a reserve for doubtful accounts, and amounts appropriated for other purposes not provided for elsewhere.** NOTE: Similar appropriations made from surplus shall be charged to account No. 414, "Miscellaneous appropriations of surplus." PROFIT AND LOSS ACCOUNTS 18.4-1 Special instructions. Profit and loss accounts are those designed to show the changes in the corporate surplus or deficit during each fiscal period, resulting from the operations and business transactions during that period, as well as changes effected by appropriations of surplus made at the option of the company, by accounting adjustments not properly attributable to the period, or by miscellaneous losses or gains not provided for elsewhere, and to show also the unappropriated surplus of the company at the date of the balance sheet. When the title and definition of a profit and loss account clearly indicate that it is a summary of other accounts, it is not required that a special ledger account shall be kept under such a title to include the balances from the accounts usually carried in the ledger, but in such case the titles of the subaccounts in the ledger shall give a reference by number or title, or both, to the account prescribed herein of which they are subdivisions.* [Introduction, p. 67, Uniform system of accounts for express companies (profit and loss accounts), ICC, May 28, 1914] CREDITS 18.401 Credit balance (at beginning of fiscal period). This account shall include the net credit balance in the Profit and Loss Account at the beginning of the fiscal period.*†† In §§ 18.401 to 18.417, inclusive, the numbers to the right of the decimal point correspond with the respective account numbers in Uniform system of accounts for express companies (profit and loss accounts), Interstate Commerce Commission, May 28, 1914. Cross references to accounts are made by citing the account number, e. g., account No. 328, instead of the corresponding section number (§ 18.328). 18.402 Credit balance transferred from income. This account shall show the net credit balance brought forward from the Income Account for the fiscal period.*tt 18.403 Profit on real property and equipment sold. This account shall include the proceeds from the sale of real property and equipment in excess of the amount at which such property was carried in the property account.*†† 18.404 Delayed income credits. This account shall include relatively large credits relating to operating revenues, operating expenses, and other income items of previous fiscal periods. All entries in this account shall be made in such detail as will indicate the operating revenue, operating expense, or other income accounts to which they relate. This account shall be used only after permission of the Commission shall have been obtained.*** NOTE: Except as provided above delayed items relating to operating revenues and operating expenses, and other income items, shall be included in the appro Page 428 *For statutory citation, see note to § 18.00-1. †For source citation, see note to § 18.301. priate revenue, expense, or income accounts for the fiscal period in which the audit of the items occurs. 18.405 Unrefundable overcharges. This account shall include the amount of the revenue overcharges found to be unrefundable during the current fiscal period.*† 18.406 Miscellaneous profit and loss credits. This account shall include amounts, not provided for elsewhere, transferred from other accounts to Profit and Loss, and amounts representing increases of resources not properly assignable to the income accounts. Among the items which shall be included in this account are Adjustments or cancellations of balance-sheet accounts, Profit derived from the sale of property carried in balance-sheet account No. 503, "Miscellaneous physical property." Credits resulting from adjustments required to bring to par securities issued or assumed by the accounting company and reacquired at a cost less than the par value, Premiums received on capital stock at time of issue, when such stock is reacquired. Unreleased premiums on funded debt reacquired before maturity.*† DEBITS 18.407 Debit balance (at beginning of fiscal period). This account shall include the debit balance in the Profit and Loss Account at the beginning of the fiscal period.*† 18.408 Debit balance transferred from income. This account shall include the net debit balance brought forward from the Income Account for the fiscal period.** 18.409 Surplus applied to sinking and other reserve funds. This account shall include amounts definitely appropriated from surplus and applied to sinking and other reserve funds; and allotments or payments of definite amounts from surplus into sinking and other reserve funds under the terms of mortgages, deeds of trust, or other contracts that provide for such allotments or payments.*+ NOTE A: The amounts charged to this account shall be concurrently credited to balance-sheet account No. 553, "Reserves from income and surplus." NOTE B: Similar appropriations made from income shall be charged to account No. 328, "Income applied to sinking and other reserve funds." 