Record here the total cost to the air carrier of all types and classes of equipment used in restaurants and kitchens, as provided in section 5-3.

1632 Ramp Equipment.

Record here the total cost to the air carrier of equipment of all types and classes, as provided in section 5-3, used in enplaning and handling traffic and in handling aircraft while on ramps, in cluding motorized vehicles used in ramp service. Classes of equipment used interchangeably between handling aircraft on ramps and in maintaining aircraft may be classified in accordance with normal predominant use.

Record here the total cost to the air carrier of equipment of all types and classes, as provided in section 5-3, including motorized vehicles used in engineering and drafting services and in maintaining, overhauling, repairing and testing other classes of property and equipment. Classes of equipment used interchangeably between handling aircraft on ramps and in maintaining aircraft may be classified in accordance with normal predominant use.

1635 Surface Transport Vehicles and Equipment.

Record here the total cost to the air carrier of property and equipment of all types and classes, as provided in section 5-3, used in ground and marine transportation services. This account shall not include motorized vehicles or equipment used primarily in loading and servicing aircraft or in maintaining aircraft, which motorized vehicles or equipment shall be classified in accordance with predominant use.

1636 Furniture, Fixtures and Office Equipment.

Record here the total cost to the air carrier of furniture, fixtures and office equipment of all types and classes,

wherever used or located, as provided in section 5-3.

1637 Storage and Distribution Equip

ment.

Record here the total cost to the air carrier of property and equipment of all types and classes, as provided in section 5-3, used in storing and distributing fuel, oil and water, such as fueling trucks, tanks, pipe lines, etc.

1638 Miscellaneous Ground Equipment.

Record here the total cost to the air carrier of ground equipment of all types and classes, as provided in section 5-3 (not provided for in balance sheet accounts 1630 through 1637, inclusive) such as medical, photographic, and employee's training equipment, and airport and airway lighting equipment.

1640 Buildings and Other Improve

ments.

Record here the total cost to the air carrier of buildings, structures and equipment and related improvements, both owned and leased, as provided in section 5-3. Each air carrier shall maintain the following subaccounts in which the values fairly assignable to maintenance and other operations shall be separately recorded:

1640.1 Maintenance Buildings and Improvements.

1640.9

1649

Other Buildings and Improvements.

Ground Property and Equipment. This classification is established only for purposes of control by the Civil Aeronautics Board and shall reflect the total cost of property and equipment of all types and classes other than flight equipment, land, and work in progress. 1669

Reserves for Depreciation— Ground Property and Equipment.

(a) Record in accounts 1650 through 1660, inclusive, accruals for depreciation of ground property and equipment as provided in section 5-4.

(b) As set forth in section 3, Chart of Balance Sheet Accounts, separate accounts shall be established for depreciation reserves which parallel balance sheet accounts 1630 through 1640, established for recording the cost of ground property and equipment.

1679 Land.

Record here the initial cost and the cost of improving land, as provided in section 5-3.

1689

Construction Work in Progress.

(a) Record here the direct and indirect costs to the air carrier accumulated to the date of the balance sheet in connection with constructing and readying for installation in operations, for property and equipment of all types and classes as provided in section 5-3. Where properly includible in the property and equipment classification, record here also the accumulated costs for uncompleted overhauls of airframes, aircraft engines, or other material units of property.

(b) At the option of the air carrier this account may be used as a clearing account for recording the cost of property and equipment acquisitions prior to a distribution thereof to the appropriate property accounts, whether or not conditioning or modification is necessary before placing in service.

NONOPERATING PROPERTY AND EQUIPMENT 1700 Nonoperating Property and Equip

crew training expenses, and regulatory proceedings expenses. Expenses which would be otherwise incurred in the normal air transport operations conducted by the air carrier during the current accounting period shall not be allocated to developmental or preoperating projects and charged to this account. Nor shall this account be credited for revenues from aircraft flights of a developmental or preoperating character the operating costs of which are charged to this account. Any such revenues shall be included in the profit and loss account for the respective type of revenue. This account shall include charges for only those costs associated with projects directed at obtaining new operating authority or expanding the physical capacity of the air carrier and shall not include costs incurred for the purpose of generating revenues through rate adjustment. Accordingly, costs associated with regulatory proceedings involving route awards or amendments, whether successful or unsuccessful to the carrier, shall be included in this account whereas costs associated with regulatory proceedings involving rate or other revenue generation matters shall be charged to appropriate expense accounts.

(c) Records shall be established for new routes or extensions of existing routes to record separately: (1) Costs incurred in acquiring or applying for the routes, including all costs incurred prior to certification by the Board and inauguration of service by the air carrier, and (2) costs incurred after revenue operations begin over the new routes or extensions.

(d) Subclassifications shall be established to record for each developmental project the period covered and the purpose of each item of expense. Each air carrier shall classify the costs of all projects included in this account between: (1) Those related and contributing to the normal air transportation services currently conducted by the air carrier; (2) those related to services conducted by the air carrier which are extraneous to or are not otherwise related to the air transporation services currently conducted; and (3) those held in suspense pending status determination in terms of possible contribution to the air transportation services and inauguration of the service or operation to which related.

