22.254 Stationery and printing. This account should include the cost of all stationery, stationery supplies, passes, printing, books, and blank forms used in connection with general offices, including contracts, leases, bonds, stock certificates, and all stationery and printing of the law department, except cost of printing briefs, legal forms, testimony, reports, etc.* [WE 54]

NOTE: The cost of dictionaries, periodicals, technical books, except law books, etc., should be charged to account WE 50, "General office supplies and expenses." 22.255 Other general expenses. This account should include all expenses of a general nature not properly chargeable to other accounts under General Expenses, such as the cost of publishing notices of stockholders' meetings, of elections of directors, of annual reports in newspapers, of dividends declared, and of other corporate and financial notices of a general character; fees and expenses paid to directors; contributions on account of catastrophies or epidemics; donations to local fire departments; the cost of exchange on checks or drafts, etc.** [WE 55]

V. CHARTER EXPENSES

22.256 Charters involving rent exclusively. This account should include all amounts paid by a carrier for the hire or rent of vessels or other floating equipment when, under the conditions of the charters, the payments are solely for the rent of the equipment.*+ [WE 56]

NOTE: When charters include both rent and the expense of maintenance, or rent and the expense of maintenance and operation, the rental portion, when separable, should also be included in this account.

22.257 Charters involving rent and maintenance. This account should include all amounts paid by a carrier for the hire or rent of vessels or other floating equipment when, under the conditions of the charters, the payments are for the rent and maintenance of the equipment.* [WE 57]

NOTE: This account is to be used when the expenses of maintenance are not separable from the rents; when they are separable, the rental portion only should be included in account WE 56, "Charters involving rent exclusively," and the appropriate accounts should be charged with the cost of maintenance.

22.258 Charters involving rent, maintenance, and operation. This account should include all amounts paid by a carrier for the hire or rent of vessels or other floating equipment when, under the conditions of the charters, the payments are for the rent, maintenance, and operation of the equipment.** [WE 58]

NOTE: This account is to be used when the expenses of maintenance and operation are not separable from the rents; when they are separable, the rental portion only should be included in account WE 56, "Charters involving rent exclusively," and the appropriate accounts should be charged with the cost of maintenance and operation.

SUBPART D-CLASSIFICATION OF INCOME AND PROFIT AND Loss ACCOUNTS

INTRODUCTION

22.00-7 Order of the Commission. It is ordered that (a) The Classification of Income and Profit and Loss Accounts, including the text, general instructions, and index therein, embodied in printed form,

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*For statutory citation, see note to § 22.00-1.

to be hereafter known as Classification of Income and Profit and Loss Accounts for Carriers by Water, First Issue, a copy of which is now before this Commission, be, and the same is hereby, approved; a copy thereof duly authenticated by the Secretary of the Commission be filed in its archives, and a second copy thereof, in like manner authenticated, be filed in the office of the Division of Carriers' Accounts; and each of said copies so authenticated and filed shall be deemed an original record thereof.

(b) The said Classification of Income and Profit and Loss Accounts, and the text pertaining thereto, be, and it is hereby, prescribed for the use of carriers by water having annual operating revenues exceeding $50,000, subject to the provisions of the amended Act to regulate commerce in the keeping and recording of all transactions reflected in the said Income and Profit and Loss Accounts; each and every such carrier and each and every receiver or operating trustee of any such carrier be required to keep all income and profit and loss accounts in conformity therewith; and a copy of the said Classification of Income and Profit and Loss Accounts for Carriers by Water, First Issue, be sent to each and every such carrier and to each and every receiver or operating trustee of any such carrier: Provided, however, That nothing in this order shall be construed as depriving a carrier of the right to make whatever analysis of income and profit and loss items it may deem proper for the information of stockholders or of officials who have the management of its property.

(c) July 1, 1913 is hereby fixed as the date on which the said Classification of Income and Profit and Loss Accounts for Carriers by Water, First Issue, shall become effective.* [Order adopting Classification of income and profit and loss accounts, ICC, June 17, 1913]

GENERAL INSTRUCTIONS-INCOME AND PROFIT AND LOSS ACCOUNTS

22.3-1 Income accounts defined. Income Accounts are those accounts designed to show the total amount of money that a company receives or becomes entitled to receive from its transportation and other operations during a given fiscal period, the return accrued during the period upon investments, and the disbursements and obligations incurred that affect the amounts so received or accrued. The net balance of Income (or loss) should be carried to the Profit and Loss Account.*tt

††In 88 22.3-1 to 22.3-7, inclusive, the numbers to the right of the dash correspond with the respective general instruction numbers in Classification of income and profit and loss accounts for carriers by water, Interstate Commerce Commission, June 17, 1913.