18.410 Dividend appropriations of surplus. This account shall include amounts declared payable from surplus as dividends on actually outstanding capital stock issued or assumed by the accounting company. If a dividend is not payable in cash, the equivalent shall be described in the entry with sufficient particularity to identify it. This account shall be subdivided so as to show separately the dividends on the various subclasses of capital stock. (See definition of the several subclasses in balance-sheet account No. 528, "Capital stock.")*+ NOTE A: This account shall not include charges for dividends on capital stock issued or assumed by the accounting company and owned by it, whether pledged as collateral or held in its treasury, in special deposits, or in sinking or other *For statutory citation, see note to § 18.00–1. Page 429 reserve funds. (See account No. 409, "Surplus applied to sinking and other reserve funds.") NOTE B: Similar appropriations made from income shall be charged to account No. 329, "Dividend appropriations of income." 18.411 Surplus set aside for investment in physical property. This account shall include amounts definitely appropriated from surplus to be applied for the acquisition of real property and equipment, for additions to or betterments of property carried in the real property and equipment accounts, or for the acquisition of property the cost of which is includible in acount No. 503, "Miscellaneous physical property." Records of the accounting carrier shall be so kept that the appropriations charged to this account for any fiscal period may be distinguished as relating to real property or equipment used in operation, or to property shown in account No. 503, "Miscellaneous physical property," and as relating to (a) amounts expended during preceding fiscal periods, (b) amounts expended during the current fiscal period, and (c) amounts held in reserve.*† NOTE A Similar appropriations made from income shall be charged to income account No. 330, "Income appropriations for investment in physical property." NOTE B: The amounts charged to this account shall be concurrently credited to balance-sheet account No. 552, "Additions to property through income and surplus," or to account No. 553, "Reserves from income and surplus." 18.412 Stock discount extinguished through surplus. This account shall include amounts definitely appropriated from surplus to reduce or extinguish the amount of discount on capital stock or shares issued by the accounting company. (See balance-sheet account No. 523, "Discount on capital stock.")*+ NOTE: Similar appropriations made from income shall be charged to account No. 331, "Stock discount extinguished through income." 18.413 Debt discount extinguished through surplus. This account shall include appropriations of surplus made, at the option of the accounting company, to reduce or extinguish the discount and expense on funded debt. (See account No. 325, "Amortization of discount on funded debt," and account No. 524, "Discount on funded debt.")*+ 18.414 Miscellaneous appropriations of surplus. Except as provided in account No. 409, "Surplus applied to sinking and other reserve funds," this account shall include amounts definitely appropriated from surplus for the discharge of the principal (less any discount suffered at time of sale) of any indebtedness incurred in the acquisition or improvement of property carried in the real property and equipment accounts, amounts similarly appropriated to provide a reserve for doubtful accounts, and amounts appropriated for other purposes not provided for elsewhere.** NOTE: Similar appropriations made from income shall be charged to account No. 332, "Miscellaneous appropriations of income." 18.415 Loss on land sold. This account shall include charges to Profit and Loss on account of land, carried in the real property accounts, which has been abandoned, sold, or otherwise disposed of.** 18.416 Delayed income debits. This account shall include relatively large debits relating to operating revenues, operating expenses, Page 430 *For statutory citation, see note to § 18.00-1. and other income items of previous fiscal periods. All entries in this account shall be made in such detail as will indicate the operating revenue, operating expense, or other income accounts to which they relate. This account shall be used only after permission of the Interstate Commerce Commission shall have been obtained.*t NOTE: Except as provided above, delayed items relating to operating revenues and operating expenses, and other income items, shall be included in the appropriate revenue, expense, or income accounts for the fiscal period in which the audit of the items occurs. 