Record here the cost of materials and supplies consumed directly in maintenance of airframes and spare parts related to airframes.

46.2 Materials-Aircraft Engines.

Record here the cost of materials and supplies consumed directly in maintenance of aircraft engines and spare parts related to aircraft engines.

46.8 Materials-Other Flight Equipment.

Record here the cost of materials and supplies consumed directly in maintenance of flight equipment (including instruments) other than airframes and aircraft engines, or spare parts related to airframes and aircraft engines. Instruments shall include all gauges, meters, measuring devices, and indicators, together with appurtenances thereto for installation in aircraft and aircraft engines, which are maintained separately from airframes and aircraft engines.

GROUP I AIR CARRIERS

46.6 Materials-Flight Equipment.

Record here the cost of materials and supplies consumed directly in the maintenance of flight equipment of all types and classes. ALL AIR CARRIER GROUPS

46.9 Materials-Ground Property and

Equipment.

Record here the cost of materials and supplies consumed directly in the maintenance of ground property and equipment of all types and classes. The cost of materials and supplies consumed in the repair of general ground properties shall be charged to subfunction 5200 Direct Maintenance and materials and supplies consumed in the repair of maintenance buildings and equipment shall be charged to subfunction 5300 Maintenance Burden.

49 Shop and Servicing Supplies.

Record here the cost of supplies and expendable small tools and equipment used in maintaining, servicing and cleaning property or equipment the cost of which cannot be directly assigned to a specific job or type of work.

50 Stationery, Printing and Office Supplies.

Record here the cost of stationery and forms used by the air carrier including the cost of engineering and shipping supplies.

51 Passenger Food Expense.

(a) Record here the cost of food and refreshments served passengers except food costs arising from interrupted trips. (b) If the air carrier prepares its own food, the initial cost and expenses incurred in the preparation thereof shall be accumulated in a clearly identified clearing account through which the cost of food shall be cleared to this account, to profit and loss account 36 Personnel Expenses, and to profit and loss account 10 Hotel, Restaurant and Food Service on bases which appropriately allocate the cost of food served passengers, the cost of food provided employees without charge and the cost of food sold.

53 Other Supplies.

Record here the cost of supplies consumed and not provided for otherwise. 54 Inventory Adjustments.

Record here adjustments for overage, shortage or shrinkage of inventories carried in balance sheet accounts 1310 Flight Equipment Expendable Parts and 1330 Miscellaneous Materials and Supplies. Adjustment of aircraft fuel and oil inventories shall not be included in this account but in profit and loss account 45 Aircraft Fuels and Oils. Gains or losses from retirements of materials and supplies shall not be recorded in this account but in profit and loss account 81 Capital Gains and Losses. 55 Insurance-General.

(a) Record here provisions for selfinsurance and the cost of purchased public liability and property damage and all other general insurance except insurance covering liability for injuries, loss and damage to passengers and cargo, and insurance carried for the protection or welfare of employees.

(b) This account shall be subdivided as follows by all air carrier groups:

57 Insurance-Employee Welfare.

Record here the cost of purchased insurance and provisions for self-insurance covering liability for the benefit or protection of employees, and contributions of the air carrier to employee pension or other welfare plans.

58 Injuries, Loss and Damage.

Record here the remainder of gains, losses or costs resulting from accidents, casualties or mishandlings, after offsetting insurance recoveries, as accumulated until finally determined, in balance sheet account 1890 Other Deferred Charges. This account shall not include gains or losses from retirement of property and equipment resulting from casualties. Such gains or losses shall be recorded in appropriate capital gains or losses accounts.

59 Tariffs, Schedules and Timetables.

Record here the production and distribution cost, excluding compensation of air carrier personnel, of all tariffs, operating schedules, timetables, circulars and related quick reference charts. 60 Advertising.

Record here the cost, excluding compensation of air carrier personnel, of all space, direct mail, spot and other advertising for the purpose of increasing air travel, disseminating air travel information and publicizing services offered by the air carrier.

62 Other Promotional and Publicity Ex

penses.

Record here the costs, excluding compensation of air carrier personnel, of producing and distributing publicity releases and other expenses, not chargeable to profit and loss accounts 59 and 60, incurred for the purpose of publicizing or improving the public relations of the air carrier generally.

63 Interrupted Trips Expense.

Record here expenses allowed or paid for the care and serving of passengers because of unscheduled interruptions in passenger journeys. Transportation refunds and the cost of forwarding traffic by surface common carrier or otherwise as a result of such interruptions shall not be charged to this account but to the appropriate operating revenue account. 64 Memberships.

Record here the cost of membership dues in trade associations, chambers of

commerce, or other business associations and organizations together with special assessments related thereto.

65 Corporate and Fiscal Expenses.

Record here corporate and fiscal fees and expenses of the air carrier and all expenses in connection with exchange and transfer of capital stock excluding expenses in connection with original issuance of capital stock.

