meals, and other expenses; lost or dam- carrier transportation operations in- aged freight; casualties and insurance; cluding coal and ore terminals, inter- clearing wrecks; and operating joint modal terminals, terminal grain ele- tracks and facilities except for yards or vators, and others; operating carfloat specialized services. It also includes and carferry services and related facili- salaries and wages, fringe benefits, ma- ties; operating communications sys- terial and supplies, fuel and lubricants, tems which primarily support train op- purchased services, casualty and dam- erations; and joint facility transpor- ages, and other natural expense ele- tation operations. It includes various ments incurred in operating trains. administrative functions directly sup- The Train Operations subactivity ex- porting transportation operations includes the operation of specialized cluding those described in the Adminis- services, all of which should be charged trative Support Operations sub- to the Specialized Services Operations activity. Work train costs in support of subactivity. However, road or way the Way and Structures or the Equip- switching between trains and special- ment activities should be charged to ized service facilities outside of ter- those activities. However, shipments of minal areas belongs to the Train Oper- company materials, handled in pre- ations subactivity. dominantly revenue freight trains, are Work and other nonrevenue train op- appropriately included in this activity. erating costs are to be charged to the This activity includes all natural ex- appropriate supported activity. Ship- pense object subclassifications such as ments of company materials normally salaries and wages, fringe benefits, ma- should be charged to this subactivity,

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except where the train movement is ex- when they are performed in a yard or clusively or predominantly for such terminal area. nonrevenue purpose where the supported activity should bear the train Train and Yard Common Subactivity— operating costs. (XX–33–XX) (3) Train and Yard Common sub- Yard Operations Subactivity—(XX–32– activity of the Transportation activity XX) refers to the function of adjusting and (2) Yard Operations subactivity of the transferring loads; and placing and re- Transportation activity refers to moving car loading devices and grain classifying cars to make-up or break- doors. It also includes lost or damaged down trains; sorting and handling way- freight not specifically traceable to nu- bills in connection with freight car merous activities resulting from per- classification and switching in yards or formance of train, yard, or specialized terminals; inspecting, servicing, fuel- services operations. It also includes ing, and cleaning (not repairing or salaries and wages, fringe benefits, ma- maintaining) locomotives and cabooses terial and supplies, purchased services, used to provide yard or terminal serv- and other natural expense elements incurred in performing the functions de- ices; purchasing or producing electric fined above. It excludes the natural ex- power for motive power; diverting or pense elements of casualties and insur- holding cars; and reporting operating ance, which shall be charged to the and car movement data related to Train Operations and Yard Operations yards and terminals. It also includes subactivities. operating supporting activities in yards or terminals, such as commu- Specialized Services Operations Sub- nications, signaling, and interlockings; activity—(XX–34–XX) yard crew calling and transporting; (4) Specialized Services Operations sub- yard crew lodging, meals, and other ex- activity of the Transportation activity penses; lost or damaged freight specifi- refers to operating services which are cally traceable to occurrences result- specialized in nature and in cost char- ing from the performance of yard oper- acteristics, including all of those so ations; casualties and insurance redesignated by the Board. The purpose lated to yard operations; clearing of segregating the cost of such services wrecks which occurred in the perform- is primarily to preclude distortion of ance of yard operations; and operating general costs applicable to the Train joint yards and terminals. Operations and Yard Operations sub- Within terminals, this subactivity in- activities. Secondarily, further break- cludes pick-up or delivery of freight out of the costs of operating individual cars from or to customer spur tracks, specialized services can be provided in team tracks, freight houses, inter- less detail than the full range of nat- change tracks, rip tracks, and special- ural expense accounts, in reports used ized service facilities. It also includes for recurring cost analysis purposes salaries and wages, fringe benefits, ma- pertaining to each type of specialized terial and supplies, fuel and lubricants, service. purchased services, casualty and dam- The designated specialized services ages, and other natural expense ele- operations are as follows: ments incurred in operating yards and (a) TOFC/COFC Operations refers to terminals. the function of operating rail-to- The Yard Operations subactivity in- ground or water and ground or water- cludes the cost of switching operations to-rail transfer facilities for handling within facilities for Specialized Serv- trailers or containers, including re- ices and switching or transfer oper- lated storage; and the highway move- ations between yards and the special- ment of trailers or containers within a ized service facilities. The latter is not terminal area for purposes of pick-up, limited or affected by definitions or re- delivery, or interchange. strictions contained in carrier oper- The service includes loading, tie- ating rules or labor agreements. It is down, and/or unloading flat cars or dol- related solely to the defined operations lies and piggyback trailers to or from

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highway tractors; moving trailers, dol- whatever means; operating the facili- lies, or containers within the facility; ty’s pollution control equipment; oper- servicing, cleaning, and fueling (but ating and directing the operations of not repairing or maintaining) facility moorings and tugboats; servicing, equipment; operating storage areas; cleaning, and fueling (but not repairing and casualties, claims, and insurance or maintaining) facility equipment; op- relating to the facility. erating storage areas; and casualties, TOFC/COFC Operations do not in- claims, and insurance relating to the clude Plan V or other arrangements, facility. where there is a division of revenues These terminal operations do not in- between the rail and motor carrier. clude costs appropriate to the Way and They do not include switching services Structures, Equipment, or General and performed within the facility by yard Administrative activities. They also do or road crews. They also do not include not include costs appropriate to the the functions of the Way and Struc- Train Operations, Yard Operations, tures, Equipment, and General and Ad- Train and Yard Operations Common, or ministrative activities, or the Train, Administrative Support Services Oper- Yard, Train and Yard Common, or Ad- ations subactivities. Switching trans- ministrative Support Operations sub- fer of cars between general yards or activities. trains and the facility or a dedicated (b) Floating Operations refers to oper- yard serving the facility and switching ations of water vessels and equipment within the dedicated supporting ter- in revenue service. They include the minal facility when performed by yard operation of carferries, tugs, barges, crews should be charged to the Yard lighterage, and all other forms of water Operations subactivity. craft. (d) Other Marine Terminal Operations Floating operations exclude oper- refers to the operations of marine ter- ations includable in the Administra- minals other than those for which a tive Support Operations subactivity, separate designated specialized service and the switching transfer of cars be- operation category is provided. tween general yards or trains and the (e) Motor Vehicle Loading and Distribu- facility or a dedicated yard serving the tion Facility Operations refers to the op- facility, or switching within the dedi- erations of facilities for loading, un- cated supporting terminal facility loading, or storing motor vehicles. when performed by yard crews. They (f) Protective Service Operations refers also do not include costs appropriate to to the function of servicing, cleaning, the Way and Structures, Equipment, or and fueling (but not repairing or main- General and Administrative activities. taining) mechanical protective service Floating operations should be classi- equipment. fied by line and terminal operations. (g) Other Specialized Services Oper- The distribution should be made based ations refers to the function of per- on the nature of the operation and not forming rail substitute service, other the facility or equipment. When the highway revenue service, LCL terminal service occurs between distinct termi- operations, warehouse operations, nals, the operation should be consid- freight car transloading, grain elevator ered a line operation. When the service terminal operations, livestock feeding is conducted within a general terminal operations, and other specialized serv- or harbor area, the operation should be ices designated by the Board. It in- considered a terminal operation. cludes the transportation operating ex- (c) Coal Terminal Operations and Ore penses of only those services listed Terminal Operations refers to operations above. of rail-to-water or water-to-rail transloading facilities for coal or for Administrative Support Operations ores, including related storage, blend- Subactivity—(XX–35–XX) ing, and other processing or handling (5) Administrative Support Operations at the facility. These operations in- subactivity refers to operations pro- clude loading and/or unloading rail cars viding direct administrative support to or water vessels at the facility; moving the overall Transportation activity. It commodities within the facility by includes administrative support for the

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Common, and the Specialized Services tions, internal auditing, industrial en- Operations subactivities. The adminis- gineering, and regulatory reporting. trative support operations includes re- This activity excludes expenses in- ceiving and processing customer or- curred for noncarrier operations of the ders, requesting cars, preparing way- carrier company as well as for general bills, rating shipments, billing cus- administration of the corporate entity tomers, collecting customer receiv- and nonoperating income or expenses. ables in the ordinary course of business It also excludes expenses in perform- (not to include treasury, legal, general ance of or direct support for Way and accounting, revenue accounting, or Structures, Equipment, and Transpor- credit operations, all of which are tation activities, with particular atten- chargeable to the General and Admin- tion to the Administrative Support Op- istrative activity), billing and record- erations subactivity. ing demurrage, reporting interchanges, reporting advances, and the initial re- OPERATING EXPENSE ACCOUNTS porting and summarization of input documents for purposes of cash collec- Section 3—Function Explanations tion and accounting. Any operations beyond the initial summarization and NOTE: Functions do not necessarily cor- reporting of input data are assignable relate to organizational structure. A particular department may not have a specific to the General and Administrative ac- USOA expense function code. However, its tivity except for those otherwise in- costs may be includable under various func- cluded in the definition of this sub- tion codes. Costs not properly chargeable to activity. specific functions should be assigned to Carrier staff, administrative, or cler- Function Code 99, Other. ical operations related to operating or (a) Functions Related to the Way and transportation department general ad- Structures Activity ministration should not be charged to (1) Administration Functions. this subactivity. The Administrative (02) Administration, Track—General Support Operations subactivity may be administration and supervision of cen- performed at local stations, regional tral, regional, and divisional engineer- offices, or even at the general offices; ing functions related to repair and however, the location of the operation maintenance of track. Used only in performance does not affect its nature. Way and Structures—Other. Included The operations included in this sub- are: activity should reasonably correlate to • General engineering and design. the quantity of shipments or to the • Valuation engineering for maintenance quantity of carloadings. and improvements. • Planning and supervision of repair and General and Administrative Activity— maintenance work. (XX–60–XX) • Budget preparation, clerical support, and similar functions. (D) General and Administrative activity refers to the providing of overall (03) Administration, Bridges and administration or other general sup- Buildings—General administration and port for carrier operations. It com- supervision of central, regional and di- prehends only that portion of general visional engineering functions related and administrative activities that re- to repair and maintenance of bridges lates to carrier operations (as distin- and buildings. Used only in Way and guished from noncarrier operations or Structures—Other. Included are: nonoperating activities) including ex- • General engineering and design. ecutive, legal, financial, treasury, ac- • Valuation engineering for maintenance counting, budgeting, taxation, cor- and improvements. porate planning, costing, marketing, • Planning and supervision of repair and advertising, traffic, corporate sec- maintenance work. retary, public relations, real estate, in- • Budget preparation, clerical support, and surance administration, personnel ad- similar functions. ministration, pension plan administra- (04) Administration, Signals—Gen- tion, general purchasing, labor rela- eral administration and supervision of

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central, regional, and divisional engi- fires; patrolling and inspection; road- neering functions related to repair and way relocation. maintenance of signals. Used only in (11) Repair and Maintenance, Tunnels Way and Structures—Other. Included and Subways—Repaving, ventilating, are: lighting, other maintenance. • General engineering and design. (12) Repair and Maintenance, Bridges • Valuation engineering for maintenance and Culverts—Bridges, trestles, cul- and improvements. verts and elevated structures which • Planning and supervision of repair and carry tracks; repairing, filling, dredg- maintenance work. ing, cleaning, watching these struc- • Budget preparation, clerical support, and tures. similar functions. (13) Repair and Maintenance, Ties— (05) Administration, Communica- Cross, switch, bridge, and other track tions—General administration and su- ties. This function includes expenses pervision of central, regional, and divi- associated with unloading, distributing sional engineering functions related to and placing ties in tracks. repair and maintenance of communica- (14) Repair and Maintenance, Rails tion facilities. Used only in Way and and Other Track Material—All track Structures—Other. Included are: material used in repair of tracks except ballast and ties. This function in- • General engineering and design. • Valuation engineering for maintenance cludes expenses associated with un- and improvements. loading and installing Rail and Other • Planning and supervision of repair and Track Material. maintenance work. (16) Repair and Maintenance, Bal- • Budget preparation, clerical support, and last—Gravel, stone, slag, cinders, sand, similar functions. and like material. (06) Administration, Other—General (19) Repair and Maintenance, Signals administration and supervision of cen- and Interlockers—Signals and inter- tral, regional, and divisional engineer- lockers and related apparatus gov- ing functions related to repair and erning train movement. maintenance of other roadway prop- (20) Repair and Maintenance, Com- erty. Used only in Way and Struc- munications Systems—Telephone, tele- tures—Other. Included are: graph, radio, radar, inductive train communication, and other communica- • General engineering and design. tion systems, including terminal equip- • Valuation engineering for maintenance and improvements. ment. • Planning and supervision of repair and (21) Repair and Maintenance, Power maintenance work. Systems—Power plants, substations, • Budget preparation, clerical support, and transmission and distribution systems. similar functions. (22) Repair and Maintenance, High- (2) Repair and Maintenance Func- way Grade Crossings—Highway grade tions—These functions include: crossing signals, gates, and related apparatus. • Repair and maintenance work on road (23) Repair and Maintenance, Station property and equipment, including gang fore- and Office Buildings—Station and of- man, shop foreman, and other supervisors with direct authority over workers; all high- fice buildings, fixtures, appurtenances, er levels of supervision are included in the and grounds. Administration function. (24) Repair and Maintenance, Shop • Work train service. Crew wages are to be Buildings—Locomotives—Shops and charged directly; other work train expenses buildings, fixtures, appurtenances, and except fuel may be apportioned if not solely grounds, used for the repair, mainte- identifiable to work train service. nance and servicing of locomotives. • Store expense and shop expense. (25) Repair and Maintenance, Shop (10) Repair and Maintenance, Road- Buildings—Freight Cars—Shops and way—Roadway, cuts, fills, banks, em- buildings, fixtures, appurtenances, and bankments, subgrade, roadbed, ditches, grounds, used for the repair, mainte- drains, landscaping; cutting and re- nance, and servicing of freight cars. moving grass, brush, debris; dressing (26) Repair and Maintenance, Shop ballast; preventing and extinguishing Buildings—Other—Shops and buildings,

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fixtures, appurtenances, and grounds, fences. If the amount of labor expense used for the repair, maintenance, and is not substantial, the wages of those servicing of revenue service equipment employees who perform snow removal other than locomotives and freight duties may be included in the appro- cars; roadway machines; work equip- priate expense accounts for the duties ment and the like. they are normally assigned. (27) Repair and Maintenance, Loco- (39) Dismantling Retired Property— motive Servicing Facilities—Fuel and Dismantling retired road property water stations, fixtures, appur- when the property is not to be replaced tenances, and grounds. through normal maintenance, addition (28) Repair and Maintenance, Mis- or betterment. cellaneous Buildings and Structures. (48) Road Property Damaged—Repair All permanent buildings and struc- of roadway property and structures, tures, and their fixtures, appur- used in revenue service, and all equip- tenances, and grounds, not otherwise ment not used in revenue service, when provided for. (Includes storehouses.) damage is caused by derailments, colli- (29) Repair and Maintenance, Coal sion, fire, explosions, sabotage, other Terminals—Wharves, docks, and other casualties, and excluding damage reloading or unloading facilities for han- sulting through normal operations or dling coal, including conveyors, ma- use; such as part failures, overloads, chinery and fixtures. overheating, short circuits and similar (30) Repair and Maintenance, Ore events. Part failures through normal Terminal—Wharves, docks, and other operations are those where the result- loading or unloading facilities for han- ing damage is restricted to the unit of dling ores and other bulk mineral com- road property which experienced the modities, including conveyors, machin- failure. When the damage extends to ery and fixtures. other units of road property, related (31) Repair and Maintenance, TOFC/ expenses shall be charged to this func- COFC—Terminals—TOFC/COFC ter- tion. minal structures, fixtures, machinery (3) Other Function. and appurtenances, used for transfer of (99) Other—All expenses not properly trailers and containers. includable in the above functions. (32) Repair and Maintenance, Other (b) Functions Related to the Equip- Marine Terminals—Marine terminal ment Activity structures, fixtures, machinery and ap- (1) Administrative Functions. purtenances not otherwise provided (01) Administration, General—Gen- for. eral administration and supervision of (33) Repair and Maintenance, Motor central, regional, and divisional repair Vehicle Loading and Distribution Fa- and maintenance functions. Included cilities—Buildings, structures, fixtures, are: machinery and appurtenances used for receipt, loading, unloading, and dis- • General engineering and design. • tribution of motor vehicles. Valuation engineering for maintenance (35) Repair and Maintenance Facili- and improvements. • Planning and supervision of repair and ties for Other Specialized Services Op- maintenance of equipment. erations—Buildings, structures, ma- • Budget preparation, clerical support, and chinery, fixtures and grounds, used as similar functions. part or whole of a revenue-producing specialized service. (2) Repair and Maintenance Func- (36) Repair and Maintenance, Road- tions—These functions include: way Machines—Machines and equip- • Repair and maintenance work on equipment used for repairs of roadway and ment including gang foreman, shop foreman, structures. and other supervisors with direct authority (37) Small tools and Supplies—Cost of over workers; all higher levels of supervision small tools and supplies used in repair are included in the Administrative function. • and maintenances. Store expense and shop expense. (38) Snow Removal—Removal of snow (39) Dismantling Retired Property— and ice; plow and flange service; set- Dismantling retired equipment when ting up, taking down and storing the property is not to be replaced

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through normal maintenance, addition the repair, maintenance and servicing or betterment. of locomotives. (40) [Reserved] (50) Repair and Maintenance, Shop (41) Repair and Maintenance, Loco- Machinery—Freight Cars—Repair of motives—Repair of locomotives in rev- shop machinery and other apparatus, enue service. including special foundations for the (42) Repair and Maintenance, Freight repair, maintenance and servicing of Cars—Repair of freight cars and at- freight cars. tached motor equipment in revenue (51) Repair and Maintenance, Shop service. Machinery—Other Equipment—Repair (43) Repair and Maintenance, Trucks, of shop machinery and other appa- Trailers, Containers in Revenue Serv- ratus, including special foundations for ice—Repair, inspection, and lubrica- the repair, maintenance and servicing tion of trucks, trailers and containers of other equipment. in revenue service. (3) Other Function. (44) Repair and Maintenance, Float- (99) Other—All equipment expenses ing Equipment in Revenue Service— not properly includable in the above Floating equipment including appur- functions. tenances. (c) Functions Related to the Trans- (45) Repair and Maintenance, Pas- portation Activity senger and Other Revenue Equipment— (1) Administrative Function. Repair, inspection and lubrication of (01) Administration, General—Gen- passenger train cars and attached eral administration and supervision of motor equipment, and other equipment central, regional, and divisional oper- used in revenue service. ational functions. Included are: (46) Repair and Maintenance, Com- • Planning and supervision of train, yard, puter Systems and Word Processing common, specialized services and support op- Systems—Computers and attached pe- erations. ripheral equipment; data recording and • Budget preparation, clerical support, and punch-card processing equipment; word similar functions. processing equipment. [Not applicable to the Train and Yard (47) Repair and Maintenance, Work Common Subactivity.] and Other Non-Revenue Equipment— (2) Operations Functions. Rail and floating work equipment and (56) Engine Crews—Operation of appurtenances, and all other equip- trains in line-haul revenue service by ment not used in revenue service and enginemen, including crew meals, lodg- not provided for elsewhere. ing, deadheading and other expenses. (48) Equipment Damaged—Repair of (57) Train Crews—Operation of trains locomotives, freight cars, other equip- in line-haul revenue service by train- ment used in revenue service, and all men, including crew meals, lodging, equipment not used in revenue service, deadheading, and other expenses. when damage is caused by derailment, (58) Dispatching Trains—Costs in- collision, fire, explosions, sabotage, clude dispatchers, supporting staff, washouts, or other casualties, and ex- train order stations and operators, of- cluding damage resulting through nor- fice and supplies expense. mal operations or use, such as part (59) Operating Switches, Signals, failures, overloads, overheating, short Interlockers, Retarders, Humps—Oper- circuits and the like. Part failures ators, switch tenders, supplies, etc. through normal operations are those (60) Operating Drawbridges—Engi- where the resulting damage is re- neers, tenders, watchmen, supplies, etc. stricted to the equipment that experi- (61) Highway Crossing Protection— enced the failure. When the damage ex- Gatekeepers, flagmen, lighting, sup- tends to other units of equipment, re- plies, etc. lated repairs shall be charged to this (62) Train Inspection and Lubrica- function. tion—Inspection and lubrication of (49) Repair and Maintenance, Shop trains (cars and locomotives), includ- Machinery—Locomotives—Repair of ing minor repairs made by inspectors. shop machinery and other apparatus, This includes the inspection of train lo- including special foundations used for comotives when indistinguishable from

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the inspection and lubrication of train ation of trucks, floating equipment, cars. and all other specialized equipment (63) Clearing Wrecks—Removal of providing line haul movement for rev- equipment, freight or other goods, and enue including TOFC/COFC pick-up property of others damaged in wrecks; and delivery. note that repair of wreck damage (74) Loading & Unloading and Local caused to roadway property and equip- Marine—All other specialized services ment is classified as function Code 48— in the transportation activity such as Road Property and Equipment Dam- TOFC/COFC loading, unloading, and tie aged. down; coal and ore loading and unload- (64) Switch Crews—Operation of ing; and other similar functions. trains and locomotives in yard and ter- (75) Protective Services—Inspecting, minal revenue switching service by servicing, cleaning, and fueling protec- enginemen and trainmen, including as- tive equipment and devices. sociated expenses. (76) Clerical and Accounting Employ- (65) Controlling Operations—Direct- ees—Direct administrative support to ing the operations of yard and terminal the Transportation Activity, including interchange and classification service, receiving and processing customer or- including office and supplies expense. ders, requesting cars, preparing way- (66) Yard and Terminal Clerical— bills, rating shipments, billing cus- Clerical work in support of the oper- tomers, collecting customer receiv- ation of yard and terminal switching ables in the ordinary course of busi- and classification service, including of- ness, billing and recording demurrage, fice and supplies expense. reporting interchanges, reporting ad- (67) Locomotive Fuel—Cost of loco- vances, and the initial summarization motive fuel used in all service, includ- and reporting of input data. ing the receipt, storage, and dispensing (77) Communications Systems Oper- of the fuel. ation—Cost of operating communica- (68) Electric Power Purchased/Pro- tions systems; when such operations duced for Motive Power—Purchase cost are an integral part of other functions, and cost of producing electric power for only specifically identifiable costs of use by electrically-powered motive operating communications systems are equipment in all service. to be allocated to this function. (69) Servicing Locomotives—Pre- (78) Loss and Damage Claims Proc- paring locomotives for switching serv- essing—Receipt, investigation, other handling, and adjustment and settle- ice in yards and for train service, in- ment of claims for loss or damage of cluding moving locomotives around en- freight or other goods carried in rev- gine yards. This includes the inspec- enue service. Does not include handling tion and lubrication of yard loco- claims for personal injury or for loss or motives and may include the inspec- damage of other property. tion and lubrication of train loco- (3) Other Function. motives where distinguishable from the (99) Other—All transportation ex- inspection and lubrication of train penses not properly includable in the cars. above functions. (70) Cleaning Car Interiors—Cleaning (d) Functions Related to the General and preparing car interiors for revenue and Administration Activity service, including minor repairs made (1) Administrative Function. by car cleaners. This includes payment (01) Administration, General—Gen- for cleaning cars due to spoilage of per- eral administration and supervision of ishable shipments. central, regional, and divisional gen- (71) Adjusting and Transferring eral functions. Included are: Loads—Transferring, picking up, straightening, and reloading freight in • Planning and supervision of general and the ordinary course of transportation. administrative functions. • (72) Car Loading Devices and Grain Budget preparation, clerical support, and similar functions. It includes the overall re- Doors—Servicing car loading devices sponsibility for two or more of the General and placing and removing grain doors. and Administrative functions listed below or (73) Pickup & Delivery, Marine Line the responsibility that expands to more than Haul & Rail Substitute Service—Oper- one activity.

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(2) General Functions. (94) Research and Development—Re- (86) Accounting, Auditing, Finance— search into the use of methods, proce- General and corporate accounting, au- dures, practices, equipment, machinery diting by internal auditors and outside tools, and plant, and in determining accountants, treasury, tax accounting and measuring the impact of factors or and returns, financial reporting, cor- costs not previously known, with the porate planning related to investment intention of finding ways to improve decisions and budgeting. maintenance, operations, administra- (87) Management Services and Data tion, rates, productivity, environ- and Word Processing—Systems plan- mental impact, and similar items. Does ning and design, programming, com- not include specific studies or develop- puter operations, data control, key ment efforts for which an implementa- entry of data, and related activities; tion decision has already been made. This includes operating expenses asso- (3) Other Function. ciated with a particular computer sys- (99) Other—All general and adminis- tem or word processing equipment that tration expenses not properly includ- is dedicated to more than one activity. able in the above functions. This does not include expenses associated with computer systems or word INCOME ACCOUNTS processing equipment dedicated exclusively to the Way and Structure, Ordinary Items Equipment or Transportation Activity; these expenses shall be charged to the 501 Railway operating revenues. appropriate subactivity/function. This account is a summarization of (88) Marketing—Market planning and Railway Operating Revenue Accounts analysis, traffic analysis, costing, pric- 101 to 122. It excludes transfers from ing, and related activities. governmental authorities except when (89) Sales—Traffic solicitation and the transfer payment is for specific related sales efforts. services for transporting property or (90) Industrial Development—Efforts persons by rail line other than com- to locate industries on real estate ac- muter operations and local rail service cessible to the railroad’s lines for the subsidies granted under authority of purpose of creating future revenues. the Railroad Revitalization and Regu- (91) Personnel and Labor Relations— latory Reform Act of 1976 [See Instruc- Efforts to attract and retain employ- tion 1–15(e)(2)]. ees, handle fringe benefit plans, monitor and negotiate labor contracts, [52 FR 4346, Feb. 11, 1987] maintain employee data and records, coordinate training programs, handle 502 Railway operating revenues— grievances, handle employee transfers, transfers from government authori- operate job safety and equal oppor- ties for current operations. tunity programs, and related activi- This account shall include amounts ties. received or receivable from Federal, (92) Legal and Secretarial—Legal state, or municipal authorities which functions handled by attorneys and are specifically designated to offset op- supporting staff; including lawsuits, in- erating expenses, or which may be ap- jury and damage claims, commerce plied at the discretion of the railroad matters, and similar functions; cor- to operating expenses and/or railroad porate secretarial functions involving property. shareholder records, corporate min- This account shall also include utes, stock certificates, and similar amounts received from government au- items. thorities to offset operating costs sus- (93) Public Relations and Adver- tained on specific lines or in certain re- tising—Public relations activities with gions. Examples are: (1) Local Rail governmental bodies, shippers, and the Service Assistance Subsidies granted general public; advertising in the to the carrier under authority of the media, booklets, publications; open Railroad Revitalization and Regu- houses and tours; and similar activi- latory Reform Act of 1976, and (2) pay- ties. ments by regional transit authorities

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in connection with specified operations NOTE B: The rent from property carried in performed by the carrier. account 737, Property used in other than car- This account shall also include indi- rier operations, shall not be included in this rect receipts which reduce operating account. Such rents shall be included in account 506, Revenues from property used in expenses, such as assumption of station other than carrier operations. maintenance costs, abatement of taxes, NOTE C: Rent and other income from real or other indirect contributions by gov- estate acquired for new lines or for additions ernment agencies, if clearly identifi- and betterments shall be credited to the ap- able and measurable. propriate road and equipment accounts until NOTE: This account shall not include re- the completion or coming into service of the ceipts from government authorities des- property. ignated for the acquisition, addition to, or NOTE D: Rent and other income from real improvement of railway operating property. estate acquired for new lines or for additions (See instruction 1–15.) and betterments shall be credited to the appropriate road and equipment accounts until (49 U.S.C. 304, 320) the completion or coming into service of the [43 FR 30558, July 17, 1978] property. [42 FR 35017, July 7, 1977, as amended at 52 503 Railway operating revenues—am- FR 4346, Feb. 11, 1987] ortization of deferred transfers from government authorities. 512 Separately operated properties; This account shall include the amor- profit. tization applicable to amounts rep- (a) This account shall include resenting the cost of acquisition, addi- amounts earned under the terms of tion to, or improvement of depreciable agreements or contracts whereby the operating property received from Fed- net income resulting from the oper- eral, state, or municipal authorities. ation by others or properties of other (See instruction 1–15, and account 783, companies having a separate corporate ‘‘Deferred Revenues—Transfers from existence is to be paid, in whole or in Government Authorities.’’) part, to the accounting company. (49 U.S.C. 304, 320) (b) In determining the amount earned by the accounting company, consider- [43 FR 30558, July 17, 1978] ation shall be given not only to the op- 506 Revenues from property used in erating revenues and operating ex- other than carrier operations. penses but also to other items of income or deduction which affect that This account shall include the total amount. revenues derived from property used in other than carrier operations, the cost NOTE A: The amount payable by the oper- of which is includible in balance-sheet ating company shall be charged by it to account 550, Income Transferred under Con- account 737, ‘‘Property used in other tracts and Agreements. than carrier operations.’’ NOTE B: Dividends or other returns upon securities issued by separately operated 510 Miscellaneous rent income. companies, and held or controlled by the ac- (a) This account shall include such counting company, shall be included in ac- rents of property owned and controlled counts 513, ‘‘Dividend income,’’ 514, ‘‘Interest by the accounting carrier as are not income,’’ or 516, ‘‘Income from sinking and provided for in the foregoing accounts. other funds,’’ as may be appropriate. (b) This account shall be charged [42 FR 35017, July 7, 1977, as amended at 52 with the cost of maintenance of the FR 4347, Feb. 11, 1987] property rented, also specific incidental expenses in connection with 513 Dividend income. such property, such as the cost of nego- (a) This account shall include divi- tiating contracts, advertising for ten- dends declared on railway and other ants, fees paid conveyancers, collec- stocks, the income from which is the tors’ commissions, and analogous property of the accounting company, items. whether such stocks are owned by the NOTE A: Taxes on property the rent of accounting company and held in its which is creditable to this account shall be treasury or deposited in trust, or are charged to account 64–61–00, Property Taxes. controlled through lease or otherwise.

