Goto Section: 32.1 | 32.3 | Table of Contents
FCC 32.2
Revised as of October 1, 2010
Goto Year:2009 |
2011
§ 32.2 Basis of the accounts.
(a) The financial accounts of a company are used to record, in monetary
terms, the basic transactions which occur. Certain natural groupings of
these transactions are called (in different contexts) transaction
cycles, business processes, functions or activities. The concept,
however, is the same in each case; i.e., the natural groupings
represent what happens within the company on a consistent and
continuing basis. This repetitive nature of the natural groupings, over
long periods of time, lends an element of stability to the financial
account structure.
(b) Within the telecommunications industry companies, certain recurring
functions (natural groupings) do take place in the course of providing
products and services to customers. These accounts reflect, to the
extent feasible, those functions. For example, the primary bases of the
accounts containing the investment in telecommunications plant are the
functions performed by the assets. In addition, because of the
anticipated effects of future innovations, the telecommunications plant
accounts are intended to permit technological distinctions. Similarly,
the primary bases of plant operations, customer operations and
corporate operations expense accounts are the functions performed by
individuals. The revenue accounts, on the other hand, reflect a market
perspective of natural groupings based primarily upon the products and
services purchased by customers.
(c) In the course of developing the bases for this account structure,
several other alternatives were explored. It was, for example,
determined that, because of the variety and continual changing of
various cost allocation mechanisms, the financial accounts of a company
should not reflect an a priori allocation of revenues, investments or
expenses to products or services, jurisdictions or organizational
structures. (Note also § 32.14 (c) and (d) of subpart B.) It was also
determined that costs (in the case of assets) should not be recorded
based solely upon physical attributes such as location, description or
size.
(d) Care has been taken in this account structure to avoid confusing a
function with an organizational responsibility, particularly as it
relates to the expense accounts. Whereas in the past, specific
organizations may have performed specific functions, the future
environment with its increasing mechanization and other changes will
result in entirely new or restructured organizations. Thus, any
relationships drawn between organizations and accounts would become
increasingly meaningless with the passage of time.
(e) These accounts, then, are intended to reflect a functional and
technological view of the telecommunications industry. This view will
provide a stable and consistent foundation for the recording of
financial data.
(f) The financial data contained in the accounts, together with the
detailed information contained in the underlying financial and other
subsidiary records required by this Commission, will provide the
information necessary to support separations, cost of service and
management reporting requirements. The basic account structure has been
designed to remain stable as reporting requirements change.
Goto Section: 32.1 | 32.3
Goto Year: 2009 |
2011
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