66 Uncollectible Accounts.

Record here losses from uncollectible accounts and reserve provisions and adjustments thereto, for such losses. When reserves for uncollectible accounts are established, losses as realized shall be charged against such reserves and shall not be charged to this account. 67 Clearance, Customs and Duties.

Record here clearance, customs, duties and brokerage fees and charges applicable to clearing aircraft and traffic. 68 Taxes

Payroll.

Record here all taxes levied against the air carrier based upon or directly relating to compensation of personnel. 69 Taxes Other Than Payroll.

(a) Record here all taxes levied against the air carrier not otherwise provided for including nonrefundable aircraft fuel and oil taxes. Interest and penalties on delinquent taxes shall not be charged to this account but to profit and loss accounts 87 Interest Expense and 89 Miscellaneous Nonoperating Debits, respectively. to (b) Entries this account shall clearly reveal each kind of tax and the governmental agency to which paid or payable.

71 Other Expenses.

Record here all expenses ordinarily associated with air transportation and its incidental services not provided for otherwise.

72.7 Airworthiness Reserve Charges-Aircraft Engines (Credit)

Record here credits for aircraft engine overhaul costs incurred in the current period which have been charged against related airworthiness reserves.

73 Provisions for Obsolescence and De

terioration-Expendable Parts.

(a) Where reserves for loss in value of flight equipment expendable parts are established, provisions for accruals to such reserves shall be charged to this account and credited to balance sheet account 1311 Obsolescence and Deterioration Reserves-Expendable Parts in accordance with the provisions of that account.

(b) This account shall be subdivided as follows by all air carrier groups:

1830 Developmental and Preoperating Costs as approved or directed by the Civil Aeronautics Board.

74.2 Other Intangibles.

Record here amortization of the cost of intangibles not provided for otherwise as approved or directed by the Civil Aeronautics Board.

75 Depreciation.

(a) Record here provisions for depreciation of property and equipment carried in balance sheet accounts 1601

through 1640, inclusive.

(b) This account shall be subdivided as follows:

ALL AIR CARRIER GROUPS 75.1 Depreciation—Airframes.

Record here provisions for depreciation of property and equipment carried in balance sheet account 1601 Airframes.

75.2 Depreciation—Aircraft Engines.

Record here provisions for depreciation of property and equipment carried in balance sheet account 1602 Aircraft Engines.

GROUP II AND GROUP III AIR CARRIERS 75.3 Depreciation—Airframe Parts.

Record here provisions for depreciation of spare airframe instruments and parts car. ried in balance sheet subaccount 1608.1 Airframe Parts and Assemblies.

75.4 Depreciation-Aircraft Engine Parts.

Record here provisions for depreciation of spare aircraft engine instruments and parts carried in balance sheet subaccount 1608.5 Aircraft Engine Parts and Assemblies.

ALL AIR CARRIER GROUPS 75.5 Depreciation—Other Flight Equipment. Record here provisions for depreciation of property and equipment and parts carried in balance sheet accounts 1603 Aircraft Propellers, 1604 Aircraft Communications and Navigational Equipment, 1606 Miscellaneous Flight Equipment, 1607 Improvements to Leased Flight Equipment (exclusive of capitalized overhauls of leased flight equipment for which airworthiness reserves are maintained) and balance sheet subaccount 1608.9 Other Parts and Assemblies. Group I air carriers shall also include in this subaccount provisions for depreciation of property carried in balance sheet account 1608 Flight Equipment Rotable Parts and Assemblies. 75.6 Depreciation-Flight Equipment.

This classification is established only for purposes of control by the Civil Aeronautics Board and shall include all charges to operating expenses for depreciation of flight equipment of all types and classes.

75.8 Depreciation—Maintenance Equipment

and Hangars.

Record here provisions for depreciation of property and equipment carried in balance sheet account 1634, Maintenance and Engineering Equipment and balance sheet subaccount 1640.1 Maintenance Buildings and Improvements.

75.9 Depreciation-General Ground Property.

Record here provisions for depreciation of property and equipment carried in balance sheet accounts 1630 through 1640, other than account 1634, Maintenance and Engineering Equipment and subaccount 1640.1, Maintenance Buildings and Improvements.

77 Uncleared Expense Credits.

(a) Record here credits to operating expenses, which have not been cleared to the objective accounts to which applicable.

(b) Each air carrier shall credit, or charge as appropriate, the objective account prescribed for each expense element which may be involved in distribution of expenses between separate reporting entities or nontransport divisions of the air carrier. At the option of the air carrier, either the individual applicable objective accounts or this account may be credited with amounts capitalized, charged against incidental services, or otherwise assigned to other than separate operating entities of the air carrier provided the aggregate credits to this account in each function do not, for any accounting year, distort the individual objective accounts of the function to which related and all expense credits applicable to complete individual transactions are consistently credited either to this account or the individual objective accounts to which related. Each air carrier using this account shall establish such standard practices as may be prescribed by the Civil Aeronautics Board or, in the absence of such action by the Civil Aeronautics Board, such standard practices as will prevent credits to this account from significantly distorting the individual objective accounts of each function to which related.