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(b) Dividends declared shall not be NOTE A: This account shall not include in- credited prior to actual collection un- terest on securities issued or assumed by the less their payment is reasonably as- accounting company and owned by it, whether pledged as collateral or held in its treas- sured by past experience, guaranty, an- ury, in special deposits, or in sinking or ticipated provision, or otherwise. (See other funds. note C to account 708, ‘‘Interest and NOTE B: Interest on securities other than dividends receivable.’’) those of the accounting company, and on (c) Accruals of guaranteed dividends other assets held in sinking or other funds may be included in this account if their shall be included in account 516, ‘‘Income payment is reasonably assured. from sinking and other funds.’’ NOTE C: Discount on bills for material pur- NOTE A: This account shall not include chased shall be credited to the accounts to credits for dividends on stocks issued or as- which is charged the cost of the material sumed by the accounting company and with respect to which the discount is al- owned by it, whether pledged as collateral or lowed. held in its treasury, in special deposits, or in sinking or other funds. 516 Income from sinking and other NOTE B: Dividends on stocks of other com- funds. panies held in sinking or other funds shall be (a) This account shall include the in- credited to account 516, ‘‘Income from sink- come on cash, securities, and other as- ing and other funds.’’ sets (not including securities issued or 514 Interest income. assumed by the accounting company) held in sinking and other funds. (See (a) This account shall include the in- note C to account 708, ‘‘Interest and terest on securities and debenture dividends receivable.’’) stock of other companies, the income (b) At the option of the accounting from which is the property of the ac- company there may be included each counting company whether such secu- year in this account the portion, appli- rities are owned by the accounting cable to the fiscal period, of the company and held in its treasury or de- amount requisite to extinguish, during posited in trust, or are controlled the interval between the date of acqui- through lease or otherwise. sition and the date of maturity, the (b) The account shall also include in- discount or premium on funded securi- terest on notes and other evidences of ties held in sinking or other funds. indebtedness and interest on bank bal- Amounts thus credited or charged shall ances, open accounts, and other analo- be concurrently charged or credited to gous items, including discount or the account in which the cost of the se- short-term notes. Interest shall not be curities is carried. accrued unless its payment is reasonably assured by past experience, guar- 517 Release of premiums on funded anty, anticipated provision, or other- debt. wise. (See note C to account 708, ‘‘In- This account shall include, during terest and dividends receivable.’’) each fiscal year, such proportion of the (c) At the option of the accounting premiums on outstanding funded debt company there may be included each as may be applicable to the period. year in this account the portion, appli- (See instruction 5–3.) cable to the fiscal period, of the amount requisite to extinguish, during 518 Reimbursement received under the interval between the date of acqui- contracts and agreements. sition and the date of maturity, the (a) This account shall include discount or premium on securities of amounts received or receivable from other companies owned (other than other companies or individuals, rep- short-term notes). Amounts thus cred- resenting the whole or a part of the net ited or charged shall be concurrently loss of the accounting company, when charged or credited to the account in under the terms of agreements or con- which the cost of the securities is car- tract, no obligation for subsequent re- ried. The discount on short-term notes imbursement is incurred. shall be distributed through equal (b) In determining the amount re- monthly credits, over the terms of the ceivable by the accounting company, notes. consideration shall be given not only

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to the operating revenues and oper- count 506, Revenues from property used in ating expenses, but also to other items other than carrier operations. of income or deduction which affect [42 FR 35017, July 7, 1977, as amended at 52 that amount. FR 4347, Feb. 11, 1987] NOTE: The amount payable shall be charged by the contributing company to ac- 544 Miscellaneous taxes. count 545, ‘‘Separately operated properties— This account shall include all accru- Loss.’’ als for taxes not provided for else- [42 FR 35017, July 7, 1977, as amended at 52 where, such as taxes on securities FR 4347, Feb. 11, 1987] owned, and taxes on income from securities owned. 519 Miscellaneous income. (a) This account shall include all 545 Separately operated properties; items, not provided for elsewhere, prop- loss. erly creditable to income accounts dur- (a) This account shall include ing the current year. Among the items amounts payable under the terms of which shall be included in this account agreements or contracts whereby the are: net loss resulting from the operation Cancellation of balance sheet accounts rep- by others of properties of other compa- resenting unclaimed wages and vouchered nies having a separate corporate exist- accounts written off because of carrier’s in- ence is to be paid, in whole or in part, ability to locate the creditor. by the accounting company. Profit from sale of securities carried as (b) In determining the amount pay- temporary cash investments. able by the accounting company, con- Profit from sale of land used for transpor- sideration shall be given not only to tation purposes, of noncarrier property and of securities acquired for investment pur- the operating revenues and operating poses. expenses, but also to other items of in- Profit from company bonds reacquired. come or deductions which affect that Decreases in the valuation allowance (con- amount. tained within account 702) for the market- NOTE A: The amounts receivable by the op- able equity securities included in current as- erating company shall be credited by it to sets. account 518, Reimbursements received under (b) Gains from extinguishment of contracts and agreements. debt shall be aggregated and, if mate- NOTE B: Dividends or other returns upon rial, credited to account 570, ‘‘Extraor- securities issued by separately operated companies and held or controlled by the ac- dinary Items,’’ upon approval by the counting company shall not be included in Board; however, gains from extinguish- this account to offset a deficit payable, but ment of debt (excluding debt maturing in accounts 513, ‘‘Dividend income,’’ or 514, serially) which is made to satisfy sink- ‘‘Interest income,’’ as may be appropriate. ing fund requirements, shall be re- [42 FR 35017, July 7, 1977, as amended at 52 corded in this account regardless of FR 4347, Feb. 11, 1987] amount. 546 Interest on funded debt. 531 Railway operating expenses. This account shall include the cur- This account shall include total ex- rent accruals of interest on all classes penses caused by operations, as shown of long-term debt, the principal of in the primary expense accounts pro- which is includable in accounts 765, vided in these regulations. Funded debt unmatured; 766, Equip- ment obligations; 767, Receivers’ and 534 Expenses of property used in trustees’ securities; 768, Debt in de- other than carrier operations. fault; and 769, Accounts Payable; affili- This account shall include deprecia- ated companies. tion, rent, taxes, and other expenses in- NOTE A: This account shall not include curred on property used in other than charges for interest on funded debt obliga- carrier operations. tions issued or assumed by the accounting NOTE: If property for which rent expense is company and owned by it, whether pledged includable in this account is sublet, the rent as collateral or held in its treasury, in spe- from the sublease shall be included in ac- cial deposits, or in sinking or other funds.

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NOTE B: When funded debt is incurred for to that period so long as any portion of new lines or extensions, or for addition and the discount remains unextinguished. betterment purposes, the accruals of interest However, the entire amount for the dis- on such funded debt (less interest received on unexpended balances), to the date of comple- count and expense applicable to any tion or coming into service of the property particular issue of obligations may be so acquired shall be includable in the road charged directly to this account at and equipment accounts. time of issue when the aggregate of NOTE C: This account shall be maintained such amounts does not appreciably af- so as to show separately: (a) Fixed interest fect the accounts. (See instruction 5– which will be paid, or for which provision for 3(b).) payment will be made, when the interest matures; (b) interest in default; and (c) contin- 549 Maintenance of investment orga- gent interest determined to be payable. nization. [42 FR 35017, July 7, 1977, as amended at 52 FR 4347, Feb. 11, 1987] This account shall include the directly assignable administration ex- 547 Interest on unfunded debt. penses of the accounting company This account shall include interest which are incident to its investments accrued on unfunded debt, such as in leased or nonoperating physical short-term notes payable on demand or property, and in stocks, bonds, or other having maturity dates of one year or securities. less from dates of issue, and open ac- ITEMS OF EXPENSE counts, including discount and expense on demand and short-term loans, inter- Advertising annual reports (lessor companies only). est on receipts outstanding for install- Calls for bonds in accordance with sinking ments paid on capital stock, interest fund provisions of mortgages. on deferred payments for public im- Directors’ fees. provements, interest on tax defi- Printing and mailing dividend checks. ciencies, overcharge claims and court Publishing and mailing annual reports and awards, and other analogous items. other corporate statements to share- The discount on short-term notes, if of holders. a considerable amount shall be distrib- Publishing notices of declaration of dividends. uted through equal monthly charges, Law expenses. over the term of the notes. Office expenses. NOTE: When short-term notes or other evi- Salaries of officers, clerks, and attendant. dences of unfunded indebtedness are issued Stationery and printing. for new lines or extensions or for addition NOTE: Administration expenses incident to and betterment purposes the accrual of in- railway operation are includible in the pri- terest to the date of completion or coming mary accounts provided for in operating ex- into service of the property shall be included pense general account series 60–00–00. in the road and equipment accounts. [42 FR 35017, July 7, 1977, as amended at 52 550 Income transferred under con- FR 4347, Feb. 11, 1987] tracts and agreements. (a) This account shall include the 548 Amortization of discount on fund- whole or any portion of the income of ed debt. the accounting company payable to an- (a) This account shall be charged dur- other company under the terms of ing each fiscal period with the propor- agreements or contracts without obli- tion of the discount on funded debt ob- gation for reimbursement. ligations applicable to that period. (b) In determining the amount pay- This proportion shall be determined ac- able by the accounting company, con- cording to a rule the uniform applica- sideration shall be given not only to tion of which through the interval be- operating revenues and operating ex- tween the date of sale and the date of penses, but also to other items of in- maturity will extinguish the discount come or deduction which affect that on funded debt. amount. (b) The charge to this account for NOTE A: The amount receivable by the any period must not be either greater other company shall be credited by it to ac- or less than the proportion of the bal- count 512, ‘‘Separately operated properties— ance remaining unamortized applicable Profit.’’

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NOTE B: Dividends or other payments upon 553 Uncollectible accounts. securities issued or assumed by the accounting company shall not be included in this ac- This account shall include losses on count. receivable, notes, or claims that are not includible in account 63–61–00. [42 FR 35017, July 7, 1977, as amended at 52 FR 4347, Feb. 11, 1987] ‘‘General—Uncollectible Accounts— General and Administrative.’’ 551 Miscellaneous income charges. 555 Unusual or infrequent items (a) This account shall include items, (debit) credit. not otherwise provided for in the other income accounts. This includes: This account shall include material items unusual in nature or infrequent Income tax on the interest on the accounting in occurrence, but not both, accounted company’s funded debt when these taxes are assumed by the company. for in the current year in accordance Payments of old accounts previously written with the text of instruction 1–2(d), off. upon approval by the Board. Penalties and fines for violation of the Inter- state Commerce Act or other federal and 556 Income taxes on ordinary income. state laws. This account shall include accruals Loss on sale of securities carried as temporary cash investments. for Federal, State and other income Loss on sale of land used for transportation taxes applicable to ordinary income. purposes and of noncarrier property. See the text of account 590, for record- Loss on sale of securities acquired for investing other income tax consequences. ment purposes, and charges to write down the ledger value of such securities because 557 Provision for deferred taxes. of impairment in their value. Loss from company bonds reacquired. (a) This account shall include the net Increases in the valuation allowance (con- tax effect of all material timing dif- tained within account 702) for the market- ferences [See definition 17(e)] origi- able equity securities included in current nating and reversing in the current ac- assets. counting period and the future tax ben- Contributions for charitable, social, efits of loss carryforwards recognized or community welfare purposes that do in accordance with Instruction 1–10. not have a direct relation to the pro- (b) This account shall include credits tection of company property, develop- for the amortization of the investment ment of its business, or welfare of its tax credit if the carrier elected to use employees. the deferred method of accounting for (b) Losses from extinguishment of the investment tax credit. (See instruc- debt shall be aggregated and, if mate- tion 1–10.) rial, charged to account 570, ‘‘Extraor- [42 FR 35017, July 7, 1977, as amended at 52 dinary Items (net),’’ upon approval by FR 4347, Feb. 11, 1987; 67 FR 57533, Sept. 11, the Board; however, losses from extin- 2002] guishment of debt (excluding debt maturing serially) which is made to sat- 560 Income or loss from operations of isfy sinking fund requirements, shall discontinued segments. be included in this account regardless This account shall include the results of amount. of operations of a segment of a business (c) Contributions for charitable, so- (see definition 32(a)), after giving effect cial, or community welfare purposes to income tax consequences, that has that have a direct relation to the pro- been or will be discontinued in accord- tection of company property, develop- ance with the text of instruction 1–2(d), ment of its business, or welfare of its upon approval by the Board. employees should be charged to account 61–61–99, Other Expenses—Gen- 562 Gain or loss on disposal of discon- eral and Administrative—Other. tinued segments. (49 U.S.C. 12, 20, 304, 913, and 1012) This account shall include the gain [42 FR 35017, July 7, 1977, as amended at 42 or loss from the disposal of a segment FR 64350, Dec. 23, 1977; 52 FR 4347, Feb. 11, of a business, after giving effect to in- 1987; 67 FR 57533, Sept. 11, 2002] come tax consequences, in accordance

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with the text of instruction 1–2(d), 592 Cumulative effect of changes in upon approval by the Board. accounting principles. [42 FR 35017, July 7, 1977, as amended at 67 This account shall include the cumu- FR 57533, Sept. 11, 2002] lative effect of changing to a new accounting principle, after giving effect 570 Extraordinary items (net). of income tax consequences, in accordance with instruction 1–2(d), upon ap- (a) This account shall include ex- proval by the Board. traordinary items accounted for during the current accounting year in accord- FORM OF INCOME STATEMENT ance with the text of instruction 1–2(d), I. Ordinary Items upon submission of a letter from the 501 Railway operating revenues (exclusive of trans- carrier’s independent accountants, ap- fers from government authorities) ...... 503 Railway operating revenues (amortization of proving or otherwise commenting on deferred transfers from government authorities) ...... the item and upon approval by the 502 Railway operating revenues (amortization of Board. deferred transfers from government authorities ...... 531 Railway operating expenses ...... (b) This account shall be maintained in a manner sufficient to identify the Net Revenue from Railway Operation 1 ...... nature and gross amount of each debit and credit. II. Other Income 506 Revenues from property used in other than car- (c) Income tax consequences of rier operations ...... charges and credits to this account 510 Miscellaneous rent income ...... shall be recorded in account 590, ‘‘In- 512 Separately operated properties—profit ...... 513 Dividend income ...... come taxes on extraordinary items,’’ or 514 Interest income ...... account 591, ‘‘Provision for deferred 516 Income from sinking and other funds ...... 517 Release of premiums on funded debt ...... taxes—extraordinary items.’’ 518 Reimbursements received under contracts and agreements ...... 590 Income taxes on extraordinary 519 Miscellaneous income ...... items. Income from affiliated companies: Dividends ...... This account shall include the esti- Equity in undistributed earnings (losses) ...... mated income tax consequences (debit Total income from affiliated companies ...... or credit) assignable to the aggregate of items of both taxable income and de- Total other income ...... ductions from taxable income which Total income ...... for accounting purposes are classified as unusual and infrequent, and are re- III. Miscellaneous Deductions From Income corded in account 570, ‘‘Extraordinary 534 Expenses of property used in other than carrier Items (Net).’’ The tax effect of any tim- operations ...... 535 Taxes on property used in other than carrier ing differences caused by recognizing operations ...... an item in the account provided for ex- 543 Miscellaneous rent expense ...... 544 Miscellaneous taxes ...... traordinary items in different periods 545 Separately operated properties-loss ...... in determining accounting income and 549 Maintenance of investment organization ...... taxable income shall be included in ac- 550 Income transferred under contracts and agreements ...... count 591, ‘‘Provision for deferred 551 Miscellaneous income charges ...... taxes—extraordinary items.’’ 553 Uncollectible accounts ......

591 Provision for deferred taxes—ex- Total miscellaneous deductions ...... traordinary items. Income available for fixed charges ...... This account shall include debits or IV. Fixed Charges credits for the current accounting pe- 546 Interest on funded debt: (a) Fixed interest not in default ...... riod for income taxes deferred cur- (b) Interest in default ...... rently, or for amortization of income 547 Interest on unfunded debt ...... taxes deferred in prior accounting peri- 548 Amortization of discount on funded debt ...... ods applicable to items of revenue or Total fixed charges ...... expense included in account 570, ‘‘Ex- Income after fixed charges ...... traordinary Items (Net).’’ (See instruc- V. Other Deductions tion 1–10.) 546 Interest on funded debt: (c) Contingent interest ...... 107

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FORM OF INCOME STATEMENT—Continued 601.5 Prior period adjustments to be- VI. Unusual or Infrequent Items ginning retained earnings account. 555 Unusual or infrequent items (debt) credit ...... This account shall include adjust- Income (loss) from continuing operations (before ments net of assigned income taxes, in income taxes) ...... accordance with the text of instruction VII. Provision for Income Taxes 1–2(d), to the balance in the retained 556 Income taxes on ordinary income: earnings account at the beginning of Federal income taxes ...... the calendar year, upon approval by State income taxes ...... the Board. Other income taxes ...... 557 Provision for deferred taxes ...... Income from continuing operations ...... 602 Credit balance transferred from income. VIII. Discontinued Operations 560 Income or loss from operations of discontinued This account shall show the net cred- segments (less applicable income taxes of $lll ...... it balance brought forward from the in- 562 Gain or loss on disposal of discontinued seg- come account for the calendar year. ments (less applicable income taxes of $lll ...... 603 Appropriations released. Income (loss) before extraordinary items ...... This account is provided to return to IX. Extraordinary Items and Accounting Changes unappropriated retained earnings the 570 Extraordinary items (net) ...... amount of appropriations no longer re- 590 Income taxes on extraordinary items ...... quired. The account shall be subdivided 591 Provision for deferred taxes—extraordinary to show the nature of the appropria- items ...... tions being released and the cir- Total extraordinary items ...... cumstances of the release shall be fully described. 592 Cumulative effect of changes in accounting principles (less applicable income taxes of $lll ...... 606 Other credits to retained earnings.

Net income ...... This account shall include other credit adjustments, net of assigned in- 1 Reconciliation of net railway operating income come taxes, not provided for elsewhere (NROI): in this system but only after such in- Net revenues from railway operations ...... clusion has been authorized by the (556) Income taxes on ordinary income ...... (557) Provision for deferred income taxes ...... Board. (560) Taxes applicable to income or loss from operations of discontinued segments ...... Debit (562) Taxes applicable to gain or loss on disposal of discontinued segments ...... Income from lease of road and equipment (for- 611 Debit balance (at beginning of cal- merly account 509) ...... endar year). Rent for leased roads and equipment (formerly account 542) ...... This account shall include the net debit balance in the retained earnings Net railway operating income ...... account at the beginning of the calendar year. (49 U.S.C. 304, 320) [42 FR 35017, July 7, 1977, as amended at 43 612 Debit balance transferred from in- FR 30558, July 17, 1978; 67 FR 57533, Sept. 11, come. 2002] This account shall show the net debit balance brought forward from the in- RETAINED EARNINGS ACCOUNTS come account for the calendar year. 616 Other debits to retained earnings. Credit (a) This account shall include losses from resale of reacquired capital stock, 601 Credit balance (at beginning of and charges which reduce or write-off calendar year). discount on capital stock issued by the This account shall include the net company, but only to the extent that credit balance in the retained earnings such charges exceed credit balances in account at the beginning of the cal- account 795, ‘‘Other capital,’’ applica- endar year. ble to net gains from reacquisition and 108

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resale or retirement of such subclass of GENERAL BALANCE SHEET capital stock. See instruction 5–4. ACCOUNTS EXPLANATIONS (b) This account shall also include other debit adjustments, net of as- Assets signed income taxes, not provided for elsewhere in this system but only after CURRENT ASSETS such inclusion has been authorized by the Board. 701 Cash. 620 Appropriations for sinking and (a) This account shall include money, other funds. checks, sight drafts, and sight bills of exchange in the hands of the account- This account shall be charged and ac- ing company’s financial officers and count 797, ‘‘Retained earnings; Appro- agents, or in transit from its agents priated,’’ shall be credited with and conductors for which such agents amounts appropriated pursuant to pro- and conductors have received credit. It visions of reorganization plans, mort- shall include, also, deposits with banks gages, deeds of trust, or other con- and trust companies available for use tracts requiring payments into sinking on demand, and savings accounts sub- funds, capital funds, and other funds. ject to the usual clause reserving the right to defer payment for a specified 621 Appropriations for other pur- number of days. poses. (b) The amount of checks and drafts, This account shall be charged and ac- which have been transmitted to payees count 797, ‘‘Retained earnings; Appro- and which remain unpaid at the close priated,’’ shall be credited with the of the accounting period, shall be cred- amount of appropriations for general ited to this account. When the amount contingencies, indefinite possible fu- of such checks and drafts cannot be de- ture losses and other corporate pur- termined with absolute accuracy, an estimate of the amount shall be used. poses not provided for elsewhere. The Amounts not transmitted to payees appropriations shall be released when shall be included in the appropriate li- their respective purposes have been ability accounts. served. NOTE: Compensating balances under an agreement which legally restricts the use of 623 Dividends. such funds shall not be included in this ac- This account shall be charged with count. Such balances shall be included in ac- the amount of dividends declared on count 703, ‘‘Special Deposits,’’ or 717, ‘‘Other actually outstanding capital stock Funds,’’ as appropriate. issued or assumed by the company. If 702 Temporary cash investments. the dividend is not payable in cash, the securities or other property to be This account shall include the cost of distribruted shall be described with securities and other obligations ac- sufficient particularity to identify the quired for the purpose of temporarily investing cash, such as United States distribution. This account shall be sub- Treasury certificates, marketable secu- divided to show separately the divi- rities, time drafts receivable, demand dends declared on the various sub- loans, time loans, time deposits with classes of capital stock. banks and trust companies, and other NOTE: This account shall not include similar investments of a temporary charges for dividends on capital stock issued character, which are readily convert- or assumed by the company and owned by it, ible into cash at substantially their re- whether pledged as collateral or held in its corded cost. treasury, in special deposits, or sinking or other funds. This account shall be subdivided to reflect the marketable equity securities portion (and its corresponding valuation allowance) and other temporary investments. (See instruction 5– 2.)

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703 Special deposits. NOTE: The amount to be entered in this account is not the net balance between this ac- This account shall include cash de- count and account 752, ‘‘Accounts payable; posits, either placed in the hands of Interline and other balances.’’ Net credit bal- trustees or under the direct control of ances payable to other companies shall be in- the reporting company, which are re- cluded in account 752. stricted for specific purposes. Examples are those deposits made for the pay- 706 Accounts receivable; customers. ment of dividends and interest due This account shall include amounts within one year, the liquidation of currently due from customers for other current liabilities, to guarantee transportation and other charges inci- fulfillment of current contract obliga- dental to transportation, and from tions to meet specific operating re- agents and other representatives quirements, or compensating balances charged with the collection or custody (See definition 10) under an agreement of current revenues. which legally restricts the use of such NOTE: Amounts advanced to general and funds, and which constitute support for special agents as working funds shall be in- short-term borrowing arrangements. cluded in account 710, ‘‘Working funds.’’ Subaccounts may be set up, if necessary, to account for special deposits 707 Accounts receivable; other. for specific purposes. This account shall include amounts NOTE: Deposits available for general company purposes shall be included in account due in audited accounts, such as those 701, ‘‘Cash.’’ due from the United States or other Governments for the transportation of [42 FR 35017, July 7, 1977, as amended at 67 FR 57533, Sept. 11, 2002] mails and Government property, and from express companies for express fa- 704 Loans and notes receivable. cilities furnished under contract; miscellaneous bills against other railway This account shall include the book companies, corporations, firms, and in- value of all collectible obligations in dividuals; and other similar items. the form of demand or time loans and notes receivable, or other similar evi- NOTE A: The amount to be entered in this dences (except interest coupons) of account is not the net balance between this money receivable within a time not ex- account and account 754, ‘‘Accounts payable; Other.’’ ceeding one year from date of issue. NOTE B: Amounts due from affiliated com- NOTE A: Current loans and notes receivable panies for miscellaneous bills and other from affiliated companies shall be included items subject to current settlement shall be in account 708.5, ‘‘Receivables from affiliated included in account 708.5, ‘‘Receivables from companies.’’ affiliated companies.’’ NOTE B: Obligations held as investments which mature more than one year after date 708 Interest and dividends receivable. of issue shall be included in accounts 721, ‘‘Investments and advances: Affiliated com- This account shall include the panies,’’ or 722, ‘‘Other investments and ad- amount of interest accrued to the date vances,’’ as appropriate. of the balance sheet on bonds, mort- NOTE C: Loans and notes receivable ac- gages, notes, and other commercial quired for the purpose of temporarily invest- paper owned, on loans made, open ac- ing cash shall be included in account 702, counts, bank deposits, and the amount ‘‘Temporary cash investments.’’ of dividends declared on stocks owned, 705 Accounts receivable; interline and and dividends accrued on such stocks other balances. when contracts require that the dividends be paid at stated times. This account shall include the net debit balances receivable from other NOTE A: No amount representing interest companies representing items such as or dividends receivable shall be included in interline freight, passenger, switching, this account unless its payment is reasonably assured by past experience, anticipated and baggage revenues, charges for provision, or otherwise. equipment interchanged on a per diem NOTE B: No dividends or other returns on or mileage basis, and charges, for car securities issued or assumed by the account- repairs, loss and damage freight ing company shall be included in this ac- claims, and overcharge claims. count.

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NOTE C: If settlement of amounts included may become uncollectible, and shall be in this account is not made when due, such maintained to show the amount of each amounts that are not subject to current set- separate allowance set out below and tlement shall be transferred to account 741, the amounts of debits and credits ‘‘Other assets,’’ at their estimated realizable value. Items of current character but of thereto: doubtful value, as well as noncurrent items, (a) Allowance for receivables applica- shall be written off to the extent of any esti- ble to transportation operations. Cred- mated uncollectible portion by charge to ac- its to this subdivision shall be concur- count 553, ‘‘Uncollectible accounts’’. If notes rently charged to account 63–60–00, are taken in settlement of amounts included ‘‘Uncollectible Accounts; General and in this account, the amounts shall be transferred to account 704, ‘‘Loans and notes re- administrative.’’ ceivable,’’ or account 741, as appropriate. (b) Allowances for receivables not ap- (See instruction 5–1.) plicable to transportation operations. NOTE D: Current interest and dividends re- Credits to this subdivision shall be con- ceivable from affiliated companies shall be currently charged to account 553, ‘‘Un- included in account 708.5, ‘‘Receivables from collectable accounts.’’ affiliated companies,’’ and noncurrent amounts receivable shall be included in ac- [42 FR 35017, July 7, 1977, as amended at 67 count 721, ‘‘Investments and advances; Affili- FR 57533, Sept. 11, 2002] ated companies.’’ 710 Working funds. 708.5 Receivables from affiliated companies. This account shall include amounts advanced to general and special agents, This account shall include amounts and to other officers and employees, as due from affiliated companies which working funds from which certain ex- are subject to current settlement such penditures are to be made and ac- as deposits, demand or time loans, counted for. It also includes advances notes receivable, interest, dividends, to fast freight lines and to demurrage miscellaneous bills and similar items. and other bureaus. NOTE: Receivables from affiliated companies, representing net debit balances for NOTE: Advances to jointly owned or used items such as operating revenues, charges terminal companies and other companies for for equipment interchanged, car repairs and permanent working funds or capital purposes claims, shall not be included in this account shall be included in accounts 721, ‘‘Invest- but in account 705, ‘‘Accounts receivable; ments and advances; Affiliated companies,’’ Interline and other balances.’’ or 722, ‘‘Other investments and advances,’’ as appropriate. 709 Accrued accounts receivable. 711 Prepayments. This account shall include estimates of all unaudited current items receiv- This account shall include the bal- able by the carrier to the date of the ances in the accounts representing balance sheet, including those which short-term prepaid rents chargeable to are creditable to revenue, expense, or the appropriate rent accounts as the income accounts. Among the items term is consumed for which the rents which shall be included in this account are paid; also short-term interest, and are: insurance premiums, taxes and li- censes, and similar items paid in ad- Amounts receivable from others for unre- vance of their accrual, which are to be ported interline traffic. apportioned and charged, as they ac- Amounts receivable from others for use of facilities, including equipment, for which crue, to the appropriate accounts. bills have not been rendered. Amounts receivable from others for services 712 Material and supplies. for which bills have not been rendered. (a) This account shall include the Rents receivable for which bills have not balances representing the cost of all been rendered. unapplied material, such as road and shop material, articles in process of 709.5 Allowance for uncollectible ac- manufacture by the accounting com- counts. pany, fuel, stationery, and dining car This account shall be credited with and other supplies. In determining the amounts provided for receivables which cost of material and supplies suitable

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allowance shall be made for any pur- to which the classes of material are or- chase discounts allowed. The cost shall dinarily chargeable. Other differences include all specifically assignable shall be equitably apportioned among transportation charges incurred in ob- the primary accounts to which mate- taining the delivery of such materials rial has been charged since the last in- and supplies upon the premises of the ventory. (Also see instruction 5–1(b).) carrier including loading and unload- NOTE: Balances representing the cost of ing, and a suitable proportion of pur- unapplied construction material and supplies chasing and store expenses. The cost located at the point of use, which have been shall also include sales and excise purchased for projected new roads and extensions, or for new railroad equipment, shall be taxes on material purchases; however, included in account 90, ‘‘Construction in sales and excise taxes may be charged progress.’’ to account 65–60–00, ‘‘Other taxes; Gen- [42 FR 35017, July 7, 1977, as amended at 67 eral and administrative,’’ provided this FR 57533, Sept. 11, 2002] procedure will not adversely affect the accounts and is consistently followed. 713 Other current assets. Taxes on gasoline, other motor fuel, This account shall include amounts and motor oil are also includible in for other current assets which are not this account. includible in the foregoing current (b) Materials recovered for reuse in asset accounts. connection with construction, maintenance, or the retirement of property 714 Deferred income tax debits. shall be charged to this account at This account shall include the cur- cost, or average cost, estimated if not rent portion of deferred income tax known, less accumulated depreciation, debits and credits determined in ac- if any, plus the cost to restore the ma- cordance with Instruction 1–10, when terials to a serviceable condition, or the balance is a net debit. A net credit current market value, whichever is balance shall be included in account lower. (See definition 31, Salvage value.) 762, ‘‘Deferred income tax credits’’. (c) Scrap and other nonusable materials, including obsolete parts, shall be (49 U.S.C. 10321, 11145; 5 U.S.C. 553) included in account 713, ‘‘Other current [47 FR 12350, Mar. 23, 1982] assets,’’ at the estimated salvage value when the sale of the materials is immi- SPECIAL FUNDS nent and there is a relatively firm market price. Obsolete parts not subject to 715 Sinking funds. imminent sale shall be included in ac- (a) This account shall include the count 741, ‘‘Other assets,’’ at their net amount of cash, the ledger value of live realizable value. securities of other companies, and (d) Material and supplies shall be other assets which are held by trustees credited to this account and charged to of sinking and other funds for the pur- the appropriate operating expense or pose of redeeming outstanding obliga- other account on the basis of recorded tions, including such assets held in the cost, average cost, or other recognized hands of the accounting company’s pricing system, provided that such sys- treasurer when the assets are seg- tem is consistently applied and is based regated in a distinct fund. on the cost of such material and sup- (b) This account shall include plies. amounts deposited with trustees on ac- (e) An inventory of material and sup- count of mortgaged property sold, plies shall be taken during each cal- where the proceeds are held for the re- endar year and the necessary adjust- demption of securities; and also the par ments to bring this account into har- value (or the amount recorded for no mony with the actual inventory bal- par stock) of live securities issued or ances shall be made in the accounts of assumed by the accounting company the year in which the inventories are and held in such funds. taken. In effecting this adjustment, de- (c) A separate subaccount shall be termined differences in accounting for kept for each fund. The title of each important classes of material shall be subaccount shall designate the obliga- equitably assigned among the accounts tion redeemable from the fund.