18.417 Miscellaneous profit and loss debits. This account shall include amounts not provided for elsewhere, chargeable to Profit and Loss from other accounts, amounts written off in consequence of adjustments, and payments not properly chargeable to the income accounts. Among the items which shall be charged to this account are Adjustments or cancelations of balance-sheet accounts, Losses or deficits not properly chargeable to Income, such as uncollectible bills not covering revenue charges and for which no reserve has been provided, Losses resulting from the sale of investment securities, Losses resulting from the sale, destruction, or abandonment of property carried in balance-sheet account No. 503, "Miscellaneous physical property," Debits resulting from adjustments required to bring to par securities issued or assumed by the accounting company and reacquired at a cost exceeding the par value, Discounts on stock remaining unextinguished at the time of its reacquirement, Unextinguished discounts on funded debt reacquired before maturity.* SPECIAL INSTRUCTIONS-GENERAL BALANCE SHEET ACCOUNTS 18.5-1 Balance sheet accounts. When the title and definition of a balance-sheet account clearly indicate that it is a summary of other accounts, it is not required that a special ledger account shall be kept under such a title to include the balances from the accounts usually carried in the ledger, but in such case the titles of the subaccounts in the ledger shall give a reference by number or title, or both, to the account prescribed herein of which they are subdivisions.*ti ttIn 88 18.5 to 18.5-7, inclusive, the numbers to the right of the dash correspond with the respective special instruction numbers in Uniform system of accounts for express companies (general balance sheet accounts), Interstate Commerce Commission, May 28, 1914. Cross references to accounts are made by citing the account number, e. g., account No. 523, instead of the corresponding section number (§ 18.523). 18.5-2 Designation of capital issues. The term capital stock, when used in this classification, shall be construed as including shares of interest in joint stock associations and like organizations.*+ 18.5-3 Discount and premium on capital stock. Ledger accounts shall be provided to cover the discounts and premiums at the *For statutory citation, see note to § 18.00-1. For source citation, see note to § 18.401. Page 431 sale or resale of each class of capital stock issued or assumed by the company. By the term discount is meant the excess of the par value of stocks actually issued or assumed over the actual money value of the consideration received for such stocks. By the term premium is meant the excess of the actual money value of the consideration received for stock actually issued or assumed over the par value of such stock. Entries in these accounts representing discounts shall be carried therein until offset (a) by premiums realized on subsequent sales of the same class of stock, (b) by assessments levied on the stockholders, (c) by appropriations of income or surplus for that purpose, or (d) by charges to Profit and Loss upon reacquirement of the stock. Entries in these accounts representing premiums realized shall be carried therein until offset by discounts suffered on sales of the same class of stock, or by credits to Profit and Loss upon reacquirement of the stock. In case the accounting company is permitted and elects to distribute to its shareholders all or any part of the net premium on its capital stock the amount thus distributed shall be charged to these accounts. For the purpose of this classification the premium realized at the sale of capital stock shall not be considered a profit and loss item except upon the requirement of the stock sold. The total of the net debit balances remaining in these several accounts shall be included in account No. 523, "Discount on capital stock," and the total of the net credit balances in account No. 529, "Premium on capital stock.” *† 18.5-4 Discount, expense, and premium on funded debt. Ledger accounts shall be provided to cover the discounts, expense, and premiums at the sale or resale of each class of funded debt and of receiver's certificates issued or assumed by the company. By the term discount is meant the excess of the par value of funded debt securities issued or assumed, and the accrued interest thereon, over the actual cash value of the consideration received for such securities. By the term premium is meant the excess of the actual cash value of the consideration received for funded debt securities issued or assumed over the par value of such securities and the accrued interest thereon. By the term expense is meant all expense in connection with the issue and sale of evidences of debt, such as fees for drafting mortgages and trust deeds; fees and taxes for issuing or recording mortgages and trust deeds; cost of engraving and printing bonds, certificates of indebtedness, and other commercial paper having a life of more than 1 year; fees paid trustees, when provided for in mortgages and trust deeds; fees and commissions paid underwriters and brokers for marketing such evidences of debt; and other like expenses. The total of the net debit balances remaining in these several accounts shall be included in account No. 524, "Discount on funded Page 432 *For statutory citation, see note to § 18.00-1. |