(e) Amounts included in this account which contribute to or protect the position of the normal air transportation

services currently conducted by the carrier shall be amortized to profit and loss account 74 Amortization, unless otherwise approved or directed by the Civil Aeronautics Board. Other amounts included in this account shall be amortized or charged to profit and loss account 89 Miscellaneous Nonoperating Debits. 1840 Unamortized Discount and Expense on Debt.

(a) Record here the excess of the par value of debt securities issued over the cash value of consideration received therefor, exclusive of accrued interest, together with expenses related to the assumption by the air carrier of debt of all types and classes.

(b) Amounts recorded in this account shall be amortized to profit and loss account 87 Interest Expense. Discount and expense on short-term debt may be charged directly to profit and loss account 87 Interest Expense.

1850 Unamortized Capital Stock Ex

pense.

Record here, in separate subdivisions for each class and series of capital stock, all commissions and expenses incurred in the original issuance and sale of capital stock. The air carrier may amortize the balance in this account to profit and loss account 89 Miscellaneous Nonoperating Debits. The air carrier may, at its option, record expenses incurred in the issurance of capital stock in balance sheet account 2890 Other Paid-In Capital as an offset to paid-in capital.

1870

Property Acquisition Adjustment.

(a) Record here the difference between the purchase price to the air carrier of property and equipment acquired as a part of a business from another air carrier through consolidation, merger, or reorganization, pursuant to a plan approved by the Civil Aeronautics Board, and the depreciated cost to the predecessor company at date of acquisition. Record here also such differences relating to purchases of property and equipment from associated companies unless other treatment is approved by the Board. Separate subaccounts shall be established to record the amounts applicable to each such acquisition.

(b) Balances in this account shall be amortized by charges to profit and loss account 89 Miscellaneous Nonoperating Debits unless otherwise directed or approved by the Civil Aeronautics Board.

66-081 0-72 -16

(c) When charges are made to this account, each air carrier shall file a statement of accounting procedures with the Civil Aeronautics Board in accordance with section 22(d) or 32(d), as applicable. The required statement shall include an explanation of the charges and the air carrier's proposed plan for writeoff or amortization.

(d) The foregoing instructions do not apply to purchases of individual units of property or equipment from another air carrier when such acquisitions do not require approval of the Civil Aeronautics Board.

[ER-327, 26 F.R. 4222, May 16, 1961, as amended by ER-483, 32 F.R. 2810, Feb. 11, 1967]

1880 Other Intangibles.

Record here the cost of leaseholds, patents, copyrights and other intangible properties, rights and privileges acquired as a part of a business from other air carriers and other intangible assets not provided for elsewhere. This account shall be subdivided to reflect the nature of each intangible asset included in this account. Amortization of each intangible asset recorded in this account shall be effected in accordance with a plan filed with the Civil Aeronautics Board. (See section 5-5.)

(b) This account shall be charged with property loss and other costs related to casualties and credited with recoveries from purchased insurance and salvage. Where self-insurance reserves are not provided, a debit or credit balance in this account related to property retired as a result of a casualty shall be recorded in profit and loss account 81 Capital Gains and Losses; however, any balances related to property not retired or to other casualties shall be recorded in profit and loss account 58 Injuries, Loss and Damage. Proceeds from purchased insurance for property damage,

received prior to repair of such damage, shall not be credited to this account but to balance sheet account 2390 Other Deferred Credits pending repair. In cases where self-insurance reserves are applicable, debit or credit balances in this account related to property loss shall be accounted for in accordance with the provisions of balance sheet account 2350 Reserve for Self-insurance. The records for each major casualty shall be kept in such manner as to clearly disclose insurance recoveries and the total costs, which shall include charges for the depreciated cost of property damaged or destroyed, costs for clearing wrecks and damaged property and equipment, including salaries and wages for the repair thereof, and payments for damages to property of others. The cost of casualties shall not be charged directly against retained earnings or appropriations thereof, but shall be cleared through the applicable profit and loss accounts in accordance with the foregoing.

2010

CURRENT LIABILITIES

Current Notes Payable.

Record here the face value of all notes, drafts, acceptances, or other similar evidences of indebtedness payable on demand or within one year to other than associated companies, including the portion of long-term debt due within one year of the balance sheet date. The current portion of long-term debt expected to require the use of existing resources of a type not properly classifiable as current assets, shall be included in appropriate noncurrent liability accounts and shall not be included in this account. 2020 Accounts Payable-General.

Record here all accounts payable within 1 year which are not provided for in accounts 2030 to 2050, inclusive. [ER-606, 35 F.R. 4614, Mar. 17, 1970] 2030 Collections as Agent-Traffic.

(a) This account shall include amounts collected for transportation furnished by others, except associated companies, whether settled through airline clearing houses or with individual carriers.

(b) Accounts receivable, includible in account 1240 Accounts Receivable-General Tarffic shall not be charged to this account.

2040 Collections as Agent-Other.

Record here amounts collected for the account of others such as sales or trans

portation taxes and amounts deducted from employee salaries and wages for payments to others exclusive of amounts collected for air transportation over the lines of other air carriers.