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NOTE: In stating the balance sheet in the for specific purposes not provided for annual reports to the Board the total elsewhere; also the par value (or the amount of the funds and the par value (or amount recorded for no par stock) of the amount recorded for no par stock) of securities issued or assumed by the accounting securities issued or assumed by the ac- company and held in the funds shall be counting company and held in such shown in the short columns, and the net funds. A separate subaccount shall be amount of the funds (total amount less secu- kept for each fund. rities issued or assumed) shall be shown in NOTE A: Sinking funds and capital funds the long column. are provided for in accounts 715, ‘‘Sinking funds,’’ and 716, ‘‘Capital funds,’’ respec- 716 Capital funds. tively. (a) This account shall include cash NOTE B: In stating the balance sheet in the and the ledger value of other assets annual reports to the Board, the total held by trustees or by the accounting amount of the funds and the par value (or company’s treasurer when segregated the amount recorded for no par stock) of securities issued or assumed by the accounting in distinct funds that have been (1) re- company and held in the funds shall be alized from the sale of equipment obli- shown in the short columns, and the net gations or other long-term obligations amount of the funds (total amount less secu- and not yet applied toward the specific rities issued or assumed) shall be shown in purposes for which the obligations were the long column. incurred, and (2) set aside in accord- NOTE C: This account shall not include ance with governmental, mortgage, or funds held by the accounting company solely contractual requirements in connec- as trustee and in which it has no beneficial interest. tion with reorganizations or otherwise. NOTE D: This account shall include com- This account shall also include funds pensating balances (see definition 10) under deposited with trustees to be held until an agreement which legally restricts the use mortgaged property sold is replaced. of such funds and which constitute support (b) An appropriate record shall be for long-term borrowing arrangements. maintained for securities issued or as- [42 FR 35017, July 7, 1977, as amended at 67 sumed by the accounting company and FR 57533, Sept. 11, 2002] held in the funds, identifying those that are nominally issued or nominally INVESTMENTS outstanding. NOTE: Funds specifically set aside for sink- 721 Investments and advances; affili- ing fund purposes shall be included in ac- ated companies. count 715, ‘‘Sinking funds.’’ If one purpose of (a) This account shall include the a capital fund is to provide contributions to ledger value of the accounting com- a sinking fund under specified conditions, the entire amount of the fund shall be in- pany’s investment in securities issued cluded in this account until the contribu- or assumed by affiliated companies tions to the sinking fund are made, at which other than securities held in special de- time the amounts thereof shall be trans- posits or special funds; and also invest- ferred to account 715. ment advances made to affiliated com- NOTE: The ledger value of assets of the panies not subject to current settle- character indicated in paragraph (a)(2) of ment; notes receivable from affiliated this section, shall be transferred to the appropriate current asset account when the as- companies which mature later than 1 sets are definitely assigned in advance of ex- year from date of the balance sheet; penditure to the payment of interest or and similar noncurrent items of affili- other current liabilities payable within one ated companies. year. (b) This account shall be maintained in such manner as to show each of the 717 Other funds. following classes of investment in each This account shall include the affiliated company: amount of cash and the ledger value of (1) Stocks. securities of other companies and other (2) Bonds. assets which are in the hands of trust- (3) Other secured obligations. ees or managers of insurance, employ- (4) Unsecured notes. ees’ pension, savings, relief, hospital, (5) Investment advances. and other funds which have been raised (c) A complete record of securities and specifically set aside or invested pledged shall be maintained to show

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separately the ledger value of securi- shall not be included in this account. A ties pledged and unpledged in the an- memorandum record shall be kept. nual report to the Board. NOTE D: The value of securities pledged for purposes other than that of security for NOTE A: Accounts with affiliated compa- funded debt or short-term loans shall be in- nies which are subject to current settlement, cluded in accounts 715, ‘‘Sinking funds,’’ 716, if their collection is reasonably assured, ‘‘Capital funds,’’ or 717, ‘‘Other funds,’’ as ap- shall be classed as current assets, and if set- propriate. tlement is deferred beyond one year such [42 FR 35017, July 7, 1977, as amended at 67 items shall be transferred to this account. FR 57533, Sept. 11, 2002] NOTE B: The term affiliated companies (also see definition 5(a)) includes: 721.5 Adjustments; investments and 1. Controlled companies, including companies solely controlled by the accounting advances—affiliated companies. company, and also companies jointly con- (a) This account shall be credited trolled by the accounting company and oth- with amounts charged to account 551, ers under a joint arrangement. ‘‘Miscellaneous income charges,’’ to 2. Controlling companies, including both provide for impairment in the value of companies solely controlling the accounting investment securities and other assets company, and companies which jointly con- included in account 721, ‘‘Investments trol the accounting company under a joint arrangement. and advances; affiliated companies.’’ 3. Companies controlled by controlled com- (b) If provision is made for antici- panies. pated losses in specific assets, when the 4. Companies controlled by controlling assets are written down or written off, companies. or are sold or otherwise disposed of at By control (also see definition 5(a)) is a loss, the reduction in the book value meant the ability to determine the ac- or the losses sustained shall be charged tion of a corporation. For the purposes to this account to the extent of the of this account, the following are to be credit balance in the account applica- considered forms of control: ble to the particular items involved, and the remainder, if any, shall be (a) Right through title to securities charged to account 551, ‘‘Miscellaneous issued or assumed to exercise the income charges.’’ Where a general pro- major part of the voting power in the vision for losses in unspecified asset controlled corporation. values is maintained, all such losses re- (b) Right through agreement or sulting from write-downs, write-offs, source other than title to securities, to etc., shall be charged to this account to name the majority of the board of di- the extent of the total credit balance rectors, managers, or trustees of the in the account, and the remainder, if controlled corporation. any, shall be charged to account 551, (c) Right to foreclose a first lien upon ‘‘Miscellaneous income charges.’’ all or a major part in value of the tangible property of the controlled cor- 722 Other investments and advances. poration. (a) This account shall include the (d) Right to secure control because of ledger value of the accounting com- advances made for construction of the pany’s investment in securities issued operating property of the controlled or assumed by nonaffliated companies corporation. other than securities held in special de- (e) Right to control only in a specific posits or special funds; and also invest- respect the action of the controlled ment advances made to nonaffiliated corporation. companies not subject to current set- A leasehold interest in the property of tlement; notes receivable from non- a corporation is not considered a form affiliated companies which mature of control over the lessor corporation. later than 1 year from date of the bal- Sole control is that which rests in one ance sheet; and similar noncurrent corporation. items of nonaffiliated companies. Joint control is that which rests in (b) This account shall be maintained two or more corporations and which is in such manner as to show each of the held under a joint arrangement. following classes of investment in each NOTE C: The value of securities borrowed nonaffiliated company: by the accounting company and pledged (1) Stocks.

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(2) Bonds. 724 Allowance for net unrealized loss (3) Other secured obligations. on noncurrent marketable equity (4) Unsecured notes. securities—Cr. (5) Investment advances. This account shall reflect the (c) A complete record of securities amount by which aggregate cost ex- pledged shall be maintained to show ceeds market value for the noncurrent separately the ledger value of securities pledged and unpledged in the an- marketable equity securities found in nual report to the Board. accounts 721 and 722. This account shall be debited or credited so that the NOTE A: Accounts with nonaffiliated com- balance at the balance sheet date shall panies which are subject to current settlement, if their collection is reasonably as- reflect such difference. (Refer to insured, shall be classed as current assets, and struction 5–2.) if settlement is deferred beyond one year This account shall not include amounts such items shall be transferred to account by which aggregate cost exceeds mar- 741, ‘‘Other assets.’’ NOTE B: The term nonaffiliated companies ket value if such differences are judged includes all companies other than those de- to be other than temporary. (Such dif- fined as affiliated in note B of account 721, ferences should be charged to account ‘‘Investments and advances: Affiliated com- 723.) panies.’’ NOTE C: The value of securities borrowed TANGIBLE PROPERTY by the accounting company and pledged shall not be included in this account. A 731 Road and equipment property. memorandum record shall be kept. NOTE D: The value of securities pledged for This account shall include the ac- purposes other than that of security for counting company’s investment in road funded debt or short-term loans shall be in- and equipment (including that held cluded in accounts 715, ‘‘Sinking funds,’’ 716, under contract for purchase), used or ‘‘Capital funds,’’ or 717, ‘‘Other funds,’’ as appropriate. held for use as transportation property in existence at the date of the balance 723 Adjustments; other investments sheet. When property is retired from and advances. service, this account shall be credited (a) This account shall be credited with the ledger value of the property with amounts charged to account 551, retired. ‘‘Miscellaneous income charges,’’ to NOTE A: This account shall not include any provide for impairment in the value of items representing titles to securities. investment securities and other assets NOTE B: When equipment or other property included in account 722, ‘‘Other invest- is acquired under an agreement which pro- ments and advances.’’ vides that the cost shall be paid in install- (b) If provision is made for antici- ments, the cost (its money value at time of pated losses in specific assets, when the purchase) shall be charged to the appropriate road and equipment accounts at the time the assets are written down or written off, equipment is delivered to the carrier, and in- or are sold or otherwise disposed of at cluded in this account in the same manner as a loss, the reduction in the book value the cost of equipment purchased outright. or the losses sustained shall be charged When the par value of notes or other securi- to this account to the extent of the ties issued in payment, or in part payment, credit balance in the account applica- for such equipment is more (or less) than the ble to the particular items involved, actual cash value of the equipment at the and the remainder, if any, shall be time of the purchase, or of the proportion to charged to account 551. ‘‘Miscellaneous which the securities are applicable, the dif- income charges.’’ Where a general pro- ference between the par value of the securi- vision for losses in unspecified asset ties and the actual cash value of the equip- values is maintained, all such losses re- ment, or of the proportion paid for by the securities, shall be charged (or credited) to the sulting from write-down, write-offs, proper discount and premium accounts. etc., shall be charged to this account to NOTE C: Held for use, as referred to above, the extent of the total credit balance implies the ability of the carrier to substan- in the account, and the remainder, if tiate within a reasonable period of time, by any shall be charged to account 551, plan or policy, the probable future use which ‘‘Miscellaneous income charges.’’ is to be made of the property.

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732 Improvements on leased property. to leased property applicable to defense (a) This account shall include the projects, the cost of which is included cost of improvements made by the les- in account 732, ‘‘Improvements on see to property which is held under leased property.’’ This account shall be lease from others or through control of charged with the amount of the credit the company owning the property, balance applicable to specific property where such improvements are used by at the time the property is retired. The the lessee in transportation service, accounting company shall maintain and the lessee is not to be reimbursed separate subaccounts for amortization by the lessor for such improvements. of (1) road property and (2) equipment. (See instruction 2–18.) (b) The carrier’s records shall be kept 735 Accumulated depreciation; road in such manner as to show the debits and equipment property. and credits to this account in accord- (a) This account shall be credited ance with the provisions for road and with amounts concurrently charged to equipment. operating expenses or other authorized NOTE A: This account shall not include any accounts to cover the loss in service itmes representing titles to securities. value of depreciable road and equip- NOTE B: When the lessor company includes ment property. It shall also include ad- in account 731, ‘‘Road and equipment property,’’ the cost of improvements made by the justments which the Board may au- lessee to property, leased by it from the les- thorize the accounting company to sor and settlement is not made at the time make such as adjustments for past ac- for the cost thereof, the lessee, pending set- cruals of depreciation, and provision tlement with the lessor, shall include the for material abandonment or other cost thereof in account 721, ‘‘Investments losses applicable to nondepreciable and advances; Affiliated companies,’’ or 722, property. ‘‘Other investments and advances,’’ as appropriate. (b) The service value of each unit of depreciable property retired (and also 733 Accumulated depreciation; im- of each minor item, less than a unit, provements on leased property. retired and not replaced) shall be (a) This account shall be credited charged to this account. This account with amounts concurrently charged to shall also be charged for amounts for operating expenses or other authorized losses applicable to nondepreciable accounts for depreciation accrued on property retired for which provision improvements to leased property, the was previously made by approval of the cost of which is included in account Board, and any resultant adjustment of 732, ‘‘Improvements on leased prop- such provision shall be referred to the erty.’’ Board for consideration and decision. (b) The service value of each unit of (c) Comprehensive instructions per- property retired (and also of each taining to depreciation accounts, rates minor item, less than a unit, retired of depreciation, and records to be and not replaced) for which this accu- maintained, are contained in instruc- mulated depreciation account has been tion 4. established shall be charged to this account. 736 Accumulated amortization; road (c) Instructions for depreciation ac- and equipment property—defense counts, rates of depreciation, and project. records to be maintained, as contained This account shall include the in instruction 4 for owned property, amount of accumulated past provisions shall also apply to improvements on for amortization of road and equipment leased property. defense projects, the cost of which is included in account 731, ‘‘Road and 734 Accumulated amortization; im- equipment property.’’ This account provements on leased property—de- shall be charged with the amount of fense projects. the credit balance applicable to spe- This account shall include the cific property at the time the property amounts of accumulated past provi- is retired. The accounting company sions for amortization of improvements shall maintain separate subaccounts

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for amortization of (1) road property essary and proper in organizing the en- and (2) equipment. terprise. NOTE: Cost of soliciting for loans or for the 737 Property used in other than car- sale of bonds or other evidences of indebted- rier operations. ness shall be charged to balance sheet account 743, ‘‘Other deferred debits.’’ (See in- This account shall include the ac- struction 5–3.) counting company’s investment in property other than property assign- OTHER ASSETS AND DEFERRED DEBITS able to accounts 731, ‘‘Road and equipment property,’’ and 732, ‘‘Improve- 741 Other assets. ments on leased property,’’ such as ho- This account shall include the esti- tels, restaurants, powerplants, which mated value of salvage recoverable are not operated by the accounting from property retired when the recov- company or another carrier in connec- ery of the salvage is deferred for any tion with its transportation service. reason. (See instruction 2–5 and 2–7.) ITEMS OF INVESTMENT This account shall also include the estimated realizable amount for other as- Coal and other mines. sets of doubtful value, collection of Commercial power plants. which within one year is not assured; Hotels and restaurants. Lands and buildings not used in transpor- also other deferred assets and miscella- tation operations. neous assets not otherwise provided for Lands and other property acquired and held in general balance sheet accounts. (See in anticipation of future use. instruction 5–1.) Mineral and timber lands. Rails and other track material leased to oth- 743 Other deferred debits. ers. (a) This account shall include the Saw mills and other manufacturing plants amount of debit balances in suspense not operated in connection with transportation service. accounts that cannot be cleared and disposed of until additional informa- 738 Accumulated depreciation; prop- tion is received, such as frieght claims erty used in other than carrier op- paid when found to be correct, but in erations. advance of investigation with other carriers; unextinguished discount on This account shall be credited with short-term notes; unadjusted debit amounts charged to income or other items not otherwise provided for and authorized accounts for depreciation similar items the proper disposition of accrued on property, the cost of which which is uncertain is included in account 737, ‘‘Property (b) This account shall also include used in other than carrier operations.’’ the aggregate amount of the expenses When such property is destroyed, sold, incurred in connection with the or otherwise retired from service, this issuance of each class of the carrier’s account shall be charged with the outstanding long-term or equipment amount of the credit balance applica- obligations, such as fees for listing ble to the property retired. long-term obligations on stock ex- INTANGIBLE PROPERTY changes, legal and other fees, cost of tax stamps and similar items. (See ac- 739 Organization expenses. count 14.) Separate subdivisions shall be maintained for each issue of such This account shall include all fees obligations. (See instruction 5–3.) paid to governments for the privilege of incorporation, and office and other [42 FR 35017, July 7, 1977, as amended at 67 expenditures incident to organizing the FR 57533, Sept. 11, 2002] corporation and putting it in readiness to do business; cost of preparing and 744 Accumulated deferred income tax distributing prospectuses; special coun- debits. sel fees; cost of preparing and issuing This account shall include the certificates of stock; cost of procuring amount of deferred noncurrent income the necessary certificates from State tax debits and credits determined in authorities; and other like costs nec- accordance with Instruction 1–10 when

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the balance is a net debit. A net credit equipment interchanged on a per diem balance shall be included in account or mileage basis, and charges for car 786, ‘‘Accumulated deferred income tax repairs, loss and damage freight credits’’. claims, and overcharge claims. (49 U.S.C. 10321, 11145; 5 U.S.C. 553) NOTE: The amount to be entered in this account is not the net balance between this ac- [47 FR 12350, Mar. 23, 1982] count and account 705, ‘‘Accounts receivable; Interline and other balances.’’ Net debit bal- Liabilities and Shareholders’ Equity ances receivable from other companies shall be included in account 705.

CURRENT LIABILITIES 753 Audited accounts and wages pay- 751 Loans and notes payable. able. (a) This account shall include the This account shall include the balances representing obligations out- amount of audited vouchers or ac- standing in the form of loans and notes counts and audited payrolls unpaid on payable or other similar evidence (ex- the date of the balance sheet. It shall cept interest coupons) of indebtedness include balances representing un- payable on demand or within a time claimed wages and outstanding pay and not exceeding one year from date of time or discharge checks issued in pay- issue. ment of wages and all other unpaid (b) This account shall be kept in such vouchered items. form so as to show separately the NOTE: The amount of checks and drafts, amounts of notes payable within one which have been transmitted to payees and year from date of issue that are se- which remain unpaid at the close of the accounting period, shall be credited to account cured by collateral. 701, ‘‘Cash.’’ NOTE A: Loans and notes payable to affiliated companies which are subject to current 754 Accounts payable; other. settlement shall be included in account 757, ‘‘Payables to affiliated companies,’’ and non- This account shall include out- current obligations in account 769, ‘‘Ac- standing drafts drawn by station counts payable; Affiliated companies.’’ agents, conductors’ refund and extra- NOTE B: This account shall not include ob- fare checks not presented for redemp- ligations due within one year which are in- tion, taxes collected from employees tended to be refinanced on a long-term basis. and others for the account of taxing Long-term refinancing of short-term obliga- agencies, and other items of the nature tions means: (1) Replacement with long-term of demand liabilities not covered by ac- obligations or equity securities, or (2) renewal, extension, or replacement with short- counts 751, 752, 753, 755, 756, and 757. term obligations for an uninterrupted period NOTE A: The amount to be reported under extending beyond one year from the balance this account is not the net balance between sheet date. this account and account 707, ‘‘Accounts re- The intention to refinance on a long-term ceivable; Other.’’ basis shall be supported by the ability to re- NOTE B: The amount of checks and drafts, finance. Evidence of this ability includes ei- which have been transmitted to payees and ther: (1) The actual issuance of an obliga- which remain unpaid at the close of the action, after the balance sheet date but before counting period, shall be credited to account the balance sheet is issued, or (2) before the 701, ‘‘Cash.’’ When the amount of such checks balance sheet is issued, the existence of a fi- and drafts cannot be determined with abso- nancing agreement which is long-term and lute accuracy an estimate of the amount based on terms readily determinable with no shall be used. existing violations of its provisions, and with NOTE C: Deposits and other items of affili- a lender which is financially capable of hon- ated companies subject to current settle- oring the agreement. ment shall be included in account 757, ‘‘Payables to affiliated companies.’’ 752 Accounts payable; interline and other balances. 755 Interest payable. This account shall include the net This account shall include the credit balances payable to other com- amount of matured and unpaid interest panies representing items such as on funded debt, and other obligations interline freight, passenger, switching of the accounting company for which and baggage revenues, charges for provision has been made for current

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settlement. This account shall also in- persons, loss and damage, and similar clude the amount of interest subject to items. current settlement accrued to the date Amounts payable (estimated if necessary) within one year pursuant to agreements of the balance sheet, but payable after with labor organizations or otherwise for that date, on obligations of the ac- employees vacations now earned. counting company. NOTE: Interest payable on debt to affiliated 760 Federal income taxes accrued. companies, if subject to current settlement, This account shall be credited with shall be included in account 757, ‘‘Payables to affiliated companies.’’ Noncurrent inter- the amount accrued for Federal income est shall be included in account 769, ‘‘Ac- taxes which has been concurrently counts payable; Affiliated companies.’’ Inter- charged to the appropriate income or est payable to others which is not paid when other authorized accounts. Credits to it matures shall be included in account 781. this account that are based upon esti- ‘‘Interest in default,’’ if not subject to cur- mates shall be adjusted during the year rent settlement. Where interest is in default, so that this account may show, as subsequent accruals shall be credited di- nearly as practicable the approximate rectly to account 781. amount of the carrier’s unpaid liability for such taxes. Payments of taxes for 756 Dividends payable. which accruals have been made shall be This account shall include the debited to this account. amount of dividends payable on capital stock but unpaid, at the date of the 761 State and other income taxes ac- balance sheet. crued. NOTE: Dividends payable to affiliated com- This account shall be credited with panies shall be included in account 757, the amounts accrued for state and ‘‘Payables to affiliated companies.’’ other income taxes which have been 757 Payables to affiliated companies. concurrently charged to the appropriate income or other authorized ac- This account shall include amounts counts. Credits to this account that are payable to affiliated companies which based upon estimates shall be adjusted are subject to current settlement such during the year so that this account as deposits, demand or time loans, may show, as nearly as practicable, the notes payable, interest, dividends, mis- approximate amount of the carrier’s cellaneous bills, and similar items. unpaid liability for such taxes. Pay- NOTE: Payables to affiliated companies, ments of taxes for which accruals have representing net credit balances for items been made shall be debited to this ac- such as revenues, charges for equipment count. interchanged, car repairs and claims, shall not be included in this account but in ac- 761.5 Other taxes accrued. count 752, ‘‘Accounts payable; Interline and other balances.’’ (a) This account shall be credited with the accruals of all taxes, other 759 Accrued accounts payable. than income taxes, which have been This account shall include estimates concurrently charged to the appro- of unaudited items payable by the car- priate income or other accounts for rier to the date of the balance sheet, taxes. Such accruals may be based including those which are chargeable upon estimates, provided such esti- to revenue, expense, or income ac- mates shall be adjusted during the year counts. Among the items which should so that this account may show, as be included in this account are: nearly as practicable, the approximate amount of the carrier’s unpaid liability Rents payable. for such taxes. Payments of taxes for Amounts payable to others for unreported which accruals have been made shall be interline traffic. debited to this account. Amounts payable to others for use of facili- (b) The records supporting the en- ties, including equipment, for which bills have not been rendered. tries in this account shall be kept to Amounts payable to others for services for show separately by classes of taxes the which bills have not been rendered. amount of the tax accruals for the cur- Estimated amounts payable within one year rent year and adjustments of accruals covering liability for claims for injuries to for prior years.

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NOTE: Amounts for prepayments of taxes the accounting company or the pay- shall be included in account 711, ‘‘Prepay- ment was assumed by the accounting ments.’’ company after being issued as the debt of other companies. (See account 764, 762 Deferred income tax credits. ‘‘Equipment obligations and other This account shall include the cur- long-term debt due within one year.’’) rent portion of deferred income tax (b) The amounts included in this ac- charges and credits determined in account shall be divided to show the par cordance with Instruction 1–10 when value of (1) certificates or other evi- the balance is a net credit. A net debit dences of funded debt (pledged and balance shall be included in account unpledged) held in the company’s 714, ‘‘Deferred income tax debits’’. treasury, by its agents or trustees, or (49 U.S.C. 10321, 11145; 5 U.S.C. 553) otherwise subject to its control, includ- [47 FR 12350, Mar. 23, 1982] ing both those reacquired after actual issue and those nominally but never 763 Other current liabilities. actually issued; and (2) certificates or other evidences of funded debt issued There shall be included in this account the principal amount of and actually outstanding, being those unpresented bonds drawn for redemp- not held by the company, its agents or tion through the operation of sinking trustees, or subject to its control. and redemption fund agreements, also (c) The amounts included herein shall the principal amount of unpresented be further divided so as to show the fund debt obligations, and receivers’ amount of each class of funded debt, as and trustees’ securities which have ma- follows: tured (for which provision has been (1) Mortgage bonds. Bonds secured by made for current settlement), and lien on physical property and not in- other current liabilities not includible cludible in the other subdivisions of in the foregoing current liability ac- this account. counts. (2) Collateral trust bonds. Bonds and notes secured by a lien on securities or 764 Equipment obligations and other other negotiable paper; and stock trust long-term debt due within one year. certificates that are similar in char- This account shall include the total acter to collateral trust bonds. amount of bonds, equipment obliga- (3) Income bonds. Bonds which are a tions, and other long-term debt, includ- lien on a carrier’s revenue alone, or ing obligations maturing serially or bonds which, while being a lien on its payable in installments which are due property and franchises, can claim pay- and payable within one year, and for ment of interest only in case interest is which arrangements for long-term refi- earned. nancing have not been made (See note (4) Miscellaneous obligations. All fund- B to account 751, ‘‘Loans and notes ed obligations not provided for by the payable’’) or for which no sinking funds other subdivisions of this account, also have been provided. This account shall notes, unsecured certificates of indebt- be subdivided according to the dif- edness, debenture bond, plain bonds, ferent classes of debt. real estate mortgages executed or assumed and other similar obligations LONG-TERM DEBT DUE AFTER ONE YEAR maturing more than one year from date of issue, but excluding liabilities 765 Funded debt unmatured. for assessments for public improve- (a) This account shall include the ments and those evidenced by condi- total par value of unmatured debt tional or deferred equipment purchase (other than equipment obligations), contracts for which provision is made maturing more than one year from the in accounts 782, ‘‘Other liabilities,’’ and close of the accounting period, includ- 766, ‘‘Equipment obligations,’’ respec- ing obligations due within one year tively. which are expected to be refinanced on (5) Receipts outstanding for funded a long-term basis (see note B to ac- debt. Receipts for payments on account count 751, ‘‘Loans and notes payable’’), of funded debt. When certificates are whether the securities were issued by issued for such payments, the par value

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shall be included in the account cov- shall be shown the amount actually out- ering the class of funded debt for which standing. the certificates are issued. [42 FR 35017, July 7, 1977, as amended at 67 (d) Each of the above classes shall FR 57533, Sept. 11, 2002] also be divided into subclasses according to differences in mortgage or other 766 Equipment obligations. lien or security therefor, rate of inter- (a) This account shall include the par est, interest dates, or date of maturity. value of equipment securities and the Parts of any issue agreeing in other principal amount of contractual obli- characteristics but maturing serially gations for the purchase of equipment, may be treated as of the same subclass. excluding principal or obligations ma- (e) Records shall be maintained in turing serially or payable in install- such manner as to show (1) securities ments within one year from the close the issuance or assumption of which of the accounting period, and including has been authorized by the Board under obligations due within one year which provisions of the Interstate Commerce are expected to be refinanced on a Act, and similar securities issued or as- long-term basis (see account 764, sumed prior to the effective date of ‘‘Equipment obligations and other such provisions of the Act, and (2) long-term debt due within one year’’); other obligations of a kind which may for explanation of long-term refi- legally be issued or assumed without nancing, see note B to account 751, such authorization. ‘‘Loans and notes payable.’’ NOTE A: Securities (other than equipment (b) The amounts included herein obligations) maturing one year or less from shall be divided as follows: date of issue shall be included in accounts (1) Principal amount of equipment 757, ‘‘Payables to affiliated companies,’’ 769, securities including those maturing se- ‘‘Accounts payable; Affiliated companies,’’ rially, issued or assumed by the ac- or 751, ‘‘Loans and notes payable,’’ as appro- counting company or by receivers and priate, except that where an issue of securities maturing serially over a period of years trustees, which have been authorized contains short-term obligations such obliga- by the Board under provisions of the tions may be included as funded debt. Ma- Interstate Commerce Act and similar ture funded debt shall be included in account securities issued or assumed prior to 763, ‘‘Other current liabilities,’’ if provision the effective date of such provisions of has been made for current settlement. If no the act. provision has been made for current settle- (2) Principal sums of obligations for ment, matured funded debt shall be included equipment purchased under conditional in account 768, ‘‘Debt in default,’’ except that when the collection of matured funded or deferred payment contracts, which debt of affiliated companies is not enforced may be legally entered into or assumed by controlling companies, the principal by the accounting company or by re- amount (to the extent held by a controlling ceivers and trustees, without author- company) shall be included in account 769, ization by the Board. ‘‘Accounts payable; Affiliated companies.’’ NOTE B: See definitions 3, actually issued; 766.5 Capitalized lease obligations. 4, actually outstanding; 25, nominally issued; and 26, nominally outstanding. (a) Long-term leases which are clear- NOTE C: Nonnegotiable notes having a ma- ly in substance installment purchases turity of more than one year after date of shall be capitalized. The liability under issue, held by affiliated companies, shall be such leases which have been capitalized included in account 769, ‘‘Accounts payable; in fixed asset accounts shall be re- Affiliated companies.’’ corded in this account. (See instruction NOTE D: Securities nominally issued or re- 2–20.) acquired and held in the company’s treasury, (b) This account shall be kept so as except securities held by trustees in sinking to show the liability under each lease or other funds, shall be included in a subdivision of this account. In the general balance obligation. sheet statement the total unmatured funded NOTE A: The portion of the liability for debt included in this account shall be shown long-term leases which is payable within 1 in the first short column. The amount nomi- year of the close of the accounting period is nally but not actually issued and the amount includible in account 764, Equipment obliga- nominally outstanding shall be shown in the tions and other long-term debt due within second short column, and in the long column one year.

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NOTE B: Leases which merely state the terest accrued on notes, matured fund- right to use property and a related obliga- ed debt of affiliated companies and tion to pay specific rents over a definite fu- open accounts included in this account, ture period shall not be considered to be as- when such interest is not subject to sets and liabilities. current settlements. The amounts in- (49 U.S.C. 12, 20, 304, 913 and 1012) cluded herein shall be divided as fol- [42 FR 56611, Oct. 27, 1977] lows: (a) Notes, including not only non- 767 Receivers’ and trustees’ securities. negotiable notes that run longer than a When receivers or trustees acting term of one year, but also such notes under the orders of a court are in pos- payable on demand or within one year session of the property of the company, from the date of issue when it is mutu- and under the order of such court issue ally agreed that the notes shall not be or assume evidences of indebtedness enforced as current assets by the hold- (other than equipment securities or ob- er. ligations) the par value of such evi- (b) Par value of matured funded debt dences shall be credited to this ac- of affiliated companies held by control- count. ling companies where there is no agree- NOTE: The par value of equipment securi- ment for an extension of time and col- ties or the principal amount of obligations lection is not enforced. incurred for the purchase of equipment under (c) Open accounts not subject to cur- conditional or deferred payment contracts rent settlement. shall be included in account 766, ‘‘Equipment (d) Interest accrued on amounts in- obligations.’’ cluded in this account when not sub- 768 Debt in default. ject to current settlement. This account shall include amounts NOTE A: Accounts with affiliated compa- transferred from other accounts rep- nies which are subject to current settlement shall be classed as current assets or current resenting matured funded securities or liabilities, as appropriate. obligations, receivers’ and trustees’ se- NOTE B: No item shall be included in this curities, equipment obligations and account which is not known to be the prop- short-term notes, when maturity dates erty of an affiliated company. of such obligations have not been ex- NOTE C: The term affiliated companies intended cludes: 1. Controlled companies, including compa- NOTE A: The principle amount of matured nies solely controlled by the accounting funded debt of affiliated companies the col- company, and also companies jointly con- lection of which is not enforced by the controlled by the accounting company and oth- trolling company shall (to the extent of the ers under a joint arrangement. (See defini- principal amount held by the controlling tion 4.) company) be included in account 769, ‘‘Ac- counts payable; Affiliated companies.’’ 2. Controlling companies, including both companies solely controlling the accounting NOTE B: The principal amount unpresented funded debt obligations which have matured, company, and companies which jointly con- and for which provision has been made for trol the accounting company under a joint payment shall be included in account 763, arrangement. ‘‘Other current liabilities.’’ 3. Companies controlled by controlled companies. 769 Accounts payable; affiliated com- 4. Companies controlled by controlling panies. companies. By control (See definition 8) is meant the This account shall include the par ability to determine the action of a corpora- value of nonnegotiable notes issued to tion. For the purposes of this account, the affiliated companies; also matured following are to be considered forms of con- funded debt of affiliated companies trol: held by controlling companies where (a) Right through title to securities issued there is no agreement for an extension or assumed to exercise the major part of the voting power in the controlled corporation. as to time of payment and collection of (b) Right through agreement of some char- the principal is not enforced; credit acter or through some source other than balances in open accounts with such title to securities, to name the majority of companies other than credit balances the board of directors, managers, or trustees classable as current liablilities, and in- of the controlled corporation.