(c) This account shall not be credited with amounts applicable to objective accounts of the Flying Operations, Depreciation, and Direct Maintenance functions. Credits applicable to such functions shall be carried to the individual objective accounts to which applicable.

(d) This account shall be subdivided as follows by all air carrier groups: 77.8 Uncleared Interchange Expense Credits.

Record here credits to operating expenses, from operations performed for others under aircraft interchange agreements, which have not been cleared to the objective accounts to which applicable.

77.9 Other Uncleared Expense Credits.

Record here credits to operating expenses, from other than operations under aircraft interchange agreements, which have not been cleared to the objective accounts to which applicable.

78 Direct Maintenance-Flight Equip

ment.

This classification is established for purposes of control by the Civil Aeronautics Board and shall include all charges to operating expenses for maintenance of flight equipment of all types and classes.

79 Applied Burden Debit/Credit.

(a) This classification is established only for purposes of control by the Civil Aeronautics Board and reporting on Form 41 by air carriers, and shall reflect all maintenance burden applied in accordance with the provisions of section 24, schedule P-5 of this system of accounts and reports.

(b) This classification shall be subdivided as follows by all air carrier groups:

79.6 Applied Burden-Flight Equipment. 79.8 Applied Burden-General Ground Property.

Section 14-Objective Classification-Nonoperating Income and

Expense

80 Interest Capitalized.

(a) Record here credit amounts for interest capitalized pursuant to section 2-10 and charged to balance sheet accounts.

(b) This account shall be subdivided as follows:

80.1 Interest Charged to ConstructionCredit.

Record here credits related to interest capitalized in balance sheet account 1689 Construction Work in Progress.

80.2 Interest Charged to Development— Credit.

Record here credits related to interest capitalized in balance sheet account 1830 Developmental and Preoperating Costs.

(a) Record here gains or losses on retirements of property and equipment, repair parts, supplies or materials, and investments in securities. This account shall not include gains or losses on debt securities issued by the air carrier which have been reacquired and cancelled or resold. Such gains or losses shall be recorded, as appropriate, in profit and loss account 88 Miscellaneous Nonoperating Credits or 89 Miscellaneous Nonoperating Debits. Gains or losses on reacquisition and retirement or resale of capital stock issued by the air carrier shall not be included in this account but in paid-in capital subaccount 2890.3 Other Capital Stock Transactions. Gains or losses from property carried in balance sheet account 1520 Advances to Nontransport Divisions shall be accounted for in books of nontransport divisions and treated by the air carrier as a part of quarterly profit and loss of nontransport divisions taken up through profit and loss account 86 Income from Nontransport Ventures.

(b) This account shall be subdivided as follows by all air carrier groups: 81.1 Capital Gains and Losses-Operating Property.

Record here gains or losses on retirements of operating property and equipment, flight equipment expendable parts, or miscellaneous materials and supplies sold or otherwise retired in connection with a general retirement program as opposed to incidental sales performed as a service to others. 81.2 Capital Gains and Losses-Other.

Record here gains or losses on retirement of nonoperating property and equipment and investments in securities of others. 82 Unapplied Cash Discounts.

Record here cash discounts on routine purchases of materials, repair parts or supplies. Cash discounts on classes of assets included in property and equipment accounts shall not be recorded in this account but shall be applied as a reduction of the cost of such assets. 83 Interest Income.

(a) Record here interest income from all sources. This account shall include as an increase or reduction of interest received the proportionate amortization of any discount or premium on the purchase price of securities of others held by the air carrier.

(b) This account shall not include interest on securities issued or assumed by the air carrier and subsequently reacquired.

84 Dividend Income.

Record here income from dividends declared on stocks of other companies owned by the air carrier. Dividends on securities issued or assumed by the air carrier and subsequently reacquired shall not be included in this account.

85 Foreign Exchange Adjustments.

Record here gains or losses from transactions involving currency conversions resulting from nonroutine, unusual changes in rates of foreign exchange in accordance with provisions of section 2-3.

86 Income from Nontransport Ventures.

(a) Record here the gross revenues and expenses applicable to operations not reasonably considered as incidental to the commercial air transport services of the accounting entity; rents from nonoperating properties used by others; income or loss from nontransport divisions; and other income or loss from activities of the air carrier which are extraneous to the air transport and incidental services of the accounting entity.

(b) This account shall include revenues and expenses applicable to nonscheduled transport services performed for the defense establishment when and as separate reports for such services are required in accordance with section 21 or 31, as applicable, Introduction to System of Reports. Where the foregoing transport services are not required to be separately reported, gross revenues from such services shall be included in profit and loss account 07 Charter and Special, or other appropriate revenue account, and gross expenses shall be included in the appropriate operating expense functions.

[ER-327, 26 F.R. 4222, May 16, 1961, as amended by ER-369, 27 F.R. 12819, Dec. 28, 1962]