22.3-2 Profit and loss accounts defined. The Profit and Loss Accounts are those accounts designed to show the changes in the corporate surplus or deficit during a given fiscal period as affected by 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 with regard to matters not properly attributable to the period; or by miscellaneous gains or losses not provided for elsewhere and to show also the free surplus of the

*For statutory citation, see note to § 22.00–1.

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carrier at the date of the balance sheet. The Profit and Loss Account balance should be shown in the General Balance Sheet Statement under account WB 32, "Balance," or account WB 57, "Balance." *+

22.3-3 General ledger accounts. The accounts in the general ledger pertaining to Income or Profit and Loss should be kept in such form that the balances drawn therefrom may be readily classified in the accounts prescribed in this classification; and the titles of such general ledger accounts should give reference by number or title to the accounts prescribed herein in which they are included.*+

22.3-4 Income account on basis of accruals. The text in general provides that items affecting the Income Account shall be stated upon the basis of accruals. It will be noted, however, that exceptions have been made in a few instances in which it has seemed that to require the accrual basis would lead to erroneous results, or involve unwarranted refinements in accounting.*†

22.3-5 Sinking fund accruals. A separate account (WI 10) has been provided in the Income Account for the purpose of showing income from securities and other assets held in sinking and other reserve funds. Entries are to be made in this account showing the amount of income accrued on cash, securities (except those issued or assumed by the accounting company), and other assets held in such funds. No entry is to be made in this account, or in accounts representing interest on funded debt or dividends on stock, for interest or dividends on such securities as are issued or assumed by the accounting company and held by or for it.

Accounts are provided in both the Income Account and the Profit and Loss Account for appropriations of moneys and other assets to sinking funds. The amounts of such appropriations should be credited to balance-sheet account WB 56, "Reserves from income or surplus." *†

**

22.3-6 Auxiliary operations. Carriers by water operating facilities or rendering services other than those in connection with transportation by water or incidental thereto should treat such operations as auxiliary operations when the revenues and expenses thereof, if included in the carrier's accounts dealing with transportation by water, would impair the significance of statistics prepared from such accounts. Carriers should keep separate revenue and expense accounts for each operation conducted and include the aggregate of the revenue and the aggregate of the expenses of auxiliary operations in the respective accounts provided for them in the Income Statement. The following are some of the more important auxiliary operations conducted by carriers by water:

Amusement Parks and Resorts.

Cab and Omnibus Service.

Hotels and Restaurants.*t

22.3-7 Cancelation of conflicting previous instructions. The rules provided in this Classification of Income and Profit and Loss Accounts supersede any conflicting instructions in classifications and accounting forms previously issued for carriers by water.**

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*For statutory citation, see note to § 22.00-1.

INCOME ACCOUNTS

1. CREDITS

22.301 Water line operations-Revenues. This account should include the total operating revenues as shown in the accounts provided in the Classification of Operating Revenues for Carriers by Water.*† [WI 1]

*In §§ 22.301 to 22.332, inclusive, the numbers to the right of the decimal point are obtained by deleting WI and adding 300 to WI account numbers in Classification of income and profit and loss accounts for carriers by water, Interstate Commerce Commission, June 17, 1913. Cross references to accounts are made by citing the account number, e. g., account WI 16, instead of the corresponding section number (§ 22.316); account WP 11, instead of (§ 22.11); account WR 9, instead of (§ 22.109); account WE 56, instead of (§ 22.256); account WPL 12, instead of (§ 22.412); account WB 6 (a), instead of (§ 22.506 (a)).

22.302 Auxiliary operations-Revenues. This account should include revenues derived from auxiliary operations.** [WI 2]

22.303 Income from lease of line. This account should include the amount accrued as rent of line (including floating equipment and other water-line property covered by the contract) owned or controlled by the accounting company and held by another company under lease or other agreement granting exclusive use and control for operating purposes.