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(c) Right to foreclose a first lien upon all sions, accident and death benefits, sav- or a major part in value of the tangible prop- ings, relief, hospital, or other provident erty of the controlled corporation. purposes. (d) Right to secure control in consequence (b) The carrier may use the ‘‘full ac- of advances made for construction of the operating property of the controlled corpora- crual basis’’ to account for pension tion. costs upon prior approval of the Board. (e) Right to control only in a specific re- Full accrual basis as used herein means spect the action of the controlled corpora- recording in the accounts now and tion. hereafter costs of employees pensions A leasehold interest in the property of a accrued, including credits for past serv- corporation is not to be classed as a form of ices, upon the basis of actuarial com- control over the lessor corporation. Sole control is that which rests in one cor- putations, even though the sum has not poration. been funded by payment to the trust- Joint control is that which rests in two or ees. Applications for such accounting more corporations and which is held under a shall show the method of computation, joint arrangement. together with the carrier’s proposal for recording in the accounts the related 770.1 Unamortized debt discount. income tax credits to be realized in This account shall include the total subsequent years. of the net debit balances representing (c) This account shall be charged the excess of the discount over the when payments are made to retired premimium in connection with the employees, or disbursements are made issuance of each class of the carrier’s for the purposes for which liability was outstanding long-term or equipment provided. obligations. Separate subdivisions (d) Separate subaccounts shall be shall be maintained for each issue of maintained to show the amount pro- such obligations. (See instruction 5–3.) vided for each liability and the nature NOTE A: Issue costs related to long-term of and amounts of debits and credits to debt (debt expense) shall be included in ac- the subaccounts. count 743, ‘‘Other deferred debits.’’ (See instruction 5–3.) 772 Accrued liability; leased property. NOTE B: When long-term obligations are (a) This account shall be credited refinanced the balance of debt discount and expense pertaining to the old obligations with amounts concurrently charged to shall be transferred to account 551, ‘‘Mis- operating expenses or other accounts cellaneous income charges.’’ to cover the accrued liability on leased road and equipment when settlement 770.2 Unamortized premium on debt. between the accounting carrier and the This account shall include the total lessor is not made currently. The of all credit balances representing the amounts recorded shall include unset- excess of the premium over the dis- tled rent, based on depreciation or count and expenses in connection with other factors, and liability for property the issuance of each class of the car- retired. rier’s outstanding long-term or equip- (b) This account shall be divided to ment obligations. Separate subdivi- show the liability to (1) affiliated com- sions shall be maintained for each issue panies (See definition 4), and (2) others. of obligations. (See instruction 5–3.) 774 Accrued liability; casualty and OTHER LONG-TERM LIABILITIES other claims. (a) This account shall be credited 771 Accrued liability; pension and wel- with the amounts charged to operating fare. expense to provide for estimated liabil- (a) This account shall include the ities for claims for deaths of or injuries credit balances accrued representing to employees and others, and for dam- the estimated liability of the carrier ages to property not owned or held for amounts provided by charges to op- under lease by the carrier; for claims erating expenses, including amounts for loss, destruction, damage, or delays contributed by employees, irrespective to property entrusted to the carrier for of whether carried in special funds or transportation or storage; for revenue in general funds of the carrier, for pen- over charges, such as those covered by

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reparation claims; and for similar 781 Interest in default. items. No credits shall be made to this This account shall include the account for amounts recoverable from amount of matured and unpaid interest insurance companies or others. (for which no provision has been made (b) Separate subaccounts shall be for current settlement) on all indebted- maintained to show the amount pro- ness issued or assumed by the account- vided for each liability and the nature ing company except interest which is of and amounts of debits and credits to added to the principal of the debt on the subaccounts. which incurred. Where interest is in de- (c) If settlements for claims when au- fault, subsequent accruals shall be dited are charged to this account, the credited to this account. balances for each year shall be kept NOTE: Interest matured and unpaid on debt separately until all items have been to affiliated companies, if not subject to cur- adjusted and cleared. If the settlements rent settlement, shall be included in account when audited are charged to the appro- 769, ‘‘Accounts payable; Affiliated compa- priate expense accounts, the balance in nies.’’ this account shall be adjusted through the expense accounts so as to reflect 782 Other liabilities. the probable liability at the close of This account shall include assess- each accounting period for claims ments for public improvements; re- which have been or may be filed for ac- tained amounts due governmental tuarial occurrences. agencies for construction work; per- (d) Estimates of amounts payable centages due contractors to be paid within one year covering liability for upon completion of contracts; deposits claims shall be transferred from this for construction of side tracks to be re- account to account 759, ‘‘Accrued ac- funded on basis of an agreed portion of counts payable.’’ the earnings from the traffic handled over the tracks and similar liabilities 775 Other accrued liabilities. not payable within one year: This ac- (a) This account shall be credited count shall also include other deferred with the amounts accrued for esti- and noncurrent liabilities not other- mated liabilities or losses provided by wise provided for in general balance charges to operating expense or income sheet accounts. Assessments for public accounts which are not provided for in improvements and amounts due gov- any of the preceding accrued liability ernmental agencies and others for pay- accounts. ments to be made within one year, (b) Separate subaccounts shall be shall be included in account 763, ‘‘Other maintained to show the amount pro- current liabilities,’’ or other appro- vided for each liability and the nature priate current liability account. of and amounts of debits and credits to the subaccounts. 783 Deferred revenues—transfers from (c) Upon accomplishment of the pur- government authorities. pose for which each accrued liability This account shall include amounts was provided in this account, any re- representing the cost of acquisition, maining balance in the applicable sub- addition to, or improvement of depre- account shall be cleared to the appropriate operating expense or other ac- ciable operating property received, or count. Prior Board approval shall be receivable from Federal, state, or local required for clearance of balances in authorities. Items to be included in accrued liability subaccounts which this account shall be determined in ac- were originally established by author- cordance with instruction 1–15. ity of the Board. An appropriate record shall be main- (d) Estimates of amounts payable tained of each asset associated with within one year covering any liability these transfers showing: (1) Original included in this account shall be trans- cost to carrier (or fair value if not pur- ferred to account 759, ‘‘Accrued ac- chased), (2) accumulated depreciation, counts payable.’’ and (3) estimated salvage value, if any.

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This account shall be charged peri- (b) This account shall be credited odically, and account 503, ‘‘Railway Op- with the amount of investment tax erating Revenues—Amortization of De- credits utilized in the current year for ferred Transfers from Government Au- income tax purposes but deferred for thorities,’’ shall be credited with accounting purposes (see Instruction 1– amounts equal to the depreciation 10). costs of the assets to which they apply. (c) This account shall be concur- When such assets are retired or other- rently debited with amounts credited wise disposed of, this account shall be to account 557, ‘‘Provision for deferred charged, and account 503 concurrently taxes,’’ representing amortization of credited with any remaining associated amounts for investment tax credits de- amounts. (See instruction 1–15.) ferred in prior accounting periods. (d) This account shall be maintained NOTE A: This account shall not include in such a manner as to show sepa- government transfers in the form of, or des- rately: ignated for the purchase of land or other non-depreciable property. Transfers of this (1) the unamortized balance of de- type are includible in account 795, ‘‘Other ferred income taxes and deferred in- Capital.’’ vestment tax credit separately as of NOTE B: This account shall not include the beginning and as of the end of each transfers from the Federal Government to ei- year (2) the entries that affected the ther Amtrak or ConRail representing the account balance, and (3) the current cost of depreciable and non-depreciable oper- year’s net credits or charges applicable ating property. to timing differences and deferred in- (49 U.S.C. 304, 320) vestment tax credits. [43 FR 30558, July 17, 1978] NOTE A: For definitions of income tax ter- minology see Definition 17. Account 557, ‘‘Provision for deferred taxes’’, and account DEFERRED CREDITS 591, ‘‘Provision for deferred taxes—Extraor- dinary item,’’ shall concurrently be charged 784 Other deferred credits. (credited) with the net effect of material (a) This account shall include the timing effects. Other related deferred income amount of credit balances in suspense tax balance sheet accounts are: Account 714, ‘‘Deferred income tax debit.’’ accounts that cannot be disposed of Account 744, ‘‘Accumulated deferred income until services are performed or addi- tax debits.’’ tional information is received, such as Account 762, ‘‘Deferred income tax credits.’’ amounts received from sale of mileage (49 U.S.C. 10321, 11145; 5 U.S.C. 553) tickets, to be disposed of as mileage is honored; amounts received from sales [47 FR 12350, Mar. 23, 1982, as amended at 67 of excess baggage script, to be disposed FR 57533, Sept. 11, 2002] of as coupons are honored; interchange- SHAREHOLDERS’ EQUITY able mileage credential ticket redemption funds, amounts collected from the 791 Capital stock. sale of damaged, unclaimed, and over (a) This account shall include the par freight held pending final disposition, value of stocks with par value; the unadjusted credit items not otherwise stated value of no par stock having a provided for; and similar items, the stated value; and the cash value of the proper disposition of which is uncer- consideration received or the amount tain. approved by the Board for no par stocks without stated value for all 786 Accumulated deferred income tax shares of capital stock or other form of credits. proprietary interest in the accounting (a) This account shall be credited company which have been issued to with the noncurrent portions of de- bona fide purchasers and have not been ferred income tax debits and credits reacquired and canceled, also shares of when the balance is a net credit, as de- stock nominally issued. termined by Instruction 1–10. A net (b) This account also shall include debit balance shall be included in ac- amounts transferred from retained count 744, ‘‘Accumulated deferred in- earnings for no par stock without stat- come tax debits’’. ed value when approved by the Board.

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(c) The amount of the consideration (g) When the subscriber has paid his received from the sale of par value subscription in full and is entitled to stock and no par stock having a stated receive certificates representing the value in excess of the amount credited shares for which he has subscribed, the to this account shall be credited to ac- par value of stocks having par value, count 794, ‘‘Premiums and assessments the stated value of no par stock, or the on capital stock.’’ agreed purchase price or the price au- (d) When capital stock is retired or thorized by the Board for no par stock canceled, this account shall be charged without stated value, as appropriate, with the amount at which such stock is shall be included in the division for the carried in this account. In the case of class for which the certificates are no par stock without stated value, the issued. amount to be charged shall be the pro- (h) Each of the above classes shall portion, applicable to the reacquired also be divided into subclasses accord- shares immediately prior to reacquisi- ing to differences in dividend or inter- tion, of the total book liability in- est rights, voting rights, or conditions cluded herein of actually outstanding under which the securities may be re- shares of the particular class and series tired. of stock of which the reacquired shares NOTE A: When a general levy or assessment are a part. is made against the holders of capital stock (e) The amounts included in this ac- requiring the payment of any sum in addi- count shall be recorded so as to show tion to the consideration agreed upon at the (1) par value of shares of par value time of sale, the amount collected shall be stock; the stated value of shares of no credited to account 794, ‘‘Premiums and as- par stock, and the amount paid in or sessments on capital stock.’’ approved by the Board for no par stock NOTE B: When no par stock without stated without stated value (pledged or value is issued in exchange for par stock, or unpledged), held in the company’s no par stock with stated value, amounts included in account 794, ‘‘Premiums and as- treasury, by its agents or trustees, or sessments on capital stock,’’ for the retired otherwise subject to its control, includ- stock, shall be transferred to this account, ing shares nominally but never actu- and any amounts icluded in the discount ac- ally issued and (2) par value of shares count for the retired stock shall be charged of par value stock, the stated value of to account 795, ‘‘Other capital’’; Provided, shares of no par stock, and the amount however, That any excess over the amount of paid in or approved by the Board for accumulated net gains applicable to the sub- shares of no par stock without stated class exchanged included in account 795 shall be charged to account 616, ‘‘Other debits to value, issued and actually outstanding, retained earnings.’’ being the shares not held by the com- NOTE C: An appropriate record shall be pany, its agents, or trustees, or subject maintained with respect to shares of capital to its control. stock showing the number of shares nomi- (f) The amounts recorded shall be fur- nally issued, nominally outstanding, actu- ther divided so as to show the amount ally issued and actually outstanding. of each class of stock issued, separated NOTE D: See definitions 3, actually issued; as between par value and no par value 4, actually outstanding; 25, nominally issued; stock, as follows: and 26, nominally outstanding. (1) Common stock. Stocks which have [42 FR 35017, July 7, 1977, as amended at 67 no preference over other issues of stock FR 57533, Sept. 11, 2002] in distribution of dividends or of assets. 792 Capital stock to be distributed. (2) Preferred stock. Stocks having This account shall include the com- preference over other issues of stock in pany’s liability under agreements to distribution of dividends or of assets. exchange its capital stock for the out- (3) Debenture stock. Stock issued standing securities of companies whose under a contract to pay a specified re- physical property has been acquired turn at specified intervals. under such agreements, but whose se- (4) Receipts outstanding for installments curities have not yet been surrendered paid. Receipts for payments on account for exchange. This account shall also of subscriptions to capital stock. include stock dividends declared that

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remain undistributed at the end of an pany’s capital stock; and forgiveness accounting period. by stockholders as a contribution to capital of long-term debt owed to [42 FR 35017, July 7, 1977, as amended at 52 FR 4347, Feb. 11, 1987] them. (b) This account shall be charged 793 Discount on capital stock. with amounts included herein when This account shall include the excess capitalized by stock dividends or other- of the par or stated value recorded in wise with the approval of the Board, account 791, ‘‘Capital stock,’’ (at the and losses from retirement or resale of time of original sale of par value stock reacquired shares up to an amount not and no par stock with a stated value) in excess of credits included herein ap- plus accrued dividends, if any, over the plicable to the reacquired shares; and cash value of the consideration re- may be charged with the amortization ceived. of discount on capital stock to the extent of credits herein for such stock. 794 Premiums and assessments on (c) This account shall be subdivided capital stock. to show each source of other capital. (a) This account shall include the ex- (d) This account shall be subdivided cess of the actual cash vlaue of the to show the cumulative amounts rep- consideration received (at the time of resenting the cost of nondepreciable original sale of par value stock and no operating property received from gov- par stock with a stated value) over the ernment authorities, in accordance par or stated value of the stock issued, with the provisions of instruction 1–15. plus accrued dividends, if any, and sub- (e) This account shall also be subsequent assessments against stock- divided to show the cumulative holders representing payments re- amounts representing the cost of de- quired in excess of par or stated value. preciable and nondepreciable operating (b) Separate subdivisions shall be property received by Amtrak or Con- maintained for premiums and for as- rail from the Federal Government. (See sessments on each class and series of instruction 1–15.) stock. (49 U.S.C. 304, 320) (c) When capital stock is retired and canceled, this account shall be charged [42 FR 35017, July 7, 1977, as amended at 43 with the amount of assessments and FR 30558, July 17, 1978] premiums originally recorded for the 797 Retained earnings; appropriated. shares of stock retired and canceled. This account shall include the accu- 795 Other capital. mulated amount of retained earnings (a) This account shall include all which has been appropriated and set other capital not classified as retained aside according to provisions of mort- earnings. It shall include such items as gages, deeds of trust, reorganization the amount of consent dividends on the plans, or other agreements requiring accounting company’s capital stock; payments into capital funds, sinking capital arising from donations by funds, or other funds; and also appro- stockholders of capital stock of the priations for general contingencies, company or other contribution to cap- possible future losses (not in the cat- ital; amounts representing reduction of egory of liabilities actually incurred), the par or recorded value of the ac- and other corporate purposes. This accounting company’s capital stock, in- count shall be subdivided by classes of cluding reductions arising in merger of appropriations showing the purpose for a railroad and pooling of interest (see which each appropriation is made. instruction 2–15(d)); capital from reorganization of the company (see instruc- 798 Retained earnings; unappropri- tion 2–16); and amounts of forfeited ated. subscriptions to the accounting com- (a) This account shall include the net pany’s capital stock. This account balance (debit or credit) of the shall also include gains from the acqui- amounts included in accounts 601 to sition, retirement, or resale of reac- 623, inclusive. It shall not include quired shares of the accounting com- transfers either to or from account 795,

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‘‘Other capital,’’ unless authorized ASSETS—Continued upon application to the Board. Total current assets. (b) Any balance representing retained Special funds: 715. Sinking funds. earnings not segregated at the date of 716. Capital funds. the balance sheet shall be included in a 717. Other funds. subdivision of this account. Total special funds. (c) The balance of accounts 601 to 623, Investments: inclusive, shall be closed into this ac- 721. Investments and advances; affiliated companies. Undistributed earnings from certain invest- count at the end of each calendar year. ments in account 751. 721.5. Adjustments; investments and advances—affili- 798.1 Net unrealized loss on noncur- ated companies. rent marketable securities. Net—investments and advances—affiliated companies. This account shall include the accu- 722. Other investments and advances. mulated changes in account 724 to the 723. Adjustments; Other investments and advances. 724. Allowance for net unrealized loss on noncurrent extent that these changes represent a marketable equity securities—Cr. net unrealized loss (aggregate cost ex- Net—other investments and advances. ceeds market value). Total investments. Tangible property: 798.5 Treasury stock. 731. Road and equipment property. 735. Accumulated depreciation; Road and equipment (a) This account shall include in sub- property. divisions for each class the reacquisi- 736. Accumulated amortization; Road and equipment tion cost of capital stock which has property—Defense projects. Net road and equipment property. been actually issued or assumed by the 732. Improvements on leased property. carrier, then reacquired, and is neither 733. Accumulated depreciation; Improvements on retired nor canceled, nor properly in- leased property. 734. Accumulated amortization; Improvements on cludable in sinking or other funds. leased property—Defense projects. (b) This account shall be maintained Net improvements on leased property. to reflect separately securities pledged Total carrier property. 737. Property used in other than carrier operations. and unpledged. 738. Accumulated depreciation; Property used in (c) This account shall be shown on other than carrier operations. the balance sheet as a deduction in ar- Net—property used in other than carrier oper- riving at stockholders’ equity. ations. Total tangible property. NOTE: The accounting for the reacquisition Intangible property: and resale of capital stock shall be in accord- 739. Organization expenses. ance with instruction 5–4, paragraphs (e) Other assets and deferred debits: through (g). 741. Other assets. 743. Other deferred debits. FORM OF GENERAL BALANCE SHEET 744. Accumulated deferred income tax debits. STATEMENT Total other assets and deferred debits. Total assets. The classified form of general balance LIABILITIES AND SHAREHOLDERS’ EQUITY sheet statement is designed to show the fi- Current liabilities: nancial condition of the accounting company 751. Loans and notes payable. at any specified date. 752. Accounts payable; Interline and other balances. 753. Audited accounts and wages payable. ASSETS 754. Accounts payable; Other. 755. Interest payable. Current assets: 756. Dividends payable. 701. Cash. 757. Payables to affiliated companies. 702. Temporary cash investments. 759. Accrued accounts payable. 703. Special deposits. 760. Federal income taxes accrued. 704. Loans and notes receivable. 761. State and other income taxes accrued. 705. Accounts receivable; Interline and other bal- 761.5. Other taxes accrued. ances. 762. Deferred income tax credits. 706. Accounts receivable; Customers. 707. Accounts receivable; Other. 763. Other current liabilities. 708. Interest and dividends receivable. 764. Equipment obligations and other long-term debt 708.5. Receivables from affiliated companies. due within one year. 709. Accrued accounts receivable. Total current liabilities. 709.5. Allowance for uncollectible accounts. Long-term debt due after one year: 1 Net receivables. 765. Funded debt unmatured. 710. Working funds. 766. Equipment obligations. 711. Prepayments. 766.5. Capitalized lease obligations. 712. Material and supplies. 767. Receivers’ and trustees’ securities. 713. Other current assets. 768. Debt in default. 714. Deferred income tax debits. 769. Accounts payable; Affiliated companies. 128

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ASSETS—Continued ASSETS—Continued 770.1 Unamortized debt discount. 798. Retained earnings; Unappropriated. 770.2 Unamortized premium on debt. 798.1 Net unrealized loss on noncurrent marketable Total long-term debt due after one year. equity securities. Other long-term liabilities: Total retained earnings. 771. Accrued liability; Pension and welfare. 798.5 Treasury stock. 772. Accrued liability; Leased property. Total shareholders’ equity. 774. Accrued liability; Casualty and other claims. Total liabilities and shareholders’ equity. 775. Other accrued liabilities. 781. Interest in default.

782. Other liabilities. 1 Total other long-term liabilities. To be divided as to ‘‘Total issued’’ and ‘‘Held by or for company.’’ Deferred credits: 783. Deferred revenues—transfers from government (49 U.S.C. 12, 20, 304, 913 and 1012) authorities. 784. Other deferred credits. [42 FR 35017, July 7, 1977, as amended at 42 786. Accumulated deferred income tax credits. FR 56611, Oct. 27, 1977; 43 FR 30558, July 17, Total deferred credits. 1978] Shareholders’ equity: Capital stock: 791. Capital stock. CONVERSION TABLES 792. Liability for conversion of capital stock. 793. Discount on capital stock. Total capital stock. Operating Expense Accounts. Additional capital: Transportation Operating Revenue Ac- 794. Premiums and assessments on capital stock. counts. 795. Other capital. Total additional capital. Income Accounts. Retained earnings: Retained Income Accounts. 797. Retained earnings; Appropriated. General Balance Sheet Accounts. OPERATING EXPENSE ACCOUNTS—CONVERSION TABLE [See footnotes at end of table]

System of accounts effective prior to Jan 1, 1978 System of accounts effective Jan. 1, 1978

Account No.1 Account title No.

Maintenance of Roadway and Structures

Superintendence ...... 201 11–13–02 21–13–02 ...... 41–13–02 61–13–02 11–13–03 21–13–03 ...... 41–13–03 61–13–03 11–13–04 21–13–04 ...... 41–13–04 61–13–04 11–13–05 21–13–05 ...... 41–13–05 61–13–05 11–13–06 21–13–06 ...... 41–13–06 61–13–06 Roadway maintenance...... 202 11–11–10 21–11–10 39/40–11–10 41–11–10 61–11–10 11–12–10 21–12–10 39/40–12–10 41–12–10 61–12–10 11–11–11 21–11–48 39/40–11–48 41–11–48 61–11–48 11–12–11 21–12–11 39/40–12–11 41–12–11 61–12–48 Tunnels and subways ...... 206 11–11–11 21–11–11 39/40–11–11 41–11–11 61–11–11 11–12–11 21–12–11 39/40–12–11 41–12–11 61–12–11 11–11–48 21–11–48 39/40–11–48 41–12–48 61–12–48 11–12–48 21–12–48 39/40–12–48 41–12–48 61–12–48 Bridges, trestles and culverts ...... 208 11–11–12 21–11–12 39/40–11–12 41–11–12 61–11–12 1–12–12 21–12–12 39/40–12–12 41–12–12 61–12–12 11–11–48 21–11–48 39/40–11–48 41–11–48 61–11–48 11–12–48 21–12–48 39/40–12–48 41–12–48 61–12–48 Elevated structures ...... 210 11–11–12 21–11–12 39/40–11–12 41–11–12 61–11–12 11–12–12 21–12–12 39/40–12–12 41–12–12 61–12–12 11–11–48 21–11–48 39/40–11–48 41–11–48 61–11–48 11–12–48 21–12–48 39/40–12–48 41–12–48 61–12–48 Ties ...... 212 ...... 21–11–13 ...... 21–12–13 ...... 21–11–48 ...... 21–12–48 ...... Rails ...... 214 ...... 21–11–14 ...... 21–12–14 ...... 21–11–48 ...... 21–12–48 ...... Other track material ...... 216 ...... 21–11–15 ...... 21–12–15 ...... 21–11–48 ...... 21–12–48 ...... Ballast ...... 218 ...... 21–11–16 ......

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OPERATING EXPENSE ACCOUNTS—CONVERSION TABLE—Continued [See footnotes at end of table]

System of accounts effective prior to Jan 1, 1978 System of accounts effective Jan. 1, 1978

Account No.1 Account title No.

...... 21–12–16 ...... 21–11–48 ...... 21–12–48 ...... Track laying and surfacing ...... 220 11–11–17 21–11–17 39/40–11–17 41–11–17 61–11–17 11–12–17 21–12–17 39/40–12–17 41–12–17 61–12–17 11–11–48 21–11–48 39/40–11–48 41–11–48 61–11–48 11–12–48 21–12–48 39/40–12–48 41–12–48 61–12–48 Fences, snowsheds and signs ...... 221 11–13–28 21–13–28 39/40–13–28 41–13–28 61–13–28 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Station and office buildings ...... 227 11–13–23 21–13–23 39/40–13–23 41–13–23 61–13–23 11–13–33 21–13–33 39/40–13–33 41–13–33 61–13–33 11–13–35 21–13–35 39/40–13–35 41–13–35 61–13–35 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Roadway buildings ...... 229 11–13–28 21–13–28 39/40–13–28 41–13–28 61–13–28 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Water stations...... 231 11–13–27 21–13–27 39/40–13–27 41–13–27 61–13–27 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Fuel stations ...... 233 11–13–27 21–13–27 39/40–13–27 41–13–27 61–13–27 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Shops and enginehouses ...... 235 11–13–24 21–13–24 39/40–13–24 41–13–24 61–13–24 11–13–25 21–13–25 39/40–13–25 41–13–25 61–13–25 11–13–26 21–13–26 39/40–13–26 41–13–26 61–13–26 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Grain elevators ...... 237 11–13–35 21–13–35 39/40–13–35 41–13–35 61–13–35 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Storage warehouses...... 239 11–13–28 21–13–28 39/40–13–28 41–13–28 61–13–28 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Wharves and docks ...... 241 11–13–32 21–13–32 39/40–13–32 41–13–32 61–13–32 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Coal and ore wharves ...... 243 11–13–29 21–13–29 39/40–13–29 41–13–29 61–13–29 11–13–30 21–13–30 39/40–13–30 41–13–30 61–13–30 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 TOFC/COFC terminals ...... 244 11–13–31 21–13–31 39/40–13–31 41–13–31 61–13–31 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Communication systems...... 247 11–13–20 21–13–20 39/40–13–20 41–13–20 61–13–20 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Signals and interlockers ...... 249 11–11–19 21–11–19 39/40–11–19 41–11–19 61–11–19 11–12–48 21–12–48 39/40–12–48 41–12–18 61–12–18 11–11–48 21–11–48 39/40–11–48 41–11–48 61–11–48 11–12–48 21–12–48 39/40–12–48 41–12–48 61–12–48 Power plants ...... 253 11–13–21 21–13–21 39/40–13–21 41–13–21 61–13–21 11–13–24 21–13–24 39/40–13–24 41–13–24 61–13–24 11–13–28 21–13–25 39/40–13–25 41–13–25 61–13–25 11–13–26 21–13–26 39/40–13–26 41–13–26 61–13–26 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Power transmission systems ...... 257 11–13–21 21–13–21 39/40–13–21 41–13–21 61–13–21 11–13–24 21–13–24 39/40–13–24 41–13–24 61–13–24 11–13–25 21–13–25 39/40–13–25 41–13–25 61–13–25 11–13–26 21–13–26 39/40–13–26 41–13–26 61–13–26 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Miscellaneous structures...... 265 11–13–28 21–13–28 39/40–13–28 41–13–28 61–13–28 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Roadway property; depreciation ...... 266 ...... 62–11–00 ...... 62–12–00 ...... 62–13–00 Retirements; road ...... 267 ...... 2 61–11–99 ...... 61–12–99 ...... 61–13–99 Roadway machines ...... 269 11–13–36 21–13–36 39/40–13–36 41–13–36 61–13–36 11–13–48 21–13–48 39/40–13–48 41–13–48 61–13–48 Dismantling retired road property ...... 270 11–11–39 21–11–39 ...... 41–11–39 61–11–39 11–12–39 21–12–39 ...... 41–12–39 61–12–39 11–13–39 21–13–39 ...... 41–13–39 61–13–39 Small tools and supplies ...... 271 11–13–37 21–13–37 39/40–13–37 41–13–37 61–13–37 Removing snow, ice and sand ...... 272 11–13–38 21–13–38 39/40–13–38 41–13–38 61–13–38 Public improvements; maintenance ...... 273 11–11–22 21–11–22 39/40–11–22 41–11–22 61–11–22 11–12–22 21–12–22 39/40–12–22 41–12–22 61–12–22

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OPERATING EXPENSE ACCOUNTS—CONVERSION TABLE—Continued [See footnotes at end of table]

System of accounts effective prior to Jan 1, 1978 System of accounts effective Jan. 1, 1978

Account No.1 Account title No.

Injuries to persons ...... 274 11–11–99 ...... 61–11–99 11–12–99 ...... 61–12–99 11–13–99 ...... 61–13–99 11–61–92 21–61–92 41–61–92 ...... 61–61–92 ...... 52–11–00 ...... 52–12–00 ...... 52–13–00 Insurance ...... 275 ...... 53–11–00 ...... 53–12–00 ...... 53–13–00 Stationery and printing ...... 276 ...... 21–11–xx ...... 2 41–11–xx ...... 21–12–xx ...... 41–12–xx ...... 21–13–xx ...... 41–13–xx ...... Employees health and welfare benefits ...... 277 12–11–00 ...... 12–12–00 ...... 12–13–00 ...... Maintaining joint tracks, yards and other facilities—Dr ...... 278 ...... 37–11–00 ...... 37–12–00 ...... 37–13–00 ...... Maintaining joint tracks, yards and other facilities—Cr ...... 279 ...... 38–11–00 ...... 38–12–00 ...... 38–13–00 ...... Right-of-way expenses...... 281 11–11–99 21–11–99 ...... 41–11–99 61–11–99 11–12–99 21–12–99 ...... 41–12–99 61–12–99 11–13–99 21–13–99 ...... 41–13–99 61–13–99 Other expenses ...... 282 11–11–99 21–11–99 ...... 41–11–99 61–11–99 11–12–99 21–12–99 ...... 41–12–99 61–12–99 11–13–99 21–13–99 ...... 41–13–99 61–13–99

Maintenance of Equipment

Superintendence ...... 301 11–21–01 21–12–01 ...... 41–21–01 61–21–01 11–22–01 21–22–01 ...... 41–22–01 61–22–01 11–23–01 21–23–01 ...... 41–23–01 61–23–01 Shop machinery ...... 302 11–21–40 21–21–40 39/40–21–40 41–21–40 61–21–40 11–22–40 21–22–40 39/40–22–40 41–22–40 61–22–40 11–23–40 21–22–40 39/40–23–40 41–23–40 61–23–40 Power plant machinery ...... 304 11–13–21 21–13–21 39/40–13–21 41–13–21 61–13–21 11–13–28 21–13–28 39/40–13–28 41–13–28 61–13–28 Shop and power plant machinery; depreciation ... 305 ...... 62–13–00 ...... 62–21–00 ...... 62–22–00 ...... 62–23–00 Dismantling retired shop and power plant machinery ...... 306 11–13–39 21–13–39 ...... 41–13–39 61–13–39 11–21–39 21–21–39 ...... 41–21–39 61–21–39 11–22–39 21–22–39 ...... 41–22–39 61–22–39 11–23–39 21–23–39 ...... 41–23–39 61–23–39 Locomotive repairs ...... 311 11–21–41 21–21–41 39/40–21–41 41–21–41 61–21–41 11–21–48 21–21–48 39/40–21–48 41–21–48 61–21–48 11–31–62 21–31–62 ...... 41–31–62 61–31–62 Freight-train cars; repairs ...... 314 11–22–42 21–22–42 39/40–22–42 41–22–42 61–22–42 11–22–48 21–22–48 39/40–22–48 41–22–48 61–22–48 11–31–62 21–31–62 ...... 41–31–62 61–31–62 Passenger-train cars; repairs ...... 317 11–25–45 21–25–45 39/40–25–45 41–25–45 61–25–45 11–25–48 21–25–48 39/40–25–48 41–25–48 61–25–48 Highway revenue equipment; repairs ...... 318 11–23–43 21–23–43 39/40–23–43 41–23–43 61–23–43 11–23–48 21–43–48 39/40–23–48 41–23–48 61–23–48 Floating equipment; repairs ...... 323 11–23–44 21–23–44 39/40–23–44 41–23–44 61–23–44 11–23–48 21–23–48 30/40–23–48 41–23–48 61–23–48 Work equipment; repairs ...... 326 11–23–47 21–23–47 39/40–23–47 41–23–47 61–23–47 11–23–48 21–23–48 39/40–23–48 41–23–48 61–23–48 Miscellaneous equipment; repairs ...... 328 11–23–47 21–23–47 39/40–23–47 41–23–47 61–23–47 11–23–48 21–23–48 39/40–23–48 41–23–48 61–23–48 Dismantling retired equipment ...... 329 11–21–39 21–21–39 ...... 41–21–39 61–21–39

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OPERATING EXPENSE ACCOUNTS—CONVERSION TABLE—Continued [See footnotes at end of table]

System of accounts effective prior to Jan 1, 1978 System of accounts effective Jan. 1, 1978

Account No.1 Account title No.

