§  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]