Sec.  32.2690   Intangibles.

   (a) This account shall include the cost of organizing and incorporating the
   company, the original cost of government franchises, the original cost of
   patent rights, and other intangible property having a life of more than one
   year  and  used  in  connection  with the company's telecommunications
   operations.

   (b) Class A companies, except mid-sized incumbent local exchange carriers,
   shall maintain subsidiary records for general purpose computer software and
   for network software. Subsidiary records for this account shall also include
   a description of each class of all other tangible property.

   (c) The cost of other intangible assets, not including software, having a
   life  of  one  year or less shall be charged directly to Account 6564,
   Amortization expense—intangible. Such intangibles acquired at small cost may
   also be charged to Account 6564, irrespective of their term of life. The
   cost of software having a life of one year or less shall be charged directly
   to the applicable expense account with which the software is associated.

   (d) The amortization associated with the costs recorded in the Intangibles
   account will be credited directly to this asset account, leaving a balance
   representing the unamortized cost.

   (e) This account shall not include any discounts on securities issued, nor
   shall it include costs incident to negotiating loans, selling bonds or other
   evidences  of  debt, or expenses in connection with the authorization,
   issuance, sale or resale of capital stock.

   (f) When charges are made to this account for expenses incurred in mergers,
   consolidations, or reorganizations, amounts previously included in this
   account on the books of the various companies concerned shall not be carried
   over.

   (g) Franchise taxes payable annually or more frequently shall be charged to
   Account 7240, Operating other taxes.

   (h) This account shall not include the cost of plant, material and supplies,
   or equipment furnished to municipalities or other governmental authorities
   when given other than as initial consideration for franchises or similar
   rights. (Note also Account 6720, General & administrative).

   (i) This account shall not include the original cost of easements, rights of
   way, and similar rights in land having a term of more than one year. Such
   amounts shall be recorded in Account 2111, Land, or in the appropriate
   outside  plant  account  (see  Accounts  2411 through 2441), or in the
   appropriate central office account (see Accounts 2211 through 2232).

   [ 67 FR 5687 , Feb. 6, 2002, as amended at  69 FR 53649 , Sept. 2, 2004]