11–22–39 21–22–39 ...... 41–22–39 61–22–39 11–23–39 21–23–39 ...... 41–23–39 61–23–39 Retirements; equipment ...... 330 ...... 61–29–99 ...... 61–22–99 ...... 61–23–99 Equipment; depreciation ...... 331 ...... 62–21–00 ...... 62–22–00 ...... 62–23–00 Injuries to persons ...... 332 11–21–99 ...... 61–21–99 11–22–99 ...... 61–22–99 11–23–99 ...... 61–23–99 11–61–99 21–61–92 41–61–92 ...... 61–61–92 ...... 52–21–00 ...... 52–22–00 ...... 52–23–00 Insurance ...... 333 ...... 53–21–00 ...... 53–22–00 ...... 53–23–00 Stationery and printing ...... 334 ...... 2 21–21–xx ...... 2 41–21–xx ...... 21–22–xx ...... 41–22–xx ...... 21–23–xx ...... 41–23–xx ...... Employees health and welfare benefits ...... 335 12–21–00 ...... 12–22–00 ...... 12–23–00 ...... Joint maintenance of equipment expenses—Dr ... 336 ...... 37–21–00 ...... 37–22–00 ...... 37–23–00 ...... Joint maintenance of equipment expenses—Cr ... 337 ...... 38–21–00 ...... 38–22–00 ...... 38–23–00 ...... Other expenses ...... 339 11–21–99 21–21–99 ...... 41–21–99 61–21–99 11–22–99 21–22–99 ...... 41–22–99 61–22–99 11–23–99 21–23–99 ...... 41–23–99 61–23–99 Various ...... 11–23–46 21–23–46 39/40–23–46 41–23–46 61–23–46

Traffic Expense Account

Superintendence ...... 351 11–61–01 21–61–01 ...... 41–61–01 61–61–01 Outside agencies ...... 352 11–61–88 21–61–88 ...... 41–61–88 61–61–88 11–61–89 21–61–89 ...... 41–61–89 61–61–89 Advertising ...... 353 11–61–93 21–61–93 ...... 41–61–93 61–61–93 Traffic associations...... 354 11–61–93 21–61–93 ...... 41–61–93 61–61–93 Fast freight lines ...... 355 11–61–99 21–61–99 ...... 41–61–99 61–61–99 Industrial and immigration bureaus ...... 356 11–61–90 21–61–90 ...... 41–61–90 61–61–90 Insurance ...... 357 ...... 53–61–00 Stationery and printing ...... 358 ...... 2 21–61–xx ...... 2 41–61–xx ...... Employees health and welfare benefits ...... 359 12–61–00 ...... Other expenses ...... 360 11–61–99 21–61–99 ...... 41–61–99 61–61–99

Transportation Expense Accounts

Superintendence ...... 371 11–31–01 21–31–01 ...... 41–31–01 61–31–01 11–32–01 21–32–01 ...... 41–32–01 61–32–01 11–34–01 21–34–01 ...... 41–34–01 61–34–01 11–35–01 21–35–01 ...... 41–35–01 61–35–01 Dispatching trains...... 372 11–31–58 21–31–58 ...... 41–31–58 61–31–58 Station employees ...... 373 11–33–71 ...... 11–35–76 ...... 11–35–77 ...... Weighing, inspection and demurrage bureaus ..... 374 ...... 41–31–99 ...... Coal and ore wharves ...... 375 11–34–74 21–34–74 ...... 41–34–74 61–34–74 Station supplies and expenses ...... 376 ...... 21–33–71 ...... 41–33–71 ...... 21–35–76 ...... 41–35–76 61–35–76 ...... 21–35–77 ...... 41–35–77 61–35–77 Yardmasters and yard clerks ...... 377 11–32–65 ...... 11–32–66 ...... Yard conductors and brakemen ...... 378 11–32–64 ...... Yard switch and signal tenders ...... 379 11–32–59 ......

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OPERATING EXPENSE ACCOUNTS—CONVERSION TABLE—Continued [See footnotes at end of table]

System of accounts effective prior to Jan 1, 1978 System of accounts effective Jan. 1, 1978

Account No.1 Account title No.

Yard enginemen ...... 380 11–32–64 ...... Yard switching fuel ...... 382 11–32–67 21–32–67 ...... 41–32–67 61–32–67 Yard switching power produced ...... 383 11–32–68 21–32–68 ...... 41–32–68 61–32–68 Yard switching power purchased ...... 384 ...... 41–32–68 ...... Servicing yard locomotives ...... 388 11–32–69 21–32–69 ...... 41–32–69 61–32–69 Yard supplies and expenses ...... 389 ...... 21–32–59 ...... 41–32–59 61–32–59 ...... 21–32–64 ...... 41–32–64 61–32–64 ...... 21–32–65 ...... 41–32–65 61–32–65 ...... 21–32–66 ...... 41–32–66 61–32–66 Operating joint yards and terminals—Dr ...... 390 ...... 37–32–00 ...... Operating joint yards and terminals—Cr ...... 391 ...... 38–32–00 ...... Train enginemen ...... 392 11–31–56 ...... Train fuel...... 394 11–31–67 21–31–67 ...... 41–31–67 61–31–67 Train power produced ...... 395 11–31–68 21–31–68 ...... 41–31–68 61–31–68 Train power purchased ...... 396 ...... 41–31–68 ...... Servicing train locomotives ...... 400 11–31–69 21–31–69 ...... 41–31–69 61–31–69 Trainmen ...... 401 11–31–57 ...... Train supplies and expenses ...... 402 ...... 21–31–56 ...... 41–31–56 61–31–56

11–31–62 21–31–62 ...... 41–31–62 61–31–62 11–33–70 21–33–70 ...... 41–33–70 ...... 11–33–71 21–33–71 ...... 41–33–71 ...... 11–33–72 21–33–72 ...... 41–33–72 ...... 11–34–75 21–34–75 ...... 41–34–75 61–34–75 11–31–99 21–31–99 ...... 41–31–99 61–31–99 Operating sleeping cars ...... 403 11–41–01 21–41–01 ...... 41–41–01 61–41–01 11–41–57 21–41–57 ...... 41–41–57 61–41–57 11–45–76 21–45–76 ...... 41–45–76 61–45–76 11–41–99 21–41–99 ...... 41–41–99 61–41–99 Signal and interlocker operation ...... 404 11–31–59 21–31–59 ...... 41–31–59 61–31–59 Crossing protection ...... 405 11–31–61 21–31–61 ...... 41–31–61 61–31–61 Drawbridge operations ...... 406 11–31–60 21–31–60 ...... 41–31–60 61–31–60 Communication system operation ...... 407 11–35–77 21–35–77 ...... 41–35–77 61–35–77 Operating floating equipment ...... 408 11–34–01 21–34–01 ...... 41–34–01 61–34–01 11–34–73 21–34–73 ...... 41–34–73 61–34–73 11–34–74 21–34–74 ...... 41–34–74 61–34–74 Employees health and welfare benefits ...... 409 12–31–00 ...... 12–32–00 ...... 12–33–00 ...... 12–34–00 ...... 12–35–00 ...... Stationery and printing ...... 410 ...... 2 21–31–xx ...... 2 41–31–xx ...... 21–32–xx ...... 41–32–xx ...... 21–34–xx ...... 41–34–xx ...... 21–35–xx ...... 41–35–xx ...... Other expenses ...... 411 11–31–99 21–31–99 ...... 41–31–99 61–31–99 11–32–99 21–32–99 ...... 41–32–99 61–32–99 11–34–99 21–34–99 ...... 41–34–99 61–34–99 11–35–99 21–35–99 ...... 41–35–99 61–35–99 Operating joint tracks and facilities—Dr ...... 412 ...... 37–31–00 ...... 37–32–00 ...... 37–34–00 ...... 37–35–00 ...... Operating joint tracks and facilities—Cr ...... 413 ...... 38–31–00 ...... 38–32–00 ...... 38–34–00 ...... 38–35–00 ...... Insurance ...... 414 ...... 53–31–00 ...... 53–32–00 ...... 53–34–00 ...... 53–35–00 Clearing wrecks ...... 415 11–31–63 21–31–63 ...... 41–31–63 61–31–63 11–32–63 21–32–63 ...... 41–32–63 61–32–63 Damage to property ...... 416 ...... 52–31–00 ...... 52–32–00 ...... 52–34–00 ...... 52–35–00

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OPERATING EXPENSE ACCOUNTS—CONVERSION TABLE—Continued [See footnotes at end of table]

System of accounts effective prior to Jan 1, 1978 System of accounts effective Jan. 1, 1978

Account No.1 Account title No.

Damage to livestock on right-of-way ...... 417 ...... 52–31–00 Loss and damage; Freight ...... 418 ...... 51–31–00 ...... 51–32–00 ...... 51–33–00 ...... 51–34–00 11–35–78 21–35–78 ...... 41–35–78 61–35–78 Loss and damage; Baggage ...... 419 ...... 51–31–00 ...... 51–32–00 ...... 51–33–00 ...... 51–34–00 11–35–78 21–35–78 ...... 41–35–78 61–35–78 Injuries to persons ...... 420 11–31–99 ...... 61–61–92 11–32–99 ...... 61–31–99 11–34–99 ...... 61–32–99 11–35–99 ...... 61–34–99 11–61–92 21–61–92 41–61–92 ...... 61–35–99 ...... 52–13–00 ...... 52–32–00 ...... 52–34–00 ...... 52–35–00 11–35–78 21–35–78 ...... 41–35–78 61–35–78 TOFC/COFC terminals...... 421 11–34–73 21–34–73 ...... 41–34–73 61–34–73 11–34–74 21–34–74 ...... 41–34–74 61–34–74 11–34–75 21–34–75 ...... 41–34–75 61–34–75 Other highway transportation ...... 422 11–34–73 21–34–73 ...... 41–34–73 61–34–73 11–34–74 21–34–74 ...... 41–34–74 61–34–74 11–34–75 21–34–75 ...... 41–34–75 61–34–75

Miscellaneous Operations Expense

Dining and buffet service ...... 441 11–41–01 21–41–01 ...... 41–41–01 61–41–01 11–41–57 21–41–57 ...... 41–41–57 61–41–57 11–41–99 21–41–99 ...... 41–41–99 61–41–99 Hotels and restaurants ...... 442 11–34–99 21–34–99 ...... 41–34–99 61–34–99 Grain elevators...... 443 11–34–01 21–34–01 ...... 41–34–01 61–34–01 11–34–74 21–34–74 ...... 41–34–74 61–34–74 11–34–75 21–34–75 ...... 41–34–75 61–34–75 Producing power sold ...... 445 11–31–68 21–31–68 ...... 41–31–68 61–31–68 11–32–68 21–32–68 ...... 41–32–68 61–32–68 Other miscellaneous operations ...... 446 11–34–99 21–34–99 ...... 41–34–99 61–34–99 Operating joint miscellaneous facilities—Dr ...... 447 ...... 37–34–00 ...... 37–35–00 ...... Operating joint miscellaneous facilities—Cr ...... 448 ...... 38–34–00 ...... 38–35–00 ...... Employees Health and Welfare Benefits ...... 449 12–34–00 ......

General Operating Expenses

Salaries and expenses of general officers ...... 451 11–61–01 21–61–01 ...... 41–61–01 61–61–01 11–61–86 21–61–86 ...... 41–61–86 61–61–86 11–61–87 21–61–87 ...... 41–61–87 61–61–87 11–61–90 21–61–90 ...... 41–61–90 61–61–90 11–61–91 21–61–91 ...... 41–61–91 61–61–91 11–61–94 21–61–94 ...... 41–61–94 61–61–94 11–61–99 21–61–99 ...... 41–61–99 61–61–99 Salaries and expenses of clerks and attendants .. 452 11–61–01 21–61–01 ...... 41–61–01 61–61–01 11–61–99 21–61–99 ...... 41–61–99 61–61–99 11–61–86 21–61–86 ...... 41–61–86 61–61–86 11–61–87 21–61–87 ...... 41–61–87 61–61–87 11–61–90 21–61–90 ...... 41–61–90 61–61–90 11–61–91 21–61–91 ...... 41–61–91 61–61–91 11–61–92 21–61–92 ...... 41–61–92 61–61–92 11–61–94 21–61–94 ...... 41–61–94 61–61–94 ...... 21–61–99 ...... 41–61–99 61–61–99 General office supplies and expenses ...... 453 ...... 21–61–01 ...... 41–61–01 61–61–01 Law expenses ...... 454 11–61–92 21–61–92 ...... 41–61–92 61–61–92 Insurance ...... 455 ...... 53–61–00 Employees health and welfare benefits ...... 456 12–61–00 ......

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OPERATING EXPENSE ACCOUNTS—CONVERSION TABLE—Continued [See footnotes at end of table]

System of accounts effective prior to Jan 1, 1978 System of accounts effective Jan. 1, 1978

Account No.1 Account title No.

Pensions ...... 457 12–11–00 ...... 12–12–00 ...... 12–13–00 ...... 12–21–00 ...... 12–22–00 ...... 12–23–00 ...... 12–31–00 ...... 12–32–00 ...... 12–34–00 ...... 12–35–00 ...... 12–61–00 ...... Stationery and printing ...... 458 ...... 2 21–61–xx ...... 2 41–61–xx ...... Other expenses ...... 460 11–61–99 21–61–99 ...... 41–61–99 61–61–99 General joint facilities—Dr ...... 461 ...... 37–61–00 ...... General joint facilities—Cr ...... 462 ...... 38–61–00 ...... Various expenses...... 11–61–94 21–61–94 ...... 41–61–94 61–61–94 Footnotes: 1 Freight account activity/subactivity numbers are shown except when old accounts are exclusively passenger expenses Pas- senger and common activity/subactivity numbers shall be used where appropriate. 2 Account numbers with the last 2 digits ‘‘xx’’ indicates that the account is subdivided by applicable functions See account texts for appropriate function assignment.

TRANSPORTATION OPERATING REVENUE ACCOUNTS CONVERSION TABLE

System of accounts eff. prior to Jan. 1, 1978 System of accounts eff. Jan. 1, 1978 Account title No. No. Account title

Transportation Revenue Accounts

Transportation; rail line ...... 100 100 Transportation; rail line. Freight ...... 101 101 Freight. Passenger ...... 102 102 Passenger. Baggage ...... 103 103 Passenger-related. Sleeping car ...... 104 103 Do. Parlor and chair car ...... 105 103 Do. Other passenger-train ...... 108 103 Do. Milk ...... 109 101 Freight. Switching ...... 110 104 Switching. Water transfers ...... 113 105 Water transfers. Incidental ...... 130 110 Incidental. Dining and buffet ...... 131 103 Passenger-related. Hotel and restaurant ...... 132 110 Incidental. Station, train, and boat privileges ...... 133 110 Do. Storage; freight ...... 135 110 Do. Demurrage ...... 137 106 Demurrage. Communication ...... 138 110 Incidental. Grain elevator ...... 139 110 Do. Power ...... 141 110 Do. Rent of buildings and other property ...... 142 110 Do. Miscellaneous ...... 143 110 Do. Joint facility ...... 150 120 Joint facility. Joint facility—cr ...... 151 121 Joint facility—cr. Joint facility—dr ...... 152 122 Joint facility—dr.

INCOME ACCOUNTS CONVERSION TABLE

System of accounts eff. prior to Jan. 1, 1978 System of accounts eff. Jan. 1, 1978 Account title No. No. Account title

Income Accounts

Railway operating revenues ...... 501 501 Railway operating revenues. Revenues from miscellaneous operations ...... 502 506 Revenues from property used in other than carrier operations.

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INCOME ACCOUNTS CONVERSION TABLE—Continued

System of accounts eff. prior to Jan. 1, 1978 System of accounts eff. Jan. 1, 1978 Account title No. No. Account title

Hire of freight cars and highway revenue freight equipment; 503 ...... 32–22–00, 32–23–00, 36–22–00, and 36–23–00. credit balance. Rent from locomotives ...... 504 ...... 32–21–00, and 36–21–00. Rent from passenger-train cars ...... 505 ...... 32–25–00, and 36–25–00. Rent from floating equipment ...... 506 ...... 32–23–00, and 36–23–00. Rent from work equipment ...... 507 ...... 32–23–00, and 36–23–00. Joint facility rent income ...... 508 ...... 34–11–00, 34–12–00, 34–13–00, 34–21–00, 34– 22–00, and 34–23–00 Income from lease of road and equipment ...... 509 ...... 32–11–00, 32–12–00, 32–13–00, 32–21–00, 32– 22–00, and 32–23–00. Miscellaneous rent income ...... 510 510 Miscellaneous rent income. Income from nonoperating property ...... 511 506 Revenues from property used in other than carrier operations. 534 Expenses of property used in other than carrier operations. Separately operated properties; profit ...... 512 512 Separately operated properties; profit. Dividend income ...... 513 513 Dividend income. Interest income ...... 514 514 Interest income. Income from sinking and other reserve funds ...... 516 516 Income from sinking and other reserve funds. Release of premiums on funded debt ...... 517 517 Release of premiums on funded debt. Contributions from other companies ...... 518 518 Contributions from other companies. Miscellaneous income ...... 519 519 Miscellaneous income. Railway operating expenses ...... 531 531 Railway operating expenses. Railway tax accruals ...... 532 556 Income taxes on ordinary income.

Provision for deferred taxes ...... 533 557 Provision for deferred taxes. Expenses of miscellaneous operations ...... 534 534 Expenses of property used in other than carrier operations. Taxes on miscellaneous operating property ...... 535 535 Taxes on property used in other than carrier operations. Hire of freight cars and highway revenue freight equipment— 536 ...... 31–22–00, 35–22–00, 31–23–00, and 35–23–00. debit balance. Rent for locomotives ...... 537 ...... 31–21–00, and 35–21–00. Rent for passenger-train cars ...... 538 ...... 31–25–00, and 35–25–00. Rent for floating equipment ...... 539 ...... 31–23–00, and 35–23–00. Rent for work equipment ...... 540 ...... 31–23–00, and 35–23–00. Joint facility rents ...... 541 ...... 33–11–00, 33–12–00, 33–13–00, 33–21–00, 33– 22–00, and 33–23–00. Rent for leased roads ...... 542 ...... 31–11–00, 31–12–00, 31–13–00, 31–21–00, 31– 22–00, and 31–23–00. Miscellaneous rents ...... 543 543 Miscellaneous rents. Miscellaneous tax accruals ...... 544 544 Miscellaneous taxes. Taxes on property used in other than carrier operations ...... 535 Separately operated properties; loss ...... 545 545 Separately operated properties; loss. Interest on funded debt ...... 546 546 Interest on funded debt. Interest on unfunded debt ...... 547 547 Interest on unfunded debt. Amortization of discount on funded debt ...... 548 548 Amortization of discount on funded debt. Maintenance of investment organization ...... 549 549 Maintenance of investment organization. Income transferred to other companies ...... 550 550 Income transferred to other companies. Miscellaneous income charges ...... 551 551 Miscellaneous income charges. 553 Uncollectible accounts. Unusual or infrequent items (debit) credit ...... 555 555 Unusual or infrequent items (debit) credit. Income or loss from operations of discontinued segments ...... 560 560 Income or loss from operations of discontinued segments. Gain or loss on disposal of discontinued segments ...... 562 562 Gain or loss on disposal of discontinued segments. Extraordinary items (net) ...... 570 570 Extraordinary items (net). Income taxes on extraordinary items ...... 590 590 Income taxes on extraordinary items. Provision for deferred taxes—extraordinary items ...... 591 591 Provision for deferred taxes—extraordinary items. Cumulative effect of changes in accounting principles ...... 592 592 Cumulative effect of changes in accounting principles.

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RETAINED INCOME ACCOUNTS CONVERSION TABLE

System of accounts eff. prior to Jan. 1, 1978 System of accounts eff. Jan. 1, 1978 Account title No. No. Account title

Credit

Credit balance (at beginning of calendar year) ...... 601 601 Credit balance (at beginning of calendar year). Prior period adjustments to beginning retained income ac- 601.5 601.5 Prior period adjustments to beginning retained count. earnings account. Credit balance transferred from income ...... 602 602 Credit balance transferred from income. Other credits to retained income ...... 606 606 Other credits to retained earnings.

Debit

Debit balance (at beginning of calendar year) ...... 611 611 Debit balance (at beginning of calendar year). Debit balance transferred from income ...... 612 612 Debit balance transferred from income. Other debits to retained income ...... 616 616 Other debits to retained earnings. Appropriations for sinking and other reserve funds ...... 620 620 Appropriations for sinking and other funds. Appropriations for other purposes ...... 621 621 Appropriations for other purposes. Appropriations released ...... 622 603 Appropriations released. Dividends ...... 623 623 Dividends.

GENERAL BALANCE SHEET ACCOUNTS CONVERSION TABLE

System of accounts eff. prior to Jan. 1, 1978 System of accounts eff. Jan. 1, 1978 Account title No. No. Account title

Cash ...... 701 701 Cash. Temporary cash investments ...... 702 702 Temporary cash investments. Special deposits ...... 703 703 Special deposits. Loans and notes receivable ...... 704 704 Loans and notes receivable. 708.5 Receivables from affiliated companies. 709.5 Allowance for uncollectible accounts. Traffic, car service and other balances—dr ...... 705 705 Accounts receivable; interline and other balances. 709.5 Allowances for uncollectible accounts. 752 Accounts payable; interline and other balances. Net balance receivable from agents and conductors ...... 706 706 Accounts receivable; customers. Miscellaneous accounts receivable ...... 707 707 Accounts receivable; other. 708.5 Receivables from affiliated companies. 709.5 Allowance for uncollectible accounts. Interest and dividends receivable ...... 708 708 Interest and dividends receivable. 708.5 Receivables from affiliated companies. 709.5 Allowance for uncollectible accounts. Accrued accounts receivable ...... 709 709 Accrued accounts receivable. Working fund advances ...... 710 710 Working funds. Prepayments ...... 711 711 Prepayments. Material and supplies ...... 712 712 Material and supplies. Other current assets ...... 713 713 Other current assets. Deferred income tax charges ...... 714 714 Deferred income tax debits. Sinking funds ...... 715 715 Sinking funds. Capital and other reserve funds ...... 716 716 Capital funds. Insurance and other funds ...... 717 717 Other funds. Investment in affiliated companies ...... 721 721 Investments and advances; affiliated companies. Other investments ...... 722 722 Other investments and advances. Reserve for adjustment of investment in securities—cr ...... 723 721.5 Adjustments; investments and advances—affiliated companies. 723 Adjustments; other investments and advances. Road and equipment property ...... 731 731 Road and equipment property. Organization expenses ...... 71 739 Organization expenses. Improvements on leased property ...... 732 732 Improvements on leased property. Accrued depreciation; improvements on leased property ...... 733 733 Accumulated depreciation; improvements on leased property. Accrued depreciation; road and equipment ...... 735 735 Accumulated depreciation; road and equipment property. Amortization of defense projects; road and equipment ...... 736 736 Accumulated amortization; road and equipment property—defense projects. 734 Accumulated amortization; improvements on leased property—defense projects. Miscellaneous physical property ...... 737 737 Property used in other than carrier operations. Accrued depreciation; miscellaneous physical property ...... 738 738 Accumulated depreciation; property used in other than carrier operations.

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GENERAL BALANCE SHEET ACCOUNTS CONVERSION TABLE—Continued

System of accounts eff. prior to Jan. 1, 1978 System of accounts eff. Jan. 1, 1978 Account title No. No. Account title

Other assets ...... 741 741 Other assets. Unamortized discount on long-term debt ...... 770.1 770.1 Unamortized debt discount. Other deferred charges ...... 743 743 Other deferred debits. Accumulated deferred income tax charges ...... 744 744 Accumulated deferred income tax debits.

Liabilities

Loans and notes payable ...... 751 751 Loans and notes payable. 757 Payables to affiliated companies. Traffic, car service and other balances—cr ...... 752 752 Accounts payable; interline and other balances. 705 Accounts receivable; interline and other balances. 709.5 Allowance for uncollectible accounts. Audited accounts and wages payable ...... 753 753 Audited accounts and wages payable. Miscellaneous accounts payable ...... 754 754 Accounts payable; other. 757 Payables to affiliated companies. Interest matured unpaid ...... 755 755 Interest payable. 757 Payables to affiliated companies. Dividends matured unpaid ...... 756 756 Dividends payable. 757 Payables to affiliated companies. Unmatured interest accrued ...... 757 755 Interest payable. 757 Payables to affiliated companies. Unmatured dividends declared ...... 758 756 Dividends payable. 757 Payables to affiliated companies. Accrued accounts payable ...... 759 759 Accrued accounts payable. Federal income taxes accrued ...... 760 760 Federal income taxes accrued. Other taxes accrued ...... 761 711 Prepayments. 761 State and other income taxes accrued. 761.5 Other taxes accrued. Deferred income tax credits ...... 762 762 Deferred inome tax credits. Other current liabilities ...... 763 763 Other currrent liabilities. Equipment obligations and other debt due within one year ..... 764 764 Equipment obligations and other long-term debt due within 1 year. Funded debt unmatured ...... 765 765 Funded debt unmatured. Equipment obligations ...... 766 766 Equipment obligations. Receivers’ and trustees’ securities ...... 767 767 Receivers’ and trustees’ securities. Debt in default ...... 768 768 Debt in default. Amounts payable to affiliated companies ...... 769 769 Accounts payable; affiliated companies. Pension and welfare reserves ...... 771 771 Accrued liability; pension and welfare. Casualty and other reserves ...... 774 774 Accrued liability; casualty and other claims. 775 Other accrued liabilities. Interest in default ...... 781 781 Interest in default. Other liabilities ...... 782 782 Other liabilities. Unamortized premium on long-term debt ...... 790.2 770.2 Unamortized premium on debt. Other deferred credits ...... 784 784 Other deferred credits. Accrued liability; leased property ...... 785 772 Accrued liability; leased property. Accumulated deferred income tax credits ...... 786 786 Accumulated deferred income tax credits.

Shareholders’ Equity

Capital stock issued ...... 791 791 Capital stock. Stock liability for conversion ...... 792 792 Liability for conversion of capital stock. Discount on capital stock ...... 793 793 Discount on capital stock. Premiums and assessment on capital stock ...... 794 794 Premiums and assessments on capital stock. Paid-in surplus ...... 795 795 Other capital. Other capital surplus ...... 796 795 Do. Retained income; appropriated ...... 797 797 Retained earnings; appropriated. Retained income; unappropriated ...... 798 798 Retained earnings; unappropriated. Treasury stock ...... 798.5 798.5 Treasury stock.

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Subpart B—Branch Line counts containing 31 (train operations) Accounting System and 67 (locomotive fuel). [43 FR 1733, Jan. 11, 1978, as amended at 47 900 Definitions. FR 49596, Nov. 1, 1982; 67 FR 57533, Sept. 11, Unless otherwise required by context, 2002] the following definitions apply in this 910 Purpose and scope. subpart: Section 205(e)(1)(A) of the 3R Act di- Account means an account in the rects the office to issue regulations STB’s Uniform System of Accounts which will permit the collection and (USOA), for Railroad companies (49 publication by the Consolidated Rail CFR Part 1201, Subpart A). Corp. (ConRail), or by profitable rail- IC Act means the Interstate Com- roads of information necessary to de- merce Act (49 U.S.C. 1 et seq.), as termine accurately the revenues at- amended. tributable, avoidable costs, and service Branch Line or Branch means a rail units of light-density lines scheduled line or segment of line which (a) has for abandonment. This accurate infor- been designated on a transportation mation is intended to facilitate the de- system diagram in categories (1), (2), termination of the revenues and avoid- (3), or (4) (49 CFR 1152.10(b) (1), (2), (3), able costs in abandonment proceedings (4)); or (b) is the subject of a directed and in potential offers of subsidy. This service order under section 304(d)(3) of information is intended to be compat- the 3R Act; or (c) is the subject of a ible with the Regional Subsidy Stand- rail continuation service agreement ards, for those lines which were not entered into prior to the designation of conveyed to ConRail under the final the line on a system diagram. system plan and with the National STB or Board means the Surface Subsidy Standards (49 CFR Part 1152, Transportation Board. Subpart D), for all other lines. The pur- Designated State agency means the in- pose of the Branch Line Accounting strumentality created by a State or System regulations is to specify an ac- designated by appropriate authority to counting system for the collection and administer or coordinate its State rail publication of this information. plan as required by section 5(j)(2) of the [43 FR 1733, Jan. 11, 1978, as amended at 47 Department of Transportation Act (90 FR 49596, Nov. 1, 1982; 67 FR 57533, Sept. 11, Stat. 131) or section 402(c)(1)(A) of the 2002] 3R Act (87 Stat. 985) or regulations pro- 920 Collection of data. mulgated pursuant thereto. Railroad means a common carrier by (a) Lines for which data collection is re- railroad, as defined in section 1(3) of quired. The railroad shall collect data the Interstate Commerce Act (49 U.S.C. on all branch lines which meet the cri- 1(3)). teria listed in paragraphs 1 through 4 below. The data to be collected are 3R Act means the Regional Rail Reor- specified in section 920(b). ganization Act of 1973, Pub. L. 93–236, 87 (1) Branch lines in categories (1), (2), Stat. 985, as amended. and (3) on the System Diagram Map in- 4R Act means the Railroad Revital- clude, respectively, lines for which a ization and Regulatory Reform Act of carrier intends to file an abandonment 1976, Pub. L. 94–210, 90 Stat. 31. application within three years, lines XX, when used in place of digits in a which the carrier has under study and six-digit account number, means that are potentially subject to abandon- all accounts containing the remaining ment, and lines for which an abandon- four-digits are included. Example: 11– ment application is pending before the 21–XX refers to all salary and wage ac- Board. The collection of data on such counts for locomotives because 11 des- lines shall commence on the first day ignates salaries and wages and 21 des- of the month after the line has been ignates locomotives. Thus, 11–21–XX in- designated in one of the categories and cludes all of the following accounts: 11– will continue so long as the branch line 21–01; 11–21–40; 11–21–48; 11–21–39; and 11– is retained in one of these categories. 21–99. Similarly, XX–31–67 means all ac- The assignment and apportionment

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methodology set forth in Part 1152, states and counties traversed, delinea- Subchapter B (National Subsidy Stand- tion of mileposts, and location of agen- ards), shall be applied. cy and terminal stations. (2) For branch lines operated under (b) [Reserved] an order directing service, under sec- (c) Access to records. The records, action 304(d)(3) of the 3R Act, data shall counts, working papers, and other doc- be collected from the effective date of uments reflecting the revenues, cost, the order until the order is withdrawn. and service unit data of each branch (3) For branch lines operated under a line for which the railroad must main- rail service continuation agreement tain data shall be made available for under section 1a(6)(a) of the IC Act, inspection and examination by the data shall be collected from the effec- Board and, for lines situated within its tive date of the agreement until the State, by the designated State agency termination of the agreement. The as- at a time and place mutually agreeable signment and apportionment method- to the parties. The railroad shall also ology set forth in Part 1152, Subchapter reproduce such records for the des- B (National Subsidy Standards), shall ignated State agency, provided the be applied. agency pays the reasonable cost there- (4) For branch lines operated under a of. rail service continuation agreement (d) Waivers and modifications. The under section 304 of the 3R Act, data STB’s Office of Economics, Environ- collection shall commence on the effec- mental Analysis, and Administration tive date of the agreement and shall may, with respect to individual re- continue until the termination date of quests, upon good cause shown, waive the agreement. or modify any requirement of this sec- (b) Data to be collected. The data col- tion not required by law. lected shall include the items of revenue, expense, and service units which [43 FR 1733, Jan. 11, 1978, as amended at 44 are specified in 49 CFR 1152, as de- FR 9730, Feb. 14, 1979; 47 FR 49596, Nov. 1, scribed in the account texts listed in 1982; 67 FR 57533, Sept. 11, 2002] section 950. The format for presen- 940 Annual branch line report. tation of these data is specified in section 940. This section specifies the format in which the data collected for each [43 FR 1733, Jan. 11, 1978, as amended at 47 branch line shall be maintained. Defi- FR 49596, Nov. 1, 1982; 67 FR 57533, Sept. 11, 2002] nitions of each account are presented in section 950. 930 Publication of data. (A) Attributable revenue Amount (a) General. The railroad shall file on or before June 30 of each calendar year 101 Freight ...... 104 Switching ...... the certification included in these reg- 105 Water transfers ...... ulations as Appendix I. The railroad 106 Demurrage ...... shall include a description of each 110 Incidental ...... 121 Joint facility—credit ...... branch line using the format set forth 122 Joint facility—debit ...... in Appendix I of these regulations. The 506 Revenue from property used in other than description of each branch line requires carrier operations ...... the same data as that submitted under 510 Miscellaneous rent income ...... 519 Miscellaneous income ...... 49 CFR 1152.11. This section prescribes 599 Subsidy payments from preexisting con- the branch line information required in tracts ...... conjunction with the system diagram maps specifying the line’s designation, Total attributable revenues ......