This account should include the entire amount of rent receivable by the lessor according to the terms of lease or other agreement, whether it is paid to the lessor in cash or is disbursed by the lessee for the account of the lessor as interest on funded debt, guaranteed dividends on stock, or otherwise.** [WI 3]

NOTE A: If floating equipment is included in the lease of line, the revenue from the charter of such equipment should be credited by the lessor to this account, except when the charter is for a period less than 1 year, in which case the revenue from the charter should be credited to operating revenue account WR 11, "Charters involving rent exclusively."

NOTE B: When taxes on leased property are assumed by the lessor, the accruals of such taxes should be included in the lessor's account WI 16, "Water line tax accruals."

NOTE C: If property, the rent of which is chargeable to account WI 17, “Rent of leased lines," is sublet by the accounting company, the rent receivable therefor should be credited to this account.

NOTE D: If, under the terms of a lease, the deficit (or any portion of it) resulting from the lessee company's operations of the property leased is payable by the lessor company, the amount should be charged to this account by the lessor.

22.304 Miscellaneous rent income. This account should include such rents of real property carried in the real property and equipment accounts as are not provided for in account WI 3, "Income from lease of line." To this account should be charged the cost of maintenance of the property rented, also incidental expenses in connection with such property, such as the cost of negotiating contracts, advertising for tenants, fees paid conveyancers, collectors' commissions, and analogous items.*† ^ [WI 4]

NOTE A: If the expenses of the real property leased can not be separated from the expenses of real property used in the company's operations, the rents should be credited to revenue account WR 9, "Rents of buildings and other property." NOTE B: If a service (other than transportation service) is performed by the accounting company in connection with real property, the income should not be

*For statutory citation, see note to § 22.00-1.

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included in this account, but the service should be treated as an auxiliary operation.

NOTE C: If property, the rent of which is chargeable to account WI 18, "Miscellaneous rents," is sublet by the accounting company, the rent receivable therefor should be credited to this account.

NOTE D: Taxes on real property, the rent of which is properly creditable to this account should be charged to account WI 16, "Water line tax accruals."

NOTE E: The rent of property carried in balance-sheet account WB 6 (a), “Miscellaneous investments—physical property," should not be included in this account, but in account WI 5, "Net income from miscellaneous physical property," or WI 20, "Net loss on miscellaneous physical property," as may be appropriate. 22.305 Net income from miscellaneous physical property. This account should include the net credit balance of the revenues or income from, and the expenses (excluding taxes) of, physical property carried in balance-sheet account WB 6 (a), "Miscellaneous investments-Physical property."*† [WI 5]

NOTE: If the net balance is a debit, it should be shown under account WI 20, "Net loss on miscellaneous physical property."

22.306 Separately operated properties-Profit. This account should include amounts receivable under the terms of agreements or contracts whereby the surplus resulting from the operation of properties of other companies having a separate corporate existence and operated separately is to be paid in whole or in part to the accounting company.

In determining the amount receivable by the accounting company, consideration should be given not only to the operating revenues and items of income, but also to operating expenses and income deductions which affect that amount.* [WI 6]

NOTE A: The amount payable by the operating company should be charged by it to account WI 25, "Income transferred to other companies."

NOTE B: Dividends or other returns upon securities issued by separately operated companies and held or controlled by the accounting company should be included in account WI 7, "Dividend income," WI 8, "Income from funded securities," or WI 9, "Income from unfunded securities and accounts," as may be appropriate.

22.307 Dividend income. This account should include dividends declared on stocks of other companies, such securities being owned by the accounting company (held in its treasury or deposited in trust), or being stocks controlled through lease or otherwise, the income from which is the property of the accounting company. Accruals of guaranteed dividends may be included in this account if their payment is reasonably assured.** [WI 7]

NOTE A: This account should not include credits for dividends on stocks issued or assumed by the accounting company and owned by it, whether held in its treasury, in special deposits, or in sinking or other reserve funds, or pledged as collateral.

NOTE B: Dividends on stocks of other companies held in sinking or other reserve funds should be credited to account WI 10, "Income from sinking and other reserve funds."

22.308 Income from funded securities. This account should include interest on funded securities and debenture stock of other companies, such securities being owned by the accounting company (held in its treasury or deposited in trust) or being controlled through lease

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*For statutory citation, see note to § 22.00-1.