2050 Notes and Accounts Payable— Associated Companies.

Record here gross amounts due on traffic accounts, current notes and open accounts with associated companies. Balances receivable from associated companies, shall not be offset against amounts carried in this account. Balances with associated companies which are not normally settled currently shall not be included in this account but in balance sheet account 2240 Advances from Associated Companies.

2110 Accrued Personnel Compensation.

Record her amounts accrued for unpaid compensation to personnel, which have been charged to profit and loss or capitalized, as compensation for the period in which accrued.

2120 Accrued Vacation Liability.

(a) Record here any accruals for liabilities against the air carrier for personnel vacations. At the option of the air carrier the cost of personnel vacations may be charged directly to the applicable personnel compensation expense account without accrual through this account.

(b) This account shall be credited and the applicable personnel compensation expense account concurrently charged with the cost of any lag between vacations accrued and vacations taken. Accruals may be based upon standard rates of lag provided such standard rates are verified by physical inventory and adjusted accordingly at least once each calendar year. Adjustments of balances in this account shall be cleared to applicable compensation expense accounts. No accruals shall be made to this account for other than definitely demonstrable obligations of the air carrier. (See section 2-5 for applicable accounting policy.)

(c) Each air carrier shall file a statement with the Board fully describing the accounting procedures followed in accruing liability for personnel vacations. The statement shall include such information as (1) bases of accrual; (2) whether the accruals are made pursuant to a firm labor agreement or contract; and (3) whether the accruals cover all employees or certain categories only.

(See section 22(d) or 32(d), as applicable.)

[ER-327, 26 F.R. 4222, May 16, 1961, as amended by ER-417, 29 F.R. 13530, Oct. 1, 1964]

2131 Accrued Federal Income Taxes.

(a) Record here accruals for currently payable Federal income taxes. Provisions for deferred taxes shall not be accrued except as provided in section 2-6.

(b) The amount of any potential investment tax credit, computed pursuant to section 46(a)(1) of the U.S. Internal Revenue Code, applicable to property placed in service during each accounting period, and not used as an offset against income tax liabilities, shall be debited to a memorandum account under balance sheet account 2390 Other Deferred Credits titled "Investment Tax Credits Available" and shall be credited to a memorandum account, also under balance sheet account 2390, titled "Unrealized Investment Tax Credits." As investment tax credits are utilized in the reduction of tax liabilities, or expire, these two memorandum accounts shall be adjusted to the remaining outstanding balance of unused and unexpired credits. Concurrently with the utilization of investment tax credits, this account 2131 shall be charged, and profit and loss account 91 Provision for Income Taxes shall be credited. At the option of the air carrier, credits utilized in the reduction of income tax liabilities may be carried through profit and loss account 93.1 Investment Tax Credits Deferred, on a consistent basis from year to year, to balance sheet account 2345 Deferred Investment Tax Credits for amortization over the service life of related property to profit and loss account 93.2 Amortization of Deferred Investment Tax Credits.

(c) In the event that investment tax credits utilized in the reduction of tax liabilities are later disallowed as a result of premature disposition of the property, or otherwise, such disallowed amounts shall be credited to this account 2131 and charged to profit and loss account 91 Provision for Income Taxes. The amount charged to account 91 shall then be cleared through profit and loss account 93.1 to balance sheet account 2345 Deferred Investment Tax Credits to the extent of any related unamortized balance therein.

(d) Each air carrier shall disclose on schedule P-2 of its CAB Form 41 for each calendar quarter whether utilized credits are accounted for on a current or deferred basis under subsection (b) above. The method selected shall be consistently followed by the carrier and shall not be changed unless an application is submitted for Board approval at least 18 months before the date the change is scheduled to become effective.

[ER-425, 30 F.R. 745, Jan. 1, 1965 88 amended by ER-437, 30 F.R. 8829, July 14, 1965; ER-437, 30 F.R. 9001, July 17, 1965] 2139 Other Accrued Taxes.

Record here accruals for taxes, exclusive of Federal income taxes, constituting a charge borne by the air carrier, as opposed to those collected as an agent for others.

2140 Dividends Declared.

Record here in separate subdivisions for each class and series of capital stock, all dividends declared but unpaid on capital stock.

2150 Air Travel Plan Liability.

Record here the air carrier's liability for deposits received under air travel plan contracts.

2160

Unearned Transportation Revenue. (a) Record here balances representing the value of unused transportation sold and to be provided by the air carrier.

(b) Earned revenue and the value of transportation sold but not used or refunded shall be consistently and periodically cleared by debit to this account and credit to the appropriate profit and loss revenue account. Amounts receivable for transportation to be provided by the air carrier shall be debited to balance sheet account 1240 Accounts Receivable-General Traffic.

(c) Subaccounts to this account shall be established to record balances pertaining to passenger and cargo transportation sold, respectively, and separately to sales in scheduled and nonscheduled services.

(d) In accordance with the provisions of section 22(d) or section 32(d), as applicable, a statement shall be filed with the Board which fully explains the accounting methods and bases of clearing to income both earned and unredeemed transportation sales. The statement shall specify the date when the analysis supporting the verification re