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(B) ON-BRANCH AVOIDABLE COSTS

Freight Material, Line item—(a) Salaries tools, sup- Purchased and plies, fuels, services— General— wages— and lubri- (d) (e) (b) cants—(c)

(1) Actual or apportioned expense accounts: Way and structures: Administration: 001 Track ...... 002 Bridge and Building ...... 003 Signal ...... 004 Communication ...... 005 Other ...... Repair and maintenance: 006 Roadway—Running ...... 007 Roadway—Switching ...... 008 Tunnels and Subways—Running ...... 009 Tunnels and Subways—Switching ...... 010 Bridges and Culverts—Running ...... 011 Bridges and Culverts—Switching ...... 012 Ties—Running ...... N/A ...... N/A N/A 013 Ties—Switching ...... N/A ...... N/A N/A 014 Rail—Running ...... N/A ...... N/A N/A 015 Rail—Switching ...... N/A ...... N/A N/A 016 Other Track Material—Running ...... N/A ...... N/A N/A 017 Other Track Material—Switching ...... N/A ...... N/A N/A 018 Ballast—Running ...... N/A ...... N/A N/A 019 Ballast—Switching ...... N/A ...... N/A N/A 020 Track Laying and Surfacing—Running ...... 021 Track Laying and Surfacing—Switching ...... 022 Road Property Damaged—Running ...... 023 Road Property Damaged—Switching ...... 024 Road Property Damaged—Other ...... 025 Signals and Interlockers—Running ...... 026 Signals and Interlockers—Switching ...... 027 Communications Systems ...... 028 Electric Power Systems ...... 029 Highway Grade Crossings—Running ...... 030 Highway Grade Crossings—Switching ...... 031 Station and Office Buildings ...... 032 Shop Buildings—Locomotives ...... 033 Shop Buildings—Freight Cars ...... 034 Shop Buildings—Other Equipment ...... 101 Locomotive Servicing Facilities ...... 102 Miscellaneous Buildings and Structures ...... 103 Coal Terminals ...... 104 Ore Terminals ...... 105 Other Marine Terminals ...... 106 TOFC/COFC—Terminals ...... 107 Motor Vehicle Loading and Distribution Facilities ...... 108 Facilities for Other Specialized Service Operations ...... 109 Roadway Machines ...... 110 Small Tools and Supplies ...... 111 Snow Removal ...... 112 Fringe Benefits—Running ...... N/A N/A N/A ...... 113 Fringe Benefits—Switching ...... N/A N/A N/A ...... 114 Fringe Benefits—Other ...... N/A N/A N/A ...... 115 Casualties and Insurance—Running ...... N/A N/A N/A ...... 116 Casualties and Insurance—Switching ...... N/A N/A N/A ...... 117 Casualties and Insurance—Other ...... N/A N/A N/A ...... 118 Lease Rentals—Debit—Running ...... N/A N/A ...... N/A 119 Lease Rentals—Debit—Switching ...... N/A N/A ...... N/A 120 Lease Rentals—Debit—Other ...... N/A N/A ...... N/A 121 Lease Rentals—(Credit)—Running ...... N/A N/A ...... N/A 122 Lease Rentals—(Credit)—Switching ...... N/A N/A ...... N/A 123 Lease Rentals—(Credit)—Other ...... N/A N/A ...... N/A 124 Joint Facility Rent—Debit—Running ...... N/A N/A ...... N/A 125 Joint Facility Rent—Debit—Switching ...... N/A N/A ...... N/A 126 Joint Facility Rent—Debit—Other ...... N/A N/A ...... N/A 127 Joint Facility Rent—(Credit)—Running ...... N/A N/A ...... N/A 128 Joint Facility Rent—(Credit)—Switching ...... N/A N/A ...... N/A 129 Joint Facility Rent—(Credit)—Other ...... N/A N/A ...... N/A 130 Other Rents—Debit—Running ...... N/A N/A ...... N/A

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(B) ON-BRANCH AVOIDABLE COSTS—Continued

Freight Material, Line item—(a) Salaries tools, sup- Purchased and plies, fuels, services— General— wages— and lubri- (d) (e) (b) cants—(c)

131 Other Rents—Debit—Switching ...... N/A N/A ...... N/A 132 Other Rents—Debit—Other ...... N/A N/A ...... N/A 133 Other Rents—(Credit)—Running ...... N/A N/A ...... N/A 134 Other Rents—(Credit)—Switching ...... N/A N/A ...... N/A 135 Other Rents—(Credit)—Other ...... N/A N/A ...... N/A 136 Depreciation—Running ...... N/A N/A N/A ...... 137 Depreciation—Switching ...... N/A N/A N/A ...... 138 Depreciation—Other ...... N/A N/A N/A ...... 139 Joint Facility—Debit—Running ...... N/A N/A ...... N/A 140 Joint Facility—Debit—Switching ...... N/A N/A ...... N/A 141 Joint Facility—Debit—Other ...... N/A N/A ...... N/A 142 Joint Facility—(Credit)—Running ...... N/A N/A ...... N/A 143 Joint Facility—(Credit)—Switching ...... N/A N/A ...... N/A 144 Joint Facility—(Credit)—Other ...... N/A N/A ...... N/A 145 Dismantling Retired Road Property—Running ...... 146 Dismantling Retired Road Property—Switching ...... 147 Dismantiling Retired Road Property—Other ...... 148 Other—Running ...... 149 Other—Swtiching ...... 150 Other—Other ...... 151 Total Way and Structures ...... Equipment: Locomotives: 201 Administration ...... 202 Repair and Maintenance ...... 203 Machinery Repair ...... 204 Equipment Damaged ...... 205 Fringe Benefits ...... N/A N/A N/A ...... 206 Other Casualties and Insurance ...... N/A N/A N/A ...... 207 Lease Rentals—Debit ...... N/A N/A ...... N/A 208 Lease Rentals—(Credit) ...... N/A N/A ...... N/A 209 Joint Facility Rent—Debit ...... N/A N/A ...... N/A 210 Joint Facility Rent—(Credit) ...... N/A N/A ...... N/A 211 Other Rents—Debit ...... N/A N/A ...... N/A 212 Other Rents—(Credit) ...... N/A N/A ...... N/A 213 Depreciation ...... N/A N/A N/A ...... 214 Joint Facility—Debit ...... N/A N/A ...... N/A 215 Joint Facility—(Credit) ...... N/A N/A ...... N/A 216 Repairs Billed to Others—(Credit) ...... N/A N/A ...... N/A 217 Dismantling Retired Property ...... 218 Other ...... 219 Total Locomotives ...... Freight cars: 220 Administration ...... 221 Repair and Maintenance ...... 222 Machinery Repair ...... 223 Equipment Damaged ...... 224 Fringe Benefits ...... N/A N/A N/A ...... 225 Other Casualties and Insurance ...... N/A N/A N/A ...... 226 Lease Rentals—Debit ...... N/A N/A ...... N/A 227 Lease Rentals—(Credit) ...... N/A N/A ...... N/A 228 Joint Facility Rent—Debit ...... N/A N/A ...... N/A 229 Joint Facility Rent—(Credit) ...... N/A N/A ...... N/A 230 Other Rents—Debit ...... N/A N/A ...... N/A 231 Other Rents—(Credit) ...... N/A N/A ...... N/A 232 Depreciation ...... N/A N/A N/A ...... 233 Joint Facility—Debit ...... N/A N/A ...... N/A 234 Joint Facility—(Credit) ...... N/A N/A ...... N/A 235 Repairs Billed to Others—(Credit) ...... N/A N/A ...... N/A 236 Dismantling Retired Property ...... 237 Other ...... 238 Total Freight Cars ...... Other Equipment: 301 Administration ...... Repair and Maintenance: 302 Trucks, Trailers, and Containers—Revenue Service ...... 303 Floating Equipment—Revenue Service ...... 304 Floating and Other Revenue Equipment ......

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(B) ON-BRANCH AVOIDABLE COSTS—Continued

Freight Material, Line item—(a) Salaries tools, sup- Purchased and plies, fuels, services— General— wages— and lubri- (d) (e) (b) cants—(c)

305 Computers and Data Processing Systems ...... 306 Machinery ...... 307 Work and Other Non-Revenue Equipment ...... 308 Equipment Damaged ...... 309 Fringe Benefits ...... N/A N/A N/A ...... 310 Other Casualties and Insurance ...... N/A N/A N/A ...... 311 Lease Rentals—Debit ...... N/A N/A ...... N/A 312 Lease Rentals—(Credit) ...... N/A N/A ...... N/A 313 Joint Facility Rent—Debit ...... N/A N/A ...... N/A 314 Joint Facility Rent—(Credit) ...... N/A N/A ...... N/A 315 Other Rents—Debit ...... N/A N/A ...... N/A 316 Other Rents—(Credit) ...... N/A N/A ...... N/A 317 Depreciation ...... N/A N/A N/A ...... 318 Joint Facility—Debit ...... N/A N/A ...... N/A 319 Joint Facility—(Credit) ...... N/A N/A ...... N/A 320 Repairs Billed to Others—(Credit) ...... 321 Dismantling Retired Property ...... 322 Other ...... 323 Total Other Equipment ...... 324 Total Equipment ...... Transportation: Train operations: 401 Administration ...... 402 Engine Crews ...... 403 Train Crews ...... 404 Dispatching Trains ...... 405 Operating Signals and Interlockers ...... 406 Operating Drawbridges ...... 407 Highway Crossing Protection ...... 408 Train Inspection and Lubrication ...... 409 Locomotive Fuel ...... 410 Electric Power Purchased or Produced for Motive Power ...... 411 Servicing Locomotives ...... 412 Freight Lost or Damaged—Solely Related ...... N/A N/A N/A ...... 413 Clearing Wrecks ...... 414 Fringe Benefits ...... N/A N/A N/A ...... 415 Other Casualties and Insurance ...... N/A N/A N/A ...... 416 Joint Facility—Debit ...... N/A N/A ...... N/A 417 Joint Facility—(Credit) ...... N/A N/A ...... NA 418 Other ...... 419 Total Train Operations ...... Yard Operations: 420 Administration ...... 421 Switch Crews ...... 422 Controlling Operations ...... 423 Yard and Terminal Clerical ...... 424 Operating Switches, Signals Retarders and Humps ...... 425 Locomotive Fuel ...... 426 Electric Power Purchased or Produced for Motive Power ...... 427 Servicing Locomotives ...... 428 Freight Lost or Damaged—Solely Related ...... N/A N/A N/A ...... 429 Clearing Wrecks ...... 430 Fringe Benefits ...... N/A N/A N/A ...... 431 Other Casualties and Insurance ...... N/A N/A N/A ...... 432 Joint Facility—Debit ...... N/A N/A ...... N/A 433 Joint Facility—(Credit) ...... N/A N/A ...... N/A 434 Other ...... 435 Total Yard Operations ...... Train and Yard Operations Common: 501 Cleaning Car Interiors ...... N/A 502 Adjusting and Transferring Loads ...... N/A 503 Car Loading Devices and Grain Doors ...... N/A 504 Freight Lost or Damaged—all other ...... N/A N/A N/A ...... 505 Fringe Benefits ...... N/A N/A N/A ...... 506 Total Train and Yard Operations Common ...... Specialized Service Operations: 507 Administration ...... 508 Pickup and Delivery and Marine Line Haul ......

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(B) ON-BRANCH AVOIDABLE COSTS—Continued

Freight Material, Line item—(a) Salaries tools, sup- Purchased and plies, fuels, services— General— wages— and lubri- (d) (e) (b) cants—(c)

509 Loading and Unloading and Local Marine ...... 510 Protection Services ...... 511 Freight Lost or Damaged—Solely Related ...... N/A N/A N/A ...... 512 Fringe Benefits ...... N/A N/A N/A ...... 513 Casualties and Insurance ...... N/A N/A N/A ...... 514 Joint Facility—Debit ...... N/A N/A ...... N/A 515 Joint Facility—(Credit) ...... N/A N/A ...... N/A 516 Other ...... 517 Total Specialized Services Operations ...... Administrative Support Operations: 518 Administration ...... 519 Employees Performing Clerical and Accounting Functions ...... 520 Communication Systems Operation ...... 521 Loss and Damage Claims Processing ...... 522 Fringe Benefits ...... N/A N/A N/A ...... 523 Casualties and Insurance ...... N/A N/A N/A ...... 524 Joint Facility—Debit ...... N/A N/A ...... N/A 525 Joint Facility—(Credit) ...... N/A N/A ...... N/A 526 Other ...... 527 Total Administrative Support Operations ...... 528 Total transportation ...... General and Administrative: 601 Officers—General Administration ...... 602 Accounting, Auditing and Finance ...... 603 Management Services and Data Processing ...... 604 Marketing ...... 605 Sales ...... 606 Industrial Development ...... 607 Personnel and Labor Relations ...... 608 Legal and Secretarial ...... 609 Public Relations and Advertising ...... 610 Research and Development ...... 611 Fringe Benefits ...... N/A N/A N/A ...... 612 Casualties and Insurance ...... N/A N/A N/A ...... 613 Writedown of Uncollectible Accounts ...... N/A N/A N/A ...... 614 Property Taxes ...... N/A N/A N/A ...... 615 Other Taxes Except on Corporate Income or Payrolls ...... N/A N/A N/A ...... 616 Joint Facility—Debit ...... N/A N/A ...... N/A 617 Joint Facility—(Credit) ...... N/A N/A ...... N/A 618 Other ...... 619 Total General and Administrative ...... 620 Total Carrier Operating Expenses ......

Amount

(2) Other Computed Cost Elements: 651 Locomotives return on investment ...... 652 Freight train car costs ...... 01 Per day costs ...... 02 Mileage costs ...... 654 Rehabilitation ...... 664 Deadheading, taxi and hotel costs ...... 01 Deadheading ...... 02 Taxi ...... 03 Hotel ...... 665 Overhead movement costs ...... 01 Transportation ...... 02 Equipment ...... 03 Freight train cars—mileage portion ...... Total Computed On-Branch Costs ...... (3) Off-Branch Avoidable Costs: 661 Terminal Costs ...... 01 Modified terminal costs ...... 02 Normal terminal costs ...... 03 Interchange costs ...... 662 Freight train car costs ......

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Amount

663 Freight train revenue ton-mile costs ...... Total Off-Branch Avoidable Costs ...... (4) All Other Avoidable Costs: 671 Working capital ...... 672 Required capital expenditures ...... 673 Deferred maintenance ...... 674 Current cost of freight train cars, locomotives, and other equipment ...... 675 Foregone tax benefits ...... 676 Administrative costs ...... 677 Deferred subsidy payment costs ...... 678 Casualty reserve expenses ...... Total, all other avoidable costs ...... 681 Reasonable return on the value of property ...... 682 Management fee ...... (5) Total of avoidable costs, reasonable return and management fee ...... $

Direct on- Overhead branch movement

(1) On-Branch Service Units—Freight-Car Accounts: 821 Freight train car miles (loaded and empty): 01 Box—Plain 40 foot ...... 02 Box—Plain 50 foot or longer ...... 03 Box—Equipped ...... 04 Gondola—Plain ...... 05 Gondola—Equipped ...... 06 Hopper—Covered ...... 07 Hopper—Open top—General Service ...... 08 Hopper—Open top—Special Service ...... 09 Refrigerator—Mechanical ...... 10 Refrigerator—Nonmechanical ...... 11 Flat—TOFC/COFC ...... 12 Flat—Multi-level ...... 13 Flat—General Service ...... 14 Flat—Other ...... 15 All other cars ...... 823 Freight-train Car-days (loaded and empty): 01 Box—Plain 40 foot ...... 02 Box—Plain 50 foot or longer ...... 03 Box—Equipped ...... 04 Gondola—Plain ...... 05 Gondola—Equipped ...... 06 Hopper—Covered ...... 07 Hopper—Open top—General Service ...... 08 Hopper—Open top—Special Service ...... 09 Refrigerator—Mechanical ...... 10 Refrigerator—Nonmechanical ...... 11 Flat—TOFC/COFC ...... 12 Flat—Multi-level ...... 13 Flat—General Service ...... 14 Flat—Other ...... 15 All other cars ......

Total off- Overhead Net off- branch movement branch

Locomotive-Mile Accounts 813 Road locomotive unit miles ...... 841 Road diesel locomotive gross ton-miles ...... 842 Road electric locomotive gross ton-miles ...... Locomotive Unit Hour Accounts 832 Road locomotive unit hours ...... 833 Road diesel locomotive unit hours ...... 834 Road electric locomotive unit hours ...... 835 Yard locomotive unit hours ...... 836 Yard diesel locomotive unit hours ...... 837 Yard electric locomotive unit hours ...... Rented or Leased Equipment 851 Freight train car-days ...... 852 Floating equipment car-days ......

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Total off- Overhead Net off- branch movement branch

855 Locomotive days ...... Train hours 861 Train hours ......

Total off- Overhead Net off- branch movement branch

(2) Off-Branch Service Units—Car-Mile Accounts: 822 Freight train loaded car-miles by car type: 01 Box—General service—unequipped ...... 02 Box—General service—equipped ...... 03 Box—Special service ...... 04 Gondola—General service ...... 05 Gondola—Special service ...... 06 Hopper—open—General service ...... 07 Hopper—open—Special service ...... 08 Hopper—covered ...... 09 Stock ...... 10 Flat—General service ...... 11 Flat—Special service ...... 12 Flat—TOFC ...... 13 Autorack ...... 14 Refrigerator—Meat mechanical ...... 15 Refrigerator—Other mechanical ...... 16 Refrigerator—Meat nonmechanical ...... 17 Refrigerator—Other nonmechanical ...... 18 Tank 9,999 gallons and under ...... 19 Tank 10,000–18,999 gal ...... 20 Tank 19,000–21,999 gal ...... 21 Tank 22,000–27,999 gal ...... 22 Tank 28,000–31,999 gal ...... 23 Tank 32,000 and over ...... 24 All other ...... Ton-Mile Accounts 831 Revenue ton-miles ......

[43 FR 1733, Jan. 11, 1978, as amended at 43 FR 28498, June 30, 1978; 44 FR 9730, Feb. 14, 1979]

950 Text and chart of accounts. (4) Amounts determined to be This section defines each account uncollectible shall be accounted for in outlined in the format shown under accordance with the text of account 63– 61–00, ‘‘General—Uncollectible ac- section 940 of these regulations. counts.’’ (a) Attributable revenues—101 Freight. (1) This account shall include revenue ITEMS TO BE CREDITED from the transportation of freight and (a) Revenue upon the basis of local freight from transit, stop, and recognizing tariff rates, regardless of class of train in privileges, upon the basis of lawful tar- which the freight is transported. iff rates. (b) The carrier’s proportion of revenue (2) This account shall include collec- upon the basis of through freight tariff rates, tions in excess of tariff charges, except regardless of class of train in which the where such amounts are segregated and freight is transported. held subject to refund. (c) Revenue from transportation of mail matter, and empty mail pouches, at freight (3) Proceeds derived from the sale of rates. unclaimed and refused freight which (d) Revenue from transportation of freight has been transported in accordance on special trains at rates based on weights of with the contract of shipment shall be shipments. credited to this account in cases where (e) Revenue on basis of classifications and such items can be readily identified. freight tariffs from transportation of care- Uncollectible tariff charges on such takers of freight shipments. (f) Revenue from reconsigning privileges. shipments shall be charged to this ac- (g) Revenue from stop privileges. count. (h) Revenue from transit privileges.

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(i) Revenue upon the basis of arbitraries joint arrangement, it shall include the entire out of freight, rates for water transfers compensation in its revenue and statistics, (ferriage, lighterage, and floatage). charging the appropriate joint facility ex- (j) Revenue from transportation of trailers pense and rental accounts with the amounts and containers on flat cars in TOFC/COFC paid the lessor company, and the lessor com- service upon the basis of all-rail line-haul pany shall credit the corresponding ac- freight tariff rates and under arrangements counts. for motor carrier-railroad joint haul, and NOTE D: Revenue from the transportation from the loading and unloading of trailers of caretakers of freight shipments, when not and containers on and from flat cars upon included as a part of the freight charges on the basis of tariff rates and under arrange- the waybill covering the freight shipments, ments for motor carrier-railroad joint haul. shall be credited to account 102, ‘‘Pas- senger.’’ ITEMS TO BE CHARGED NOTE E: This account shall be maintained (a) Amounts paid as bridge and ferry so as to show separately payments and al- arbitraries on freight. lowances for (a) terminal collection and de- (b) Amounts paid for completing a haul. livery services when performed in connection (c) Amounts paid for elevation of freight. with line-haul transportation of freight on (d) Amounts paid for switching services, in the basis of freight tariff rates, further separated between (1) TOFC/COFC service, and (2) connection with the transportation of all other freight service; also (b) payments freight, on the basis of switching tariffs, and for switching services when performed in allowances out of through rates, including connection with line-haul transportation of amounts paid for switching empty cars in freight on the basis of switching tariffs and connection with a freight revenue move- allowances out of freight rates, including the ment. switching of empty cars in connection with a (e) Amounts paid for transferring freight revenue movement, and (c) payments on between stations. basis of tariff rates for loading and unloading (f) Arbitraries and allowances to others for livestock. lighterage and wharfage. (g) The carrier’s proportion of overcharges 104 Switching. (1) This account shall resulting from the use of erroneous rates, include the revenue from switching weights, classifications or computations. service upon the basis of lawful tariff (h) The carrier’s proportion of refunds on rates. To this account shall be credited account of errors in routing and billing. the carrier’s revenue upon the basis of (i) The carrier’s proportion of uncollected tariff rates, or the carrier’s allowance revenue on freight lost or destroyed in tran- out of through rates, from the switch- sit. ing of cars of all kinds, loaded or (j) The carrier’s proportion of uncollected tariff charges on damaged shipments for empty, either locally at a station or which charges neither shipper nor consignee within a switching district, between is liable. connecting lines, between local indus- (k) Amounts paid on basis of tariff rates tries, or between connecting lines and for loading and unloading livestock. local industries; revenue upon the basis (l) Amounts paid to motor truck compa- of distinct tariff rates for ‘‘trapcar’’ nies for hauling trailers and containers to and ‘‘ferry-car’’ service and for spot- and from TOFC/COFC terminals, and allow- ting cars; also the revenue from ances to shippers who perform such service on the basis of tariff rates. interwork switching at industrial plants, and the revenue from ‘‘penalty NOTE A: Amounts paid for switching empty cars other than in connection with loaded switching’’ incident to the improper movements shall be charged to operating ex- delivery of cars by other carriers. pense account 61–32–XX, ‘‘General—Other (2) To this account shall be charged Expenses—Transportation, Yard, Freight,’’ amounts paid for switching when such except that amounts paid for switching switching service is provided for in the equipment for repairs shall be included in switching rate charged by the carrier. the appropriate equipment repair accounts. NOTE: ‘‘Penalty switching’’ charges paid by NOTE B: Other carriers’ proportion of rev- the carrier shall be included in expense ac- enue and of uncollectible undercharges paid count 61–32–XX, ‘‘General—Other Expenses— by the carrier on account of its errors in Transportation, Yard, Freight.’’ routing and billing shall be charged to oper- 105 Water transfers. (1) This account ating expense account 61–35–76, ‘‘General— shall include the revenue, from the Other Expenses—Transportation, Adminis- trative Support.’’ transfer by water (ferriage, lighterage, NOTE C: When a lessee company transports and floatage), of passenger, freight, ve- freight over the tracks of another carrier on hicles, and livestock, upon the basis of the basis of a proportion of revenues under a lawful local tariff rates.

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(2) This account also shall include 121 Joint facility, credit. This account revenue from water transfers of other shall include the carrier’s proportion of traffic, such as the revenue from tow- revenue collected by others in connec- ing beyond lighterage limits and all tion with the operation of joint tracks, other towing for which an extra charge yards, terminals, and other facilities, is made; insurance of freight afloat including revenue from hotels, res- when billed out at other than cost; taurants, grain elevators, sale of storage of freight afloat; grain overage power, and other miscellaneous oper- in boats; pumping performed for out- ations. side parties; and for other similar NOTE A: The purpose of this account is to sources. show the amounts of revenue from the oper- (3) To this account shall be charged ation of joint tracks, yards, terminals and amounts payable to other companies or other facilities operated by other companies, individuals for extra lighterage, extra which under existing contracts or agree- towing, and for all other service when ments are credited by the operating com- such payments represent revenue col- pany to the tenant companies which partici- lected and credited to this account and pate therein. The bill rendered by any cred- not a directed expense. itor company against a debtor company for the latter’s proportion of the expense of NOTE: No revenue shall be included in this maintenance and operation of joint facili- account for water transfers of passengers or ties, which includes also a credit covering a shipments upon the basis of arbitraries out proportion of the revenue to be paid over, of rates for transportation involving rail line shall show the distribution of the credit for haul. such proportion of the revenue separately 106 Demurrage. This account shall in- from the distribution of the expense of oper- clude the revenue from the detention of ation. cars incident to loading, unloading, re- NOTE B: No credits shall be made to this consigning, and stops in transit upon account representing amounts creditable by the basis of lawful tariffs for demur- the operating company to primary accounts rage. This account shall also include 101–103, 105, and 110. the revenue from the detention of trail- 122 Joint facility, debit. This account ers and containers used in TOFC/COFC shall include that proportion of rev- service, incident to loading and unload- enue from the operation of joint ing, upon the basis of tariff rates. tracks, yards, terminals, and other fa- NOTE: This account shall be maintained so cilities, which is creditable to other as to reflect separately (1) revenue from de- companies, including revenue from ho- tention of cars, and (2) revenue from deten- tels, restaurants, grain elevators, sale tion of trailers and containers used in TOFC/ of power, and other miscellaneous oper- COFC service. ations. 110 Incidental. This account is designed to show the amounts which the NOTE A: The purpose of this account is to carrier becomes entitled to receive show the amount of revenue from operation from services rendered incidentally of a terminal company or other carrier with rail-line and water-line transpor- which, under the terms of existing contracts or agreements covering the joint use of tation; for the use of facilities of which tracks, yards, and other facilities, is credited the expenses for operation and mainte- to other carriers that participate in the ben- nance are not separable from railway efits from such joint use. The bill rendered expenses and from incidental sources by a creditor company against a debtor com- not provided for elsewhere. Among the pany for the latter’s proportion of expense of items included in this account are rev- maintaining and operating joint facilities, enues derived from (1) hotels and res- which includes a credit covering the debtor taurants, (2) operations conducted at company’s proportion of the revenues from stations and on trains by individual or operation of such joint facilities, shall indi- companies other than railway compa- cate separately the proper distribution of both the revenues and the expenses included nies, (3) storage, (4) the sale of electric in the bill, and such distribution shall be ad- power, (5) renting property operated hered to the debtor. and maintained in connection with the NOTE B: No debits shall be made to this ac- property used in the carrier’s transpor- count representing amounts creditable by tation operations and from railway op- the operating company to primary accounts erations not provided for elsewhere. 101–103, 105, and 110.

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OTHER INCOME ACCOUNTS credited to account 570 ‘‘Extraordinary Items,’’ upon approval by the Commis- 506 Revenues from property used in sion; however, gains from extinguish- other than carrier operations. This ac- ment of debt (excluding debt maturing count shall include the total revenues serially), which is made to satisfy sink- derived from property used in other ing fund requirements, shall be re- than carrier operations, the cost of corded in this account regardless of which is includible in balance-sheet ac- amount. count 737, ‘‘Property used in other than 599 Subsidy payments from preexisting carrier operations.’’ contracts. This account shall include all 510 Miscellaneous rent income. (1) This payments made to the operating car- account shall include such rents of rier of a subsidized line that (1) existed property owned and controlled by the prior to the commencement of oper- accounting carrier as are not provided ations under a subsidy operating agree- for in the foregoing accounts. ment and (2) would cease if freight (2) This account shall be charged service on the line were discontinued. with the cost of maintenance of the (b) On-branch avoidable cost—(1) Ac- property rented, also specific inci- tual and apportioned expense accounts. dental expenses in connection with such property, such as the cost of nego- PERSONNEL tiating contracts, advertising for ten- Control ...... 10–00–00 ants, fees paid conveyancers, collec- This account may be used as a control ac- tors’ commissions, and analogous count for all accounts in the PERSONNEL items. Series: Salaries and Wages; Fringe Benefits NOTE A: If property the rent of which is Not Included in Compensation. chargeable to account 543—‘‘Miscellaneous Salaries and Wages—Control. This control rents,’’ is sublet by the accounting company, account includes the compensation payable the rent receivable therefore shall be cred- to employees for services performed. It in- ited to this account. cludes amounts payable in connection with NOTE B: Taxes on property the rent of profit sharing and stock option plans that which is creditable to this account shall be are part of employee compensation. This charged to account 553—‘‘Taxes on property control account also includes amounts of used in other than carrier operations.’’ compensation payable to employees for paid NOTE C: The rent from property carried in time off as a fringe benefit: vacation pay, balance-sheet account 737—‘‘Property used holiday pay, sick pay, and other payments in other than carrier operations,’’ shall not considered direct compensation for time not be included in this account, but in account worked. Amounts of labor billed by contrac- 506—‘‘Revenues from property used in other tors, other companies, and joint facilities, than carrier operations.’’ are not considered salaries and wages of the NOTE D: Rent and other income from real carrier company and are not to be included estate acquired for new lines or for additions in this account group. Its components shall and betterments shall be credited to the ap- be distributed to the following accounts in propriate road and equipment accounts until accordance with instruction 1–14 of Part 1201, the completion or coming into service of the Subpart A: property. Salaries and wages—way and structures—run- 519 Miscellaneous income. (1) This ac- ning: Freight ...... 11–11–XX count shall include all items, not pro- This account includes the compensation vided for elsewhere, properly creditable payable to all repair and maintenance em- to income accounts during the current ployees and others who are associated with year. Among the items which shall be the repair and maintenance of the carrier’s included in this account are: roadway and track on the line of road and (i) Cancellation of balance sheet ac- outside of classification yards. Compensa- counts representing unclaimed wages tion payable to officers and technical and clerical employees shall only be assigned to and vouchered accounts written off be- Way and Structures—Other. This account cause of carrier’s inability to locate shall be subdivided by the following func- the creditor. tions: (ii) Profit from sale of land used for Repair and maintenance transportation purposes, of noncarrier Roadway ...... 11–11–10 property and of securities acquired for Tunnels and subways ...... 11–11–11 investment purposes. Bridges and culverts ...... 11–11–12 Track laying and surfacing ...... 11–11–17 (2) Gains for extinguishment of debt Signals and interlockers ...... 11–11–19 shall be aggregated and, if material, Highway grade crossings ...... 11–11–22

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Dismantling retired property ...... 11–11–39 ical employees, repair and maintenance em- Road property and equipment damaged ...... 11–11–48 ployees, and others who are associated with Other—other ...... 11–11–99 the repair and maintenance of locomotives, Salaries and wages—way and structures— whether owned by the carrier or by others. switching: Freight ...... 11–12–XX This account shall be subdivided by the fol- This account includes the compensation lowing functions: payable to all repair and maintenance em- Administration—general ...... 11–21–01 ployees and others who are associated with Repair and maintenance the repair and maintenance of the carrier’s Dismantling retired property ...... 11–21–39 roadway and track within classification Shop machinery ...... 11–21–40 yards and stations. Compensation payable to Locomotives ...... 11–21–41 officers and technical and clerical employees Road property and equipment damaged ...... 11–21–48 shall be assigned to Way and Structures— Other—other ...... 11–21–99 Other. This account shall be subdivided by Salaries and Wages—Equipment—Freight the following functions: Cars: Freight ...... 11–22–XX Repair and maintenance This account includes the compensation Roadway ...... 11–12–10 payable to all officers, technical and clerical Tunnels and subways ...... 11–12–11 employees, repair and maintenance employ- Bridges and culverts ...... 11–12–12 ees, and others, who are associated with the Track laying and surfacing ...... 11–12–17 repair and maintenance of freight cars, Signals and interlockers ...... 11–12–19 whether owned by the carrier or by others. Highway grade crossings ...... 11–12–22 Dismantling retired property ...... 11–12–39 This account shall be subdivided by the fol- Road property and equipment damaged ...... 11–12–48 lowing functions: Other—other ...... 11–12–99 Administration—general ...... 11–22–01 Salaries and wages—way and structures— Repair and maintenance other: Freight ...... 11–13–XX Dismantling retired property ...... 11–22–39 This account includes the compensation Shop machinery ...... 11–22–40 payable to all repair and maintenance em- Freight cars ...... 11–22–42 ployees and others who are associated with Road property and equipment damaged ...... 11–22–48 the repair and maintenance of the carrier’s Other—other ...... 11–22–99 Salaries and wages—equipment—other equip- structures other than roadway and track. ment: Freight ...... 11–23–XX Each administration account (functions 02– 06) includes the compensation payable to all This account includes the compensation officers and technical and clerical employees payable to all officers, technical and clerical associated with the Way and Structures Ac- employees, repair and maintenance employ- tivity. This account shall be subdivided by ees, and others, who are associated with the the following functions: repair and maintenance of equipment other Administration than locomotives and freight cars, whether owned by the carrier or by others. This ac- Track ...... 11–13–02 Bridges and buildings ...... 11–13–03 count shall be subdivided by the following Signals ...... 11–13–04 functions: Communications ...... 11–13–05 Administration—general ...... 11–23–01 Other ...... 11–13–06 Repair and maintenance Repair and maintenance Dismantling retired property ...... 11–23–39 Communication systems ...... 11–13–20 Shop machinery ...... 11–23–40 Electric power systems ...... 11–13–21 Trucks, trailers, containers in revenue service .. 11–23–43 Station and office buildings ...... 11–13–23 Floating equipment—revenue service ...... 11–23–44 Shop buildings—locomotives ...... 11–13–24 Passenger and other revenue equipment ...... 11–23–45 Shop buildings—freight cars ...... 11–13–25 Computers and data processing equipment ..... 11–23–46 Shop buildings—other ...... 11–13–26 Work and other non-revenue equipment ...... 11–23–47 Locomotive servicing facilities ...... 11–13–27 Road property and equipment damaged ...... 11–23–48 Miscellaneous buildings and structures ...... 11–13–28 Other—other ...... 11–23–99 Coal terminals ...... 11–13–29 Salaries and wages—transportation—train: Ore terminals ...... 11–13–30 Freight ...... 11–31–XX TOFC/COFC terminals ...... 11–13–31 Other marine terminals ...... 11–13–32 This account includes the compensation Motor vehicle loading and distribution facilities 11–13–33 payable to all officers, technical and clerical Facilities for other specialized services oper- employees, engine and train crews, and other ations ...... 11–13–35 operational employees, who are associated Roadway machines ...... 11–13–36 with the dispatching and operation of freight Small tools and supplies ...... 11–13–37 Snow removal ...... 11–13–38 trains over the roadway and outside of clas- Dismantling retired property ...... 11–13–39 sification yards. This account shall be sub- Road property and equipment damaged ...... 11–13–48 divided by the following functions: Other—other ...... 11–13–99 Administration—general ...... 11–31–01 Salaries and wages—equipment—locomotives: Operations Freight ...... 11–21–XX Engine crews ...... 11–31–56 This account includes the compensation Train crews ...... 11–31–57 payable to all officers and technical and cler- Dispatching trains ...... 11–31–58 150

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Operating switches, signals, interlockers, re- This account includes the compensation tarders, humps ...... 11–31–59 payable to all officers, technical and clerical Operating drawbridges ...... 11–31–60 employees, engine and train crews, and other Highway crossing protection ...... 11–31–61 operational employees, who are associated Train inspection and lubrication ...... 11–31–62 with providing direct administrative support Clearing wrecks ...... 11–31–63 for the Transportation Activity. For further Locomotive fuel ...... 11–31–67 Electric power purchased/produced for motive clarification refer to the definition of the power ...... 11–31–68 Administrative Support Operations Sub- Servicing locomotives ...... 11–31–69 activity contained in Part 1201, Subpart A. Other—other ...... 11–31–99 This account shall be subdivided by the fol- Salaries and wages—transportation—yard: lowing functions: Freight ...... 11–32–XX Administration—general ...... 11–35–01 This account includes the compensation Operations payable to all officers, technical and clerical Clerical and accounting employees ...... 11–35–76 employees, engine and train crews, and other Communication systems operations ...... 11–35–77 operational employees, who are associated Loss and damage claims processing ...... 11–35–78 with the movement of freight cars within Other—other ...... 11–35–99 classification yards and in terminal switch- Salaries and wages—general and administra- ing and transfer service. This account shall tive: Freight ...... 11–61–XX be subdivided by the following functions: This account includes the compensation Administration—general ...... 11–32–01 payable to all employees who are associated Operations with overall administration or other general Operating switches, signals, interlockers, re- support for carrier operations. Overall ad- tarders, humps ...... 11–32–59 ministration includes executive, legal, finan- Clearing wrecks ...... 11–32–63 cial, treasury, accounting, budgeting, tax- Switch crews ...... 11–32–64 ation, corporate planning, costing, mar- Controlling operations ...... 11–32–65 keting, advertising, traffic, corporate sec- Yard and terminal clerical ...... 11–32–66 retary, public relations, real estate, insur- Locomotive fuel ...... 11–32–67 Electrical power purchased/produced for mo- ance administration, personnel administrative power ...... 11–32–68 tion, pension plan administration, general Servicing locomotives ...... 11–32–69 purchasing, labor relations, internal audit- Other—other ...... 11–32–99 ing, industrial engineering, and regulatory Salaries and wages—transportation—train and reporting. For further clarification refer to yard common: Freight ...... 11–33–XX the definition of the General and Adminis- This account includes the compensation trative Activity contained in Part 1201, Sub- payable to all officers, technical and clerical part A. This account shall be subdivided by employees, engine and train crews, and other the following functions: operational employees performing functions Administration—general ...... 11–61–01 incurred on behalf of both train and yard op- General erations. This account shall be subdivided by Accounting, auditing, finance ...... 11–61–86 the following functions: Management services and data processing ...... 11–61–87 Operations ...... Marketing ...... 11–61–88 Cleaning car interiors ...... 11–33–70 Sales ...... 11–61–89 Adjusting and transferring loads ...... 11–33–71 Industrial development ...... 11–61–90 Car loading devices and grain doors ...... 11–33–72 Personnel and labor relations ...... 11–61–91 Salaries and wages—transportation—special- Legal and secretarial ...... 11–61–92 ized services: Freight ...... 11–34–XX Public relations and advertising ...... 11–61–93 Research and development ...... 11–61–94 This account includes the compensation Other—other ...... 11–61–99 payable to all officers, technical and clerical Fringe benefits not included in compensation— employees, engine and train crews, and other control ...... 12–00–00 operational employees who are associated This control account includes amounts with operating services which are specialized payable to others, or other costs charged to in nature and in cost characteristics. The expense, for employee benefits which are not specialized services designated by the Board considered part of direct compensation. appear within the definition of specialized These benefits include the carrier portions of services. This account shall be subdivided by Railroad Retirement contributions, pension the following functions: expense, unemployment taxes, dental plans, Administration—general ...... 11–34–01 health plans, hospitalization insurance, life Operations insurance, subsidies for employee Pickup and delivery, marine line haul, and rail lunchrooms, company entertainment facili- substitute service ...... 11–34–73 ties for personal use, and other benefits to Loading, unloading, and local marine ...... 11–34–74 employees that are not includable in direct Protective service ...... 11–34–75 compensation. They exclude travel expense Other—other ...... 11–34–99 Salaries and wages—transportation—adminis- on company business, casualties, workmen’s trative support: Freight ...... 11–35–XX compensation, as well as dues, memberships, 151

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and similar items when the direct bene- This account includes the amounts payable ficiary is clearly the company rather than to others, or other costs charged to expense, the employee for employee benefits which are not consid- Fringe benefits not included in compensation— ered part of direct compensation for employ- way and structures—running: Freight ...... 12–11–00 ees who are associated with the dispatching and operating of freight trains over the road- This account includes amounts payable to way and outside of classification yards. others, or other costs charged to expense, for employee benefits which are not considered Fringe benefits not included in compensation— transportation—yard: Freight ...... 12–32–00 part of direct compensation for employees who are associated with the repair and main- This account includes the amounts payable tenance of the carrier’s roadway and track to others, or other costs charged to expense, on the line of road and outside of classifica- for employee benefits which are not consid- tion yards. ered part of direct compensation for employ- Fringe benefits not included in compensation— ees who are associated with the movement of way and structures—switching: Freight ...... 12–12–00 freight cars within classification yards and in terminal switching and transfer service. This account includes amounts payable to others, or other costs charged to expense, for Fringe benefits not included in compensation— transportation—train and yard Common: employee benefits which are not considered Freight ...... 12–33–00 part of direct compensation for employees who are associated with repair and mainte- This account includes the amounts payable nance of the carrier’s roadway and track to others, or other costs charged to expense, within classification yards and stations. for employee benefits which are not considered part of direct compensation for employ- Fringe benefits not included in compensation— way and structures—other: Freight ...... 12–13–00 ees performing functions incurred on behalf of both train and yard operations. This account includes amounts payable to Fringe benefits not included in compensation— others, or other costs charged to expense, for transportation—specialized services: Freight 12–34–00 employee benefits which are not considered part of direct compensation for employees This account includes the amounts payable who are associated with the repair and main- to others, or other costs charged to expense, tenance of the carrier’s structures other for employee benefits which are not consid- than roadway and track, and who are associ- ered part of direct compensation for employ- ated with the Administration of the Way and ees who are associated with operating serv- Structures Activity. ices which are specialized in nature and in cost characteristics. The specialized services Fringe benefits not included in compensation— equipment—locomotives: Freight ...... 12–21–00 designated by the Board appear within the definition of specialized services. This account includes amounts payable to Fringe benefits not included in compensation— others, or other costs charged to expense, for transportation—administrative support: employee benefits which are not considered Freight ...... 12–35–00 part of direct compensation for employees who are associated with the repair and main- This account includes the amounts payable tenance of locomotives, whether owned by to others, or other costs charged to expense, the carrier or by others. for employee benefits which are not considered part of direct compensation for employ- Fringe benefits not included in compensation— ees who are associated with providing direct equipment—freight cars: Freight ...... 12–22–00 administrative support for the Transpor- This account includes amounts payable to tation Activity. For further clarification others, or other costs charged to expense, for refer to the definition of the Administrative employee benefits which are not considered Support Operations Subactivity contained in part of direct compensation for employees Part 1201, Subpart A. who are associated with the repair and main- Fringe benefits not included in compensation— tenance of freight cars, whether owned by general and administrative: Freight ...... 12–61–00 the carrier or by others. This account includes the amounts payable Fringe benefits not included in compensation— to others, or other costs charged to expense, equipment—other equipment: ...... 12–23–00 for employee benefits which are not consid- This account includes the amounts payable ered part of direct compensation for employ- to others, or other costs charged to expense, ees who provide overall administration or for employee benefits which are not consid- other general support for carrier operations. ered part of direct compensation for employ- Overall administration includes executive, ees who are associated with the repair and legal, financial, treasury, accounting, budg- maintenance of equipment other than loco- eting, taxation, corporate planning, costing, motives and freight cars, whether owned by marketing, advertising, traffic, corporate the carrier or by others. secretary, public relations, real estate, in- Fringe benefits not included in compensation— surance administration, personnel adminis- transportation—train: Freight ...... 12–31–00 tration, pension plan administration, general

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purchasing, labor relations, internal audit- charges to expense for all materials, small ing, industrial engineering, and regulatory tools, supplies, fuels, lubricants, purchased reporting. For further clarification refer to standard stationery and forms, freight-in on the definition of the General and Adminis- materials and supplies, and similar items. Its trative Activity contained in Part 1201, Sub- components shall be distributed to the fol- part A. lowing functions in accordance with instruction 1–8 of Part 1201, Subpart A: MATERIEL Repair and maintenance Control ...... 20–00–00 Roadway ...... 21–12–10 This account may be used as a control ac- Tunnels and subways ...... 21–12–11 Bridges and culverts ...... 21–12–12 count for the MATERIEL series: Materials, Ties ...... 21–12–13 Tools, Supplies, Fuels, Lubricants. Rails ...... 21–12–14 Materials, tools, supplies, fuels, lubricants— Other track material ...... 21–12–15 Control ...... 21–00–00 Ballast ...... 21–12–16 Track laying and surfacing ...... 21–12–17 This account group includes the cost of Signals and interlockers ...... 21–12–19 items installed or commodities consumed Highway grade crossings ...... 21–12–22 which are charged to expense in connection Dismantling retired property ...... 21–12–39 with carrier operations. This account in- Road property and equipment damaged ...... 21–12–48 cludes charges to expense for all materials, Other—other ...... 21–12–99 Materials, tools, supplies, fuels, lubricants— small tools, supplies, fuels, lubricants, pur- way and structures—other: Freight ...... 21–13–XX chased standard stationery and forms, freight-in on materials and supplies, and This account includes the cost of items in- similar items. This account excludes pur- stalled or commodities consumed which are chased services such as utilities, commu- charged to expense, where such items are nications, postage and other items of similar consumed in the performance or support of nature. the repair and maintenance of the carrier’s Materials, tools, supplies, fuels, lubricants— structures not provided for in running or way and structures—Running: Freight ...... 21–11–XX switching. This account includes charges to expense for all materials, small tools, sup- This account includes the cost of items in- plies, fuels, lubricants, purchased standard stalled or commodities consumed which are stationery and forms, freight-in on materials charged to expense, where such items are and supplies, and similar items. Its compo- consumed in the performance or support of nents shall be distributed to the following the repair and maintenance of the carrier’s functions in accordance with instruction 1–8 roadway and track on the line of the road of Part 1201, Subpart A: and outside of classification yards. This ac- Administration count includes charges to expense for all materials, small tools, supplies, fuels, lubri- Track ...... 21–13–02 Bridges and buildings ...... 21–13–03 cants, purchased standard stationery and Signals ...... 21–13–04 forms, freight-in on materials, and supplies, Communications ...... 21–13–05 and similar items. Its components shall be Other ...... 21–13–06 distributed to the following functions in ac- Repair and maintenance cordance with instruction 1–8 of Part 1201, Communication systems ...... 21–13–20 Subpart A: Electric power systems ...... 21–13–21 Repair and maintenance Station and office buildings ...... 21–13–23 Shop buildings—locomotives ...... 21–13–24 Roadway ...... 21–11–10 Shop buildings—freight cars ...... 21–13–25 Tunnels and subways ...... 21–11–11 Shop buildings—other equipment ...... 21–13–26 Bridges and culverts ...... 21–11–12 Locomotive servicing facilities ...... 21–13–27 Ties ...... 21–11–13 Miscellaneous buildings and structures ...... 21–13–28 Rails ...... 21–11–14 Coal terminals ...... 21–13–29 Other track material ...... 21–11–15 Ore terminals ...... 21–13–30 Ballast ...... 21–11–16 TOFC/COFC terminals ...... 21–13–31 Track laying and surfacing ...... 21–11–17 Other marine terminals ...... 21–13–32 Signals and interlockers ...... 21–11–19 Motor vehicle loading and distribution facilities 21–13–33 Highway grade crossings ...... 21–11–22 Facilities for other specialized services oper- Dismantling retired property ...... 21–11–39 ations ...... 21–13–35 Road property and equipment damaged ...... 21–11–48 Roadway machines ...... 21–13–36 Other—other ...... 21–11–99 Small tools and supplies ...... 21–13–37 Materials, tools, supplies, fuels, lubricants— Snow removal ...... 21–13–38 way and structures—switching: Freight ...... 21–12–XX Dismantling retired property ...... 21–13–39 This account includes the cost of items in- Road property and equipment damaged ...... 21–13–48 stalled or commodities consumed which are Other—other ...... 21–13–99 charged to expense, where such items are Materials, tools, supplies, fuels, lubricants— consumed in the performance or support of equipment—locomotives: Freight ...... 21–21–XX the repair and maintenance of the carrier’s This account includes the cost of items in- roadway and track within classification stalled or commodities consumed which are yards and stations. This account includes charged to expense, where such items are

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consumed in the performance or support of Road property and equipment damaged ...... 21–23–48 the repair and maintenance of locomotives, Other—other ...... 21–23–99 whether owned by the carrier or by others. Materials, tools, supplies, fuels, lubricants— This account includes charges to expense for transportation—train: Freight ...... 21–31–XX all materials, small tools, supplies, fuels, lu- This account includes the cost of items in- bricants, purchased standard stationery and stalled or commodities consumed which are forms, freight-in on materials and supplies, charged to expense, where such items are and similar items. Its components shall be consumed in association with the dis- distributed to the following functions in ac- patching and operation of freight trains over cordance with instruction 1–8 of Part 1201, the roadway and outside of classification Subpart A: yards. This account includes charges to ex- Administration—General ...... 21–21–01 pense for all materials, small tools, supplies, Repair and maintenance fuels, lubricants, purchased standard sta- Dismantling retired property ...... 21–21–39 tionery and forms, freight-in on materials Machinery ...... 21–21–40 and supplies, and similar items. Its compo- Locomotives ...... 21–21–41 nents shall be distributed to the following Road property and equipment ...... 21–21–48 functions in accordance with instruction 1–8 Other—other ...... 21–21–99 of Part 1201, Subpart A: Materials, tools, supplies, fuels, lubricants— equipment—freight cars: Freight ...... 21–22–XX Administration—general ...... 21–31–01 Operations This account includes the cost of items in- Engine crews ...... 21–31–56 stalled or commodities consumed which are Train crews ...... 21–31–57 charged to expense, where such items are Dispatching trains ...... 21–31–58 consumed in the performance or support of Operating switches, signals, interlockers, re- the repair and maintenance of freight cars, tarders, humps ...... 21–31–59 whether owned by the carrier or by others. Operating drawbridges ...... 21–31–60 Highway crossing protection ...... 21–31–61 This account includes charges to expense for Train inspection and lubrication ...... 21–31–62 all materials, small tools, supplies, fuels, lu- Clearing wrecks ...... 21–31–63 bricants, purchased standard stationery and Locomotive fuels ...... 21–31–67 forms, freight-in on materials and supplies, Electric power purchased/produced for motive and similar items. Its components shall be power ...... 21–31–68 distributed to the following functions in ac- Servicing locomotives ...... 21–31–69 Other—other ...... 21–31–99 cordance with instruction 1–8 of Part 1201, Materials, tools, supplies, fuels, lubricants— Subpart A: transportation—yard: Freight ...... 21–32–XX Administration—general ...... 21–22–01 This account includes the cost of items in- Repair and maintenance stalled or commodities consumed which are Dismantling retired property ...... 21–22–39 charged to expense, where such items are Machinery ...... 21–22–40 consumed in association with the movement Freight cars ...... 21–22–42 Road property and equipment damaged ...... 21–22–48 of freight cars within classification yards Other—other ...... 21–22–99 and in terminal switching and transfer serv- Materials, tools, supplies, fuels, lubricants— ice. This account includes charges to expense equipment—other equipment: Freight ...... 21–23–XX for all materials, small tools, supplies, fuels, This account includes the cost of items in- lubricants, purchased standard statonery stalled or commodities consumed which are and forms, freight-in on materials and sup- charged to expense, where such items are plies, and similar items. Its components consumed in the performance or support of shall be distributed to the following func- the repair and maintenance of equipment tions in accordance with instruction 1–8 of other than locomotives and freight cars, Part 1201, Subpart A: whether owned by the carrier or by others. Administration—general ...... 21–32–01 This account includes charges to expense for Operations all materials, small tools, supplies, fuels, lu- Operating switches, signals, interlockers, re- bricants, purchased standard stationery and tarders, humps ...... 21–32–59 forms, freight-in on materials and supplies, Clearing wrecks ...... 21–32–63 and similar items. Its components shall be Switch crews ...... 21–32–64 Controlling operations ...... 21–32–65 distributed to the following functions in ac- Yard and terminal clerical ...... 21–32–66 cordance with instruction 1–8 of Part 1201, Locomotive fuel ...... 21–32–67 Subpart A: Electric power purchased/produced for motive Administration—general ...... 21–23–01 power ...... 21–32–68 Servicing locomotives ...... 21–32–69 Repair and maintenance Other—other ...... 21–32–99 Dismantling retired property ...... 21–23–39 Materials, tools, supplies, fuels, lubricants— Machinery ...... 21–23–40 transportation—train and yard common: Trucks, trailers, containers in revenue service .. 21–23–43 Freight ...... 21–33–XX Floating equipment—revenue service ...... 21–23–44 Passenger and other revenue equipment ...... 21–23–45 This account includes the cost of items in- Computers and data processing equipment ..... 21–23–46 stalled or commodities consumed which are Work and other nonrevenue equipment ...... 21–23–47 charged to expense, where such items are 154

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consumed on behalf of both train and yard Marketing ...... 21–61–88 operations. This account includes charges to Sales ...... 21–61–89 expense for all materials, small tools, sup- Industrial development ...... 21–61–90 plies, fuels, lubricants, purchased standard Personnel and labor relations ...... 21–61–91 Legal and secretarial ...... 21–61–92 stationery and forms, freight-in on materials Public relations and advertising ...... 21–61–93 and supplies, and similar items. Its compo- Research and development ...... 21–61–94 nents shall be distributed to the following Other—other ...... 21–61–99 functions in accordance with instruction 1–8 of Part 1201, Subpart A: PURCHASED SERVICES Operations Control ...... 30–00–00 Cleaning car interiors ...... 21–33–70 This account may be used as a control ac- Adjusting, transferring loads ...... 21–33–71 count for all accounts in the PURCHASED Car loading devices and grain doors ...... 21–33–72 Materials, tools, supplies, fuels, lubricants— SERVICES series: transportation—specialized services: Freight 21–34–XX Lease rentals—Credit ...... Joint facility rent—Debit ...... This account includes the cost of items in- Joint facility rent—Credit ...... stalled or commodities consumed which are Other rents—Debit ...... charged to expense, where such items are Other rents—Credit ...... consumed in operating services which are Joint facility—Debit ...... specialized in nature and in cost characteris- Joint facility—Credit ...... tics. The specialized services designated by Repairs billed by others—Debit ...... Repairs billed to others—Credit ...... the Commission appear within the definition Other purchased services ...... of specialized services. This account shall be Lease rentals—debit—control ...... 31–00–00 subdivided by the following functions: This control account includes the rentals Administration—general ...... 21–34–01 of road property and equipment with terms Operations of 30 days or more. This account excludes Pick up and delivery, marine line haul, and rail joint facility and joint trackage rents, insur- substitute service ...... 21–34–73 ance and maintenance elements of lease pay- Loading, unloading, and local marine ...... 21–34–74 Protective services ...... 21–34–75 ments, and all elements of capital leases as Other—other ...... 21–34–99 defined in FASB Statement No. 13. The com- Materials, tools, supplies, fuels, lubricants— ponents of this natural expense will be dis- transportation—administrative support: tributed to the following accounts in accord- Freight ...... 21–35–XX ance with instruction 1–8 of Part 1201, Sub- This account includes the cost of items in- part A: stalled or commodities consumed which are Lease rentals—debit—way and structures— charged to expense, where such items are running: freight ...... 31–11–00 consumed in association with providing di- Lease rentals—debit—way and structures— switching: freight ...... 31–12–00 rect administrative support for the Trans- Lease rentals—debit—way and structures— portation Activity. For further clarification other: freight ...... 31–13–00 refer to the definition of the Administrative Lease rentals—debit—equipment—loco- Support Operations Subactivity contained in motives: freight ...... 31–21–00 Part 1201, Subpart A. This account shall be Lease rentals—debit—equipment—freight cars: subdivided by the following functions. freight ...... 31–22–00 Lease rentals—debit—equipment—other equip- Administration—general ...... 21–35–01 ment: freight ...... 31–23–00 Operations Lease rentals—credit—control ...... 32–00–00 Clerks, accounting employees ...... 21–35–76 This control account includes the rentals Communication systems operations ...... 21–35–77 Loss and damage claims processing ...... 21–35–78 of owned property and equipment or sub- Other—other ...... 21–35–99 leases of leased road property and equipment Materials, tools, supplies, fuels, lubricants— with terms of from 30 days to one year. general and administrative: Freight ...... 21–61–XX Longer term leases are indicative of a non- This account includes the cost of items in- carrier operation and all revenues and ex- stalled or commodities consumed which are penses related to such property and equip- charged to expense, where such items are ment should be classified accordingly and ex- consumed in providing overall administra- cluded from railroad operations. This action or other general support for carrier op- count excludes joint facilities and joint erations. For further clarification refer to trackage, capital leases, and portions of the definition of the General and Adminis- lease receipts covering maintenance and in- trative Activity contained in Part 1201, Sub- surance. The components of this natural ex- part A. This account shall be subdivided by pense account will be distributed to the fol- the following functions: lowing accounts in accordance with instruction 1–8 of Part 1201, Subpart A: Administration—general ...... 21–61–01 Lease rentals—credit—way and structures— General running: freight ...... 32–11–00 Accounting, auditing, finance ...... 21–61–86 Lease rentals—credit—way and structures— Management services and data processing ...... 21–61–87 switching: freight ...... 32–12–00 155

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Lease rentals—credit—way and structures— Joint facility rents—credit—way and struc- other: freight ...... 32–13–00 tures—other: Freight ...... 34–13–00 Lease rentals—credit—equipment—loco- Joint facility rents—credit—equipment—locomotives: freight ...... 32–21–00 motives: Freight ...... 34–21–00 Lease rentals—credit—equipment—freight Joint facility rents—credit—equipment—freight cars: freight ...... 32–22–00 cars: Freight ...... 34–22–00 Lease rentals—credit—equipment—other Joint facility rents—credit—equipment—other equipment: freight ...... 32–23–00 equipment: Freight ...... 34–23–00 Joint facility rents—debit—control ...... 33–00–00 Other rents—debit—control ...... 35–00–00 This control account includes amounts This account includes the rents with terms payable accrued as rent for equipment, of less than 30 days which are not renewed. tracks, yards, terminals, and other facilities This account includes all time and mileage owned or controlled by other carriers, com- payments for interchange locomotive, panies, or individuals, and in the joint use of freight car, and other revenue equipment which the accounting company participates. hire. The components of this account will be Amounts paid or payable by the accounting distributed to the following accounts in ac- company in reimbursement for taxes on cordance with instruction 1–8 of Part 1201, property jointly used shall be charged to this Subpart A: account. Other rents—debit—way and structures—run- NOTE: The cost of maintenance, operation, ning: Freight: Freight ...... 35–11–00 or administration of joint facilities, charge- Other rents—debit—way and structures— able to the accounting company, shall be switching: Freight ...... 35–12–00 charged to the various joint facility ac- Other rents—debit—way and structures—other: counts (37–XX–00). When the compensation Freight ...... 35–13–00 for the use of joint facilities is a fixed Other rents—debit—equipment—locomotives: amount or is based upon a charge per ton, Freight ...... 35–21–00 car, or other unit, it shall be fairly appor- Other rents—debit—equipment—freight cars: Freight ...... 35–22–00 tioned between this account and Joint Facil- Other rents—debit—equipment—other equip- ity—Dr. (37–XX–00). This apportionment ment: Freight ...... 35–23–00 shall be made by the operating company, and Other rents—credit—control ...... 36–00–00 shall be followed by the accounting company. The components of this natural ex- This account includes rents with terms of pense consist of the following accounts: less than 30 days which are not renewed. This account includes all time and mileage re- Joint facility rents—debit—way and structures—running: Freight ...... 33–11–00 ceipts for interchanged locomotive, freight Joint facility rents—debit—way and struc- car, and other revenue equipment hire. The tures—switching: Freight ...... 33–12–00 components of this account will be distrib- Joint facility rents—debit—way and struc- uted to the following accounts in accordance tures—other: Freight ...... 33–13–00 with instruction 1–8 of Part 1201, Subpart A: Joint facility rents—debit—equipment—loco- Other rents—credit—way and structures—run- motives: Freight ...... 33–21–00 Joint facility rents—debit—equiment—freight ning: Freight ...... 36–11–00 cars: Freight ...... 33–22–00 Other rents—credit—way and structures— Joint facility rents—debit—equipment—other switching: Freight ...... 36–12–00 equipment: Freight ...... 33–23–00 Other rents—credit—way and structures— Joint facility rents—credit—control ...... 34–00–00 other: Freight ...... 36–13–00 Other rents—credit—equipment—locomotives: This control account includes amounts re- Freight ...... 36–21–00 ceivable accrued for rent of equipment, Other rents—credit—equipment—freight cars: tracks, yards, terminals and other facilities Freight ...... 36–22–00 owned or controlled by the accounting com- Other rents—credit—equipment—other equip- pany and used jointly with other companies ment: Freight ...... 36–23–00 Joint facility—debit—control ...... 37–00–00 or individuals. Amounts receivable from other companies in reimbursement for taxes This account includes joint trackage and on property jointly used shall be credited to joint facility costs, exclusive of rents, pay- this account. able by the railroad to others. The compo- NOTE: The portion of the cost of mainte- nents of this account will be distributed to nance, operation, or administration of joint the following accounts in accordance with facilities recoverable from others shall be instruction 1–8 of Part 1201, Subpart A: credited to the various joint facility ac- Joint Facility—debit—way and structures—run- counts (38–XX–00). When the compensation ning: Freight ...... 37–11–00 for the use of joint facilities is a fixed Joint Facility—debit—way and structures— amount or is based upon a charge per ton, switching: Freight ...... 37–12–00 car, or other unit, it shall be fairly appor- Joint Facility—debit—way and structures— other: Freight ...... 37–13–00 tioned by the creditor between this account Joint facility—debit—equipment—locomotives: and Joint Facility—credit (28–XX–00). Freight ...... 37–21–00 Joint facility rents—credit—way and struc- Joint facility—debit—equipment—freight cars: tures—running: Freight ...... 34–11–00 Freight ...... 37–22–00 Joint facility rents—credit—way and struc- Joint facility—debit—equipment—other equip- tures—switching: Freight ...... 34–12–00 ment: Freight ...... 37–23–00 156

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Joint facility—debit—transportation—train: track within classification yards and sta- Freight ...... 37–31–00 tions. This account shall be subdivided by Joint facility—debit—transportation—yard: the following functions: Freight ...... 37–32–00 Joint facility—debit—transportation—special- Repair and maintenance ized services: Freight ...... 37–34–00 Roadway ...... 39–12–10 Joint facility—debit—transportation—adminis- Tunnels and subways ...... 39–12–11 trative support: Freight ...... 37–35–00 Bridges and culverts ...... 39–12–12 Joint facility—debit—general and administra- Track laying and surfacing ...... 39–12–17 tive: Freight ...... 37–61–00 Signals and interlockers ...... 39–12–19 Joint facility—credit—control ...... 38–00–00 Highway grade crossings ...... 39–12–22 Road property and equipment damaged ...... 39–12–48 This account includes joint trackage and Repairs billed by others—debit—way and joint facility costs, exclusive of rents, pay- structures—other: Freight ...... 39–13–XX able by others to the railroad. The components of this account will be distributed to This account includes amounts payable by the following accounts in accordance with the railroad to others for repair and mainte- instruction 1–8 of Part 1201, Subpart A: nance of the carrier’s structures other than roadway and track. This account shall be Joint facility—credit—way and structures—running: Freight ...... 38–11–00 subdivided by the following functions: Joint facility—credit—way and structures— Repair and maintenance switching: Freight ...... 38–12–00 Communication systems ...... 39–13–20 Joint facility—credit—way and structures— Electric power systems ...... 39–13–21 other: Freight ...... 38–13–00 Station and office buildings ...... 39–13–23 Joint facility—credit—equipment—locomotives: Shop buildings—locomotives ...... 39–13–24 Freight ...... 38–21–00 Shop buildings—freight cars ...... 39–13–25 Joint facility—credit—equipment—freight cars: Shop buildings—other equipment ...... 39–13–26 Freight ...... 38–22–00 Locomotive servicing facilities ...... 39–13–27 Joint facility—credit—equipment—other equip- Miscellaneous buildings and structures ...... 39–13–28 ment: Freight ...... 38–23–00 Coal terminals ...... 39–13–29 Joint facility—credit—transportation—train: Ore terminals ...... 39–13–30 Freight ...... 38–31–00 TOFC/COFC terminals ...... 39–13–31 Joint facility—credit—transportation—yard: Other marine terminals ...... 39–13–32 Freight ...... 38–32–00 Motor vehicle loading and distribution facilites .. 39–13–33 Joint facility—credit—transportation—special- Facilities for other specialized services oper- ized services: Freight ...... 38–34–00 ations ...... 39–13–35 Joint facility—credit—transportation—adminis- Roadway machines ...... 39–13–36 trative support: Freight ...... 38–35–00 Small tools and supplies ...... 39–13–37 Joint facility—credit—general and administra- Snow removal ...... 39–13–38 tive: Freight ...... 38–61–00 Road property and equipment damaged ...... 39–13–48 Repairs billed by others—debit—control ...... 39–00–00 Repairs billed by others—debit—equipment— This account includes amounts payable by locomotives: Freight ...... 39–21–XX the railroad to others for repair and mainte- This account includes amounts payable by nance of the reporting railroad’s property the railroad to others for repair and mainte- and equipment. The components of this ac- nance under the locomotive subactivity. count shall be distributed to the following This account shall be subdivided by the fol- accounts in accordance with instruction 1–8 lowing functions: of Part 1201, Subpart A: Repair and maintenance Repairs billed by others—debit—way and Machinery ...... 39–21–40 structures—running: Freight ...... 39–11–XX Locomotives ...... 39–21–41 This account includes amounts payable by Road property and equipment damaged ...... 39–21–48 the railroad to others for repair and mainte- Repairs billed by others—debit—equipment— nance of the reporting railroad’s property as- freight cars: Freight ...... 39–22–XX sociated with the carrier’s roadway and This account includes amounts payable by track on the line of road and outside of clas- the railroad to others for repair and mainte- sification yards. This account shall be sub- nance under the freight car subactivity. This divided by the following functions: account shall be subdivided by the following Repair and maintenance function: Roadway ...... 39–11–10 Repair and maintenance Tunnels and subways ...... 39–11–11 Machinery ...... 39–22–40 Bridges and culverts ...... 39–11–12 Freight cars ...... 39–22–42 Track laying and surfacing ...... 39–11–17 Road property and equipment damaged ...... 39–22–48 Signals and interlockers ...... 39–11–19 Repairs billed by others—debit—equipment— Highway grade crossings ...... 39–11–22 other equipment: Freight ...... 39–23–XX Road property and equipment damaged ...... 39–11–48 Repairs billed by others—debit—way and This account includes amounts payable by structures—switching: Freight ...... 39–12–XX the railroad to others for the repair and This account includes amounts payable by maintenance of equipment not pertaining to the railroad to others for repair and mainte- the locomotive or freight car subactivity. nance of the reporting railroad’s property as- This account shall be subdivided by the fol- sociated with the carrier’s roadway and lowing functions: 157

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Repair and maintenance Other marine terminals ...... 40–13–32 Motor vehicle loading and distribution facilities 40–13–33 Machinery ...... 39–23–40 Facilities for other specialized services oper- Trucks, trailers, and containers in revenue ations ...... 40–13–35 service ...... 39–23–43 Roadway machines ...... 40–13–36 Floating equipment—revenue service ...... 39–23–44 Small tools and supplies ...... 40–13–37 Passenger and other revenue equipment ...... 39–23–45 Snow removal ...... 40–13–38 Computers and data processing equipment ..... 39–23–46 Road property and equipment damaged ...... 40–13–48 Work and other nonrevenue equipment ...... 39–23–47 Repairs billed to others—credit—equipment— Road property and equipment damaged ...... 39–23–48 locomotives: Freight ...... 40–21–XX Repairs billed to others—credit—control ...... 40–00–00 This account includes amounts payable by This control account includes amounts others to the railroad for repair and mainte- payable by others to the railroad for repair nance of other railroads’ locomotives. This and maintenance of others’ road property account shall be subdivided by the following and equipment. The components of this ac- functions: count shall be distributed to the following accounts in accordance with instruction 1–8 Repair and maintenance of Part 1201, Subpart A: Machinery ...... 40–21–40 Locomotives ...... 40–21–41 Repairs billed to others—credit—way and Road property and equipment damaged ...... 40–21–48 structures—running: Freight ...... 40–11–XX Repairs billed to others—credit—equipment— This account includes amounts payable by freight cars: Freight ...... 40–22–XX others to the railroad for repair and mainte- This account includes amounts payable by nance of other railroads’ roadway and track others to the railroad for repair and mainte- on the line of road and outside of classifica- nance of other railroads’ freight cars. This tion yards. This account shall be subdivided account shall be subdivided by the following by the following functions: functions: Repair and maintenance Repair and maintenance Roadway ...... 40–11–10 Machinery ...... 40–22–40 Tunnels and subways ...... 40–11–11 Freight cars ...... 40–22–42 Bridges and culverts ...... 40–11–12 Road property and equipment damaged ...... 40–22–48 Track laying and surfacing ...... 40–11–17 Repairs billed to others—credit—equipment— Signals and interlockers ...... 40–11–19 other equipment: Freight ...... 40–23–XX Highway grade crossings ...... 40–11–22 Road property and equipment damaged ...... 40–11–48 This account includes amounts payable by Repairs billed to others—credit—way and others to the railroad for repair and mainte- structures—switching: Freight ...... 40–12–XX nance of other railroads’ other equipment. This account shall be subdivided by the fol- This account includes amounts payable by lowing functions: others to the railroad for repair and maintenance of other railroads’ roadway and track Repair and maintenance within classification yards and stations. This Machinery ...... 40–23–40 account shall be subdivided by the following Trucks, trailers, and containers in revenue functions: service ...... 40–23–43 Floating equipment—revenue service ...... 40–23–44 Repair and maintenance Passenger and other revenue equipment ...... 40–23–45 Roadway ...... 40–12–10 Computers and data processing equipment ..... 40–23–46 Tunnels and subways ...... 40–12–11 Work and other non-revenue equipment ...... 40–23–47 Bridges and culverts ...... 40–12–12 Road property and equipment damaged ...... 40–23–48 Track laying and surfacing ...... 40–12–17 Other purchased services—control ...... 41–00–00 Signals and interlockers ...... 40–12–19 This control account includes amounts Highway grade crossings ...... 40–12–22 Road property and equipment damaged ...... 40–12–48 charged or credited to operating expenses for Repairs billed to others—credit—way and purchased advertising; purchased printing; structures—other: Freight ...... 40–13–XX outside professional services such as legal, accounting, audit, engineering, and con- This account includes amounts payable by sulting; payments for detour of trains; utili- others to the railroad for repair and mainte- ties, telephone, postage, subscriptions, com- nance of other railroads’ structures other munications, purchased electric power for than roadway and track. This account shall train and locomotive propulsion; and other be subdivided by the following functions: services purchased. The components of this Repair and maintenance account shall be distributed to the following Communication systems ...... 40–13–20 accounts in accordance with instruction 1–8 Electric power systems ...... 40–13–21 of Part 1201, Subpart A: Station and office buildings ...... 40–13–23 Shop buildings—locomotives ...... 40–13–24 Other purchased services—way and struc- Shop buildings—freight cars ...... 40–13–25 tures—running: Freight ...... 41–11–XX Shop buildings—other equipment ...... 40–13–26 This account includes amounts charged or Locomotive servicing facilities ...... 40–13–27 Miscellaneous buildings and structures ...... 40–13–28 credited to operating expenses for other pur- Coal terminals ...... 40–13–29 chased services specified in control account Ore terminals ...... 40–13–30 41–00–00. This account shall be subdivided by TOFC/COFC terminals ...... 40–13–31 the following functions: 158

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Repair and maintenance Repair and maintenance Roadway ...... 41–11–10 Dismantling retired property ...... 41–21–39 Tunnels and subways ...... 41–11–11 Machinery ...... 41–21–40 Bridges and culverts ...... 41–11–12 Locomotive ...... 41–21–41 Track laying and surfacing ...... 41–11–17 Road property and equipment damaged ...... 41–21–48 Signals and interlockers ...... 41–11–19 Other—other ...... 41–21–99 Highway grade crossings ...... 41–11–22 Other purchased services—equipment—freight Dismantling retired property ...... 41–11–39 cars: Freight ...... 41–22–XX Road property and equipment damaged ...... 41–11–48 Other—other ...... 41–11–99 This account includes amounts charged or Other purchased services—way and struc- credited to operating expenses for other pur- tures—switching: Freight ...... 41–12–XX chased services specified in control account This account includes amounts charged or 41–00–00. This account shall be subdivided by credited to operating expenses for other pur- the following functions: chased services specified in control account Administration—general ...... 41–22–01 41–00–00. This account shall be subdivided by Repair and maintenance the following functions: Dismantling retired property ...... 41–22–39 Repair and maintenance Machinery ...... 41–22–40 Freight cars ...... 41–22–42 Roadway ...... 41–12–10 Road property and equipment damaged ...... 41–22–48 Tunnels and subways ...... 41–12–11 Other—other ...... 41–22–99 Bridges and culverts ...... 41–12–12 Other purchased services—equipment—other Track laying and surfacing ...... 41–12–17 equipment: Freight ...... 41–23–XX Signals and interlockers ...... 41–12–19 Highway grade crossings ...... 41–12–22 This account includes amounts charged or Dismantling retired property ...... 41–12–39 credited to operating expenses for other pur- Road property and equipment damaged ...... 41–12–48 chased services specified in control account Other—other ...... 41–12–99 Other purchased services—way and struc- 41–00–00. This account shall be subdivided by tures—other: Freight ...... 41–13–XX the following functions: Administration—general ...... 41–23–01 This account includes amounts charged or credited to operating expenses for other pur- Repair and maintenance chased services specified in control account Dismantling retired property ...... 41–23–39 41–00–00. This account shall be subdivided by Machinery ...... 41–23–40 Trucks, trailers, containers in revenue service .. 41–23–43 the following functions: Floating equipment—revenue service ...... 41–23–44 Administration Passenger and other revenue equipment ...... 41–23–45 Track ...... 41–13–02 Computers and data processing equipment ..... 41–23–46 Bridges and buildings ...... 41–13–03 Work and other nonrevenue equipment ...... 41–23–47 Signals ...... 41–13–04 Road property and equipment damaged ...... 41–23–48 Communications ...... 41–13–05 Other—other ...... 41–23–99 Other ...... 41–13–06 Other purchased services—transportation— Repair and maintenance train: Freight ...... 41–31–XX Communication systems ...... 41–13–20 This account includes amounts charged or Electric power systems ...... 41–13–21 credited to operating expenses for other pur- Station and office buildings ...... 41–13–23 chased services specified in control account Shop buildings—locomotives ...... 41–13–24 41–00–00. This account shall be subdivided by Shop buildings—freight cars ...... 41–13–25 Shop buildings—other equipment ...... 41–13–26 the following functions: Locomotive servicing facilities ...... 41–13–27 Administration—general ...... 41–31–01 Miscellaneous buildings and structures ...... 41–13–28 Operations Coal terminals ...... 41–13–29 Engine crews ...... 41–31–56 Ore terminals ...... 41–13–30 Train crews ...... 41–31–57 TOFC/COFC terminals ...... 41–13–31 Other marine terminals ...... 41–13–32 Dispatching trains ...... 41–31–58 Motor vehicle loading and distribution facilities 41–13–33 Operating switches, signals, interlockers, re- Facilities for other specialized services oper- tarders, humps ...... 41–31–59 ations ...... 41–13–35 Operating drawbridges ...... 41–31–60 Roadway machines ...... 41–13–36 Highway crossing protection ...... 41–31–61 Small tools and supplies ...... 41–13–37 Train inspection and lubrication ...... 41–31–62 Snow removal ...... 41–13–38 Clearing wrecks ...... 41–31–63 Dismantling retired property ...... 41–13–39 Locomotive fuel ...... 41–31–67 Road property and equipment damaged ...... 41–13–48 Electric power purchased/produced for motive Other—other ...... 41–13–99 power ...... 41–31–68 Other purchased services—equipment—loco- Servicing locomotives ...... 41–31–69 motives: Freight ...... 41–21–XX Other—other ...... 41–31–99 Other purchased services—transportation— This account includes amounts charged or yard: Freight ...... 41–32–XX credited to operating expenses for other pur- This account includes amounts charged or chased services specified in control account credited to operating expenses for other pur- 41–00–00. This account shall be subdivided by chased services specified in control account the following functions: 41–00–00. This account shall be subdivided by Administration—general ...... 41–21–01 the following functions: 159

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Administration—general ...... 41–32–01 Public relations and advertising ...... 41–61–93 Operations Research and development ...... 41–61–94 Other—other ...... 41–61–99 Operating switches, signals, interlockers, retarders, humps ...... 41–32–59 Clearing wrecks ...... 41–32–63 CLAIMS AND INSURANCE Switch crews ...... 41–32–64 Control ...... 50–00–00 Controlling operations ...... 41–32–65 Yard and terminal clerical ...... 41–32–66 This account may be used as a control ac- Locomotive fuel ...... 41–32–67 count for all accounts in the CLAIMS AND Electric power purchased/produced for motive INSURANCE series: loss and damage claims; power ...... 41–32–68 other casualties; insurance. Servicing locomotives ...... 41–32–69 Other—other ...... 41–32–99 Loss and damage claims—control ...... 51–00–00 Other purchased services—transportation— This account includes amounts payable to train and yard common: Freight ...... 41–33–XX compensate for the loss or damage of freight This account includes amounts charged or or other goods carried in revenue service. credited to operating expenses for other pur- This account excludes amounts payable to chased services specified in control account employees or other parties for injuries sus- 41–00–00. This account shall be subdivided by tained or loss of life; for damage to real prop- the following functions: erty of others or personal property not car- Operations ried in revenue service; all payments for Cleaning car interiors ...... 41–33–70 other damages of any kind; and related in- Adjusting, transferring loads ...... 41–33–71 surance premiums. Car loading devices and grain doors ...... 41–33–72 Loss and damage claims—transportation— Other purchased services—transportation— train: freight ...... 51–31–00 specialized services: Freight ...... 41–34–XX This account includes amounts payable to This account includes amounts charged or compensate for the loss or damage of freight credited to operating expenses for other pur- or other goods carried in revenue service chased services specified in control account while operating all trains except those per- 41–00–00. This account shall be subdivided by forming yard functions in terminals. the following functions: Administration—general ...... 41–34–01 Loss and damage claims—transportation— yard: freight ...... 51–32–00 Operations Pick up and delivery, marine line haul, and rail This account includes amounts payable to substitute service ...... 41–34–73 compensate for the loss or damage of freight Loading, unloading, and local marine ...... 41–34–74 or other goods carried in revenue service Protective Services ...... 41–34–75 which is lost or damaged in yards or termi- Other—other ...... 41–34–99 nals. Other purchased services—transportation—administrative support: freight ...... 41–35–XX Loss and damage claims—transportation—train and yard common: freight ...... 51–33–00 This account includes amounts charged or credited to operating expenses for other pur- This account includes amounts payable to chased services specified in control account compensate for the loss or damage of freight 41–00–00. This account shall be subdivided by or other goods carried in revenue service the following functions: which are not predominantly train or yard. Administration—general ...... 41–35–01 Loss and damage claims—transportation—specialized services: freight ...... 51–34–00 Operations Clerks, accounting employees ...... 41–35–76 This account includes amounts payable to Communication systems operations ...... 41–35–77 compensate for the loss or damage of freight Loss and damage claims processing ...... 41–35–78 or other goods carried in revenue service in- Other—other ...... 41–35–99 curred in designated specialized services op- Other purchased services—general and admin- erations. istrative: freight ...... 41–61–XX Other casualties—control ...... 52–00–00 This account includes amounts charged or credited to operating expenses for other pur- This account includes amounts payable to chased services specified in control account employees or other parties for injuries sus- 41–00–00. This account shall be subdivided by tained or loss of life in connection with the the following functions: construction, maintenance, operations, and Administration—general ...... 41–61–01 administration of railroad property and equipment; for damage to real property, General property of others or personal property not Accounting, auditing, finance ...... 41–61–86 carried in revenue service; all payments for Management services and data processing ...... 41–61–87 Marketing ...... 41–61–88 other damages of any kind. This account ex- Sales ...... 41–61–89 cludes freight and other goods carried in rev- Industrial development ...... 41–61–90 enue service, and insurance premiums re- Personnel and labor relations ...... 41–61–91 lated to the casualties chargeable to this ac- Legal and secretarial ...... 41–61–92 count. 160

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NOTE: The costs of clearing wrecks and re- This account includes amounts charged to pairing casualty-caused damage to the rail- operating expenses for items not otherwise road’s property and equipment are properly provided for in the other natural expense ac- classified under other natural expense accounts, including travel and other expenses counts as appropriate and further classified of employees, road property retirement by relevant activities and functions. lossses, and other items of a general nature These costs are appropriately charged to associated with the carrier’s roadway and the following natural accounts: track on the line of road and outside of classification yards. This account shall be sub- Other casualties—way and structures—running: freight ...... 52–11–00 divided by the following functions: Other casualties—way and structures—switch- Repair and maintenance ing: freight ...... 52–12–00 Roadway ...... 61–11–10 Other casualties—way and structures—other: Tunnels and subways ...... 61–11–11 freight ...... 52–13–00 Bridges and culverts ...... 61–11–12 Other casualties—equipment—locomotives: Track laying and surfacing ...... 61–11–17 freight ...... 52–21–00 Signals and interlockers ...... 61–11–19 Other casualties—equipment—freight cars: Highway grade crossings ...... 61–11–22 freight ...... 52–22–00 Dismantling retired property ...... 61–11–39 Other casualties—equipment—Other equip- Road property and equipment damaged ...... 61–11–48 ment: freight ...... 52–23–00 Other—other ...... 61–11–99 Other casualties—transportation—train: freight 51–31–00 Other expenses—way and structures—switch- Other casualties—transportation—yard: freight 51–32–00 ing: freight ...... 61–12–XX Other casualties—transportation—specialized This account includes amount charged to services: freight ...... 52–34–00 operating expenses for items not otherwise Other casualties—transportation—administrative support: freight ...... 52–35–00 provided for in the other natural expense ac- Other casualties—general and administrative: counts, including travel and other expenses freight ...... 52–61–00 of employees, road property retirement Insurance—control ...... 53–00–00 losses, and other items of a general nature associated with the carrier’s roadway and This account includes premiums for insur- track within classification yards and sta- ance to cover property and equipment loss tions. This account shall be subdivided by and damage, liability, business interruption, the following functions: and the like. These costs are appropriately charged to the following accounts: Repair and maintenance Roadway ...... 61–12–10 Insurance—way and structures—running: Tunnels and subways ...... 61–12–11 freight ...... 53–11–00 Bridges and culverts ...... 61–12–12 Insurance—way and structures—switching: Track laying and surfacing ...... 61–12–17 freight ...... 53–12–00 Signals and interlockers ...... 61–12–19 Insurance—way and structures—other: freight 53–13–00 Highway grade crossings ...... 61–12–22 Insurance—equipment—locomotives: freight .... 53–21–00 Dismantling retired property ...... 61–12–39 Insurance—equipment—freight cars: freight ..... 53–22–00 Road property and equipment damaged ...... 61–12–48 Insurance—equipment—other equipment: Other—other ...... 61–12–99 freight ...... 53–23–00 Other expenses—way and structures—other: Insurance—transportation—train: freight ...... 53–31–00 freight ...... 61–13–XX Insurance—transportation—yard: freight ...... 53–32–00 Insurance—transportation—specialized serv- This account includes amounts charged to ices: freight ...... 53–34–00 operating expenses for items not otherwise Insurance—transportation—administrative sup- provided for in the other natural expense ac- port: freight ...... 53–35–00 counts, including travel and other expenses Insurance—general and administrative: freight 53–61–00 of employees, road property retirement losses, and other items of a general nature GENERAL associated with the carrier’s structures Control ...... 60–00–00 other than roadway and track. This account This account may be used as a control ac- shall be subdivided by the following func- count for all accounts in the GENERAL se- tions: ries: other expenses; depreciation; Administration uncollectible accounts; property taxes; other Track ...... 61–13–02 taxes. Bridges and buildings ...... 61–13–03 Signals ...... 61–13–04 Other expenses—control ...... 61–00–00 Communications ...... 61–13–05 This account includes amounts charged to Other ...... 61–13–06 operating expenses for items not otherwise Repair and maintenance provided for in the other natural expense ac- Communication systems ...... 61–13–20 counts, including travel and other expenses Electric power systems ...... 61–13–21 of employees, road property and equipment Station and office buildings ...... 61–13–23 retirement losses, and other items of a gen- Shop buildings—locomotives ...... 61–13–24 Shop buildings—freight cars ...... 61–13–25 eral nature. Shop buildings—other equipment ...... 61–13–26 Other expenses—way and structures—running: Locomotive servicing facilities ...... 61–13–27 freight ...... 61–11–XX Miscellaneous buildings and structures ...... 61–13–28

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Coal terminals ...... 61–13–29 Computers and data processing equipment ..... 61–23–46 Ore terminals ...... 61–13–30 Work and other nonrevenue equipment ...... 61–23–47 TOFC/COFC terminals ...... 61–13–31 Road property and equipment damaged ...... 61–23–48 Other marine terminals ...... 61–13–32 Other—other ...... 61–23–99 Motor vehicle loading and distribution facilities 61–13–33 Other expenses—transportation—train: Freight 61–31–XX Facilities for other specialized services operations ...... 61–13–35 This account includes amounts charged to Roadway machines ...... 61–13–36 operating expenses for items not otherwise Small tools and supplies ...... 61–13–37 provided for in the other natural expense ac- Snow removal ...... 61–13–38 counts, including travel and other expenses Dismantling retired property ...... 61–13–39 of employees, associated with the dis- Road property and equipment damaged ...... 61–13–48 patching and operations of freight trains Other—other ...... 61–13–99 Other expenses—equipment—locomotives: over the roadway and outside of classifica- Freight ...... 61–21–XX tion yards. This account shall be subdivided by the following functions: This account includes amounts charged to Administration—general ...... 61–31–01 operating expenses for items not otherwise provided for in the other natural expense ac- Operations counts, including travel and other expenses Engine crews ...... 61–31–56 of employees and equipment retirement Train crews ...... 61–31–57 Dispatching trains ...... 61–31–58 losses, associated with the repair and main- Operating switches, signals, interlockers, re- tenance of locomotives, whether owned by tarders, humps ...... 61–31–59 the carrier or by others. This account shall Operating drawbridges ...... 61–31–60 be subdivided by the following functions: Highway crossing protection ...... 61–31–61 Administration—general ...... 61–21–01 Train inspection and lubrication ...... 61–31–62 Clearing wrecks ...... 61–31–63 Repair and maintenance Locomotive fuel ...... 61–31–67 Dismantling retired property ...... 61–21–39 Electric power purchased/produced for motive Machinery ...... 61–21–40 power ...... 61–31–68 Locomotives ...... 61–21–41 Servicing locomotives ...... 61–31–69 Road property and equipment damaged ...... 61–21–48 Other—other ...... 61–31–99 Other—other ...... 61–21–99 Other expenses—transportation—yard: Freight 61–32–XX Other expenses—equipment—freight cars: Freight ...... 61–22–XX This account includes amounts charged to operating expenses for items not otherwise This account includes amounts charged to provided for in the other natural expense ac- operating expenses for items not otherwise counts, including travel and other expenses provided for in the other natural expense ac- of employees, and other items of a general counts, including travel and other expenses nature associated with the movement of of employees, equipment retirement losses, freight cars within classification yards and associated with the repair and maintenance in terminal switching and transfer service. of freight cars, whether owned by the carrier This account shall be subdivided by the fol- or by others. This account shall be sub- lowing functions: divided by the following functions: Administration—general ...... 61–32–01 Administration—general ...... 61–22–01 Operations Repair and maintenance Operating switches, signals, interlockers, re- Dismantling retired property ...... 61–22–39 tarders, humps ...... 61–32–59 Machinery ...... 61–22–40 Clearing wrecks ...... 61–32–63 Freight cars ...... 61–22–42 Switch crews ...... 61–32–64 Road property and equipment damaged ...... 61–22–48 Controlling operations ...... 61–32–65 Other—other ...... 61–22–99 Yard and terminal clerical ...... 61–32–66 Other expenses—equipment—other equip- Locomotive fuel ...... 61–32–67 ment: Freight ...... 61–23–XX Electric power purchased/produced for motive This account includes amounts charged to power ...... 61–32–68 operating expenses for items not otherwise Servicing locomotives ...... 61–32–69 provided for in the other natural expense ac- Other—other ...... 61–32–99 Other expenses—transportation—specialized counts, including travel and other expenses services: Freight ...... 61–34–XX of employees, equipment retirement losses, associated with the repair and maintenance This account includes amounts charged to of equipment other than locomotives and operating expenses for items not otherwise freight cars, whether owned by the carrier or provided for in the other natural expense ac- by others. This account shall be subdivided counts, including travel and other expenses by the following functions: of employees, and other items of a general Administration—general ...... 61–23–01 nature incurred in operating services which are specialized in nature and in cost charac- Repair and maintenance teristics. The specialized services designated Dismantling retired property ...... 61–23–39 by the Board appear within the definition of Machinery ...... 61–23–40 Trucks, trailers, containers in revenue service .. 61–23–43 specialized services. This account shall be Floating equipment—revenue service ...... 61–23–44 subdivided by the following functions: Passenger and other revenue equipment ...... 61–23–45 Administration—general ...... 61–34–01 162

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Operations notes due to the railroad, whether classified Pick up and delivery, marine line haul, and rail as current or long-term. This account in- substitute service ...... 61–34–73 cludes any credits to allowance accounts for Loading, unloading, and local marine ...... 61–34–74 collectibility and total writeoff of receiv- Protective services ...... 61–34–75 ables. This account does not include Other—other ...... 61–34–99 writedowns of property, equipment, or in- Other expenses—transportation—administra- vestments (except accounts, notes, or other tive support: Freight ...... 61–35–XX receivables held as investments). Proper ad- This account includes amounts charged to justments of incorrect receivables are not to operating expenses for items not otherwise be charged to this account. Collections of provided for in the other natural expense ac- amounts previously written off or down are counts, including travel and other expenses to be credited to this account. The total of of employees, and other items of a general this account shall be charged to the fol- nature incurred in association with pro- lowing account: viding direct administrative support for the Uncollectible accounts—general and adminis- Transportation Activity. This account shall trative: Freight ...... 63–61–00 be subdivided by the following functions: Property taxes—control ...... 64–00–00 Administration—general ...... 61–35–01 This account includes only taxes based on Operations the value of real estate and personal prop- Clerks, accounting employees ...... 61–35–76 erty used in railroad operations. The total of Communication systems operations ...... 61–35–77 this account shall be charged to the fol- Loss and damage claims processing ...... 61–35–78 lowing account: Other—other ...... 61–35–99 Other expenses—general and administrative: Property taxes—general and administrative: Freight ...... 61–61–XX Freight ...... 64–61–00 Other taxes—control ...... 65–00–00 This account includes amounts charged to operating expenses for items not otherwise This account includes taxes on gross re- provided for in the other natural expense ac- ceipts, franchise fees, excise taxes, and simi- counts, including travel and other expenses lar items. This account excludes property of employees, and other items of a general taxes and taxes chargeable as emloyee bene- nature incurred in providing overall admin- fits. The total of this account shall be istration of other support for carrier oper- charged to the following account: ations. This account shall be subdivided by Other taxes—general and administrative: the following functions: Freight ...... 65–61–00 Administration—general ...... 61–61–01 (2) Other computed cost elements. General Accounting, auditing, finance ...... 61–61–86 651 Locomotives return on investment. Management services and data processing ...... 61–61–87 652 Freight train car costs. Marketing ...... 61–61–88 01 Per day costs. Sales ...... 61–61–89 02 Mileage costs. Industrial development ...... 61–61–90 654 Rehabilitation. Personnel labor relations ...... 61–61–91 664 Deadheading, taxi and hotel costs. Legal and secretarial ...... 61–61–92 Public relations and advertising ...... 61–61–93 01 Deadheading. Research and development ...... 61–61–94 02 Taxi. Other—other ...... 61–61–99 03 Hotel. Depreciation—control ...... 62–00–00 665 Overhead movement costs. This control account includes the amounts 01 Transportation. charged to operating expenses for deprecia- 02 Equipment. tion of owned road property and equipment, 03 Freight-train cars—mileage portion. and the depreciation element of road prop- (3) Off-branch avoidable costs. erty held under capital lease in accordance with FASB Statement No. 13. These costs are 661 Terminal costs. appropriately charged to the following nat- 01 Modified terminal costs. ural accounts: 02 Normal terminal costs. Depreciation—way and structures—running: 03 Interchange costs. Freight ...... 62–11–00 662 Freight train car costs. Depreciation—way and structures—switching: 663 Freight train revenue ton-mile costs. Freight ...... 62–12–00 Depreciation—way and structures—other: (4) All other avoidable costs.1 Freight ...... 62–13–00 Depreciation—equipment—locomotives: Freight 62–21–00 671 Working capital. Depreciation—equipment—freight cars: Freight 62–22–00 672 Required capital expenditures. Depreciation—equipment—other equipment: 673 Deferred maintenance. Freight ...... 62–23–00 Uncollectible accounts—control ...... 63–00–00 1 This account includes charges to operating Accounts 671–675 apply to Part 1152 only. expenses for the writedown of accounts and Accounts 677 and 682 apply to Part 1155 only. 163

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674 Current cost of freight train cars, loco- (g) Previous category. motives, and other equipment. [44 FR 9730, Feb. 14, 1979, as amended at 47 675 Foregone tax benefits. FR 49596, Nov. 1, 1982] 676 Administrative costs. 677 Deferred subsidy payment costs. 678 Casualty reserve expenses. PARTS 1202–1219 [RESERVED] Total, all other avoidable costs. 681 Reasonable return on the value of prop- Parts 1220–1239—Preservation of erties. 682 Management fee. Records [43 FR 1733, Jan. 11, 1978, as amended at 43 NOTE: Section 20(7)(b) of the Interstate FR 28498, June 30, 1978; 44 FR 9730, Feb. 14, Commerce Act includes the following provi- 1979; 47 FR 49596, Nov. 1, 1982; 67 FR 57533, sion: Sept. 11, 2002] Any person who shall knowingly and willfully make, cause to be made, or participate APPENDIX I TO PART 1201—CERTIFI- in the making of, any false entry in any an- CATION OF BRANCH LINE ACCOUNTING nual or other report required under this sec- SYSTEM RECORDS tion to be filed, or in the accounts of any book of accounts or in any records or memo- Carrier: (Exact legal title or name of the re- randa kept by a carrier, or required under spondent) lllllllllllllllll this section to be kept by a lessor or other llllllllllllllllllllllll person, or who shall knowingly and willfully Name, title, telephone number and address of destroy, mutilate, alter, or by any other the person to be contacted: means or device falsify the record of any such accounts, records, or memoranda, * * * Name llllllllllllllllllll shall be deemed guilty of a misdemeanor and Title lllllllllllllllllllll shall be subject, upon conviction in any Telephone Number: (Area Code) and (Tele- court of the United States of competent ju- phone number) llllllllllllll risdiction to a fine of not more than five Office Address: (Street and number) (City, thousand dollars or imprisonment for not State, and ZIP code) lllllllllll more than two years, or both such fine and llllllllllllllllllllllll imprisonment: Provided, That the Board may in its discretion issue orders specifying such CERTIFICATION operating, accounting, or financial papers, I, the undersigned, lllllllllllll records, books, blanks, tickets, stubs, cor- of (Title of officer in charge of accounts) ll respondence, or documents of such carriers, llllllllllllllllllllllll lessors, or other persons as may, after a rea- (Full name of reporting company) lllll sonable time, be destroyed, and prescribing the length of time the same shall be pre- certify that during the calendar year 19ll served. the branch line accounting system data were collected and maintained for each line that met the criteria set forth in 49 CFR 1201, PART 1220—PRESERVATION OF Subpart B, section 920(a), Lines For Which RECORDS Data Collection Is Required, (Docket No. 36366). Sec. Signature llllllllll 1220.0 Applicability. 1220.1 Records required to be retained. Datellllll 1220.2 Protection and storage of records. The lines covered by this certification are 1220.3 Preservation of records. described below: (Describe each branch line 1220.4 Companies going out of business. separately using the following format as set 1220.5 Waiver of requirements of these regu- forth in 49 CFR 1152.11.) lations. (a) Carrier’s designation for line (Ex. 1220.6 Schedule of records and periods of re- Zanesville Secondary Track); tention. (b) State or states in which line is located; (c) County or counties in which line is lo- AUTHORITY: 49 U.S.C. 721, 11144, 11145. cated; SOURCE: 50 FR 10775, Mar. 18, 1985; 51 FR (d) Milepost delineating each line or por- 22083, June 18, 1986, unless otherwise noted. tion of line; (e) Agency or terminal station(s) located § 1220.0 Applicability. on line or portion of line with milepost des- ignations; The preservation of record rules con- (f) Current category designation and date tained in this part shall apply to the placed in that category; and following:

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