§  32.4999   General.

   (a) Purpose of revenue accounts. The revenue accounts are intended to
   include the actual cash inflows (or equivalents) that have or will
   occur as a result of the company's ongoing major or central operations
   during the period. They will include the revenues which arise from
   furnishing regulated telecommunications services to others, from
   directory advertising, rentals of telecommunications assets and from
   providing other services which are directly associated with the
   provision of regulated telecommunications services.

   (b) Deductions from revenue. Corrections of overcharges, authorized
   refunds of overcollections previously credited to revenue, authorized
   refunds and adjustments on account of failure in service, and other
   corrections shall be charged to the revenue account previously credited
   with the amounts involved.

   (c) Commissions. Commissions paid to others or employees in place of
   compensation or salaries for services rendered, such as public
   telephone commissions, shall be charged to Account 6623, Customer
   services, and not to the revenue accounts. Other commissions shall be
   charged to the appropriate expense accounts.

   (d) Revenue recognition. Credits shall be made to the appropriate
   revenue accounts when such revenue is actually earned. When the billing
   cycle encompasses more than one accounting period, adjustments are
   necessary to properly recognize the revenue applicable to the current
   accounting period under report. Revenues recorded under the terms of
   two-tier contracts or other variable payment plans should be deferred,
   if necessary, and recognized ratably with expenses over the terms of
   the related contract. Any amounts deferred shall be credited to Account
   4300, Other long-term liabilities and deferred credits.

   (e) Contractual arrangements. Charges and credits resulting from
   activities associated with the provisions of regulated
   telecommunications services shall be recorded in a manner consistent
   with the nature of the underlying contractual arrangements. The charges
   and credits resulting from expense sharing or apportionment
   arrangements associated with the provision of regulated
   telecommunications services shall be recorded in the detailed regulated
   accounts. Charges and credits resulting from revenue settlement
   agreements or other revenue pooling arrangements associated with the
   provision of regulated telecommunications services shall be included in
   the appropriate revenue accounts. Those charges and credits resulting
   from contractual revenue pooling and/or sharing agreements shall be
   recorded in each prescribed revenue account and prescribed subsidiary
   record categories thereof to the extent that each is separately
   identifiable in the settlement process. It is not intended that
   settlement amounts be allocated or generally spread to the individual
   revenue accounts where they are not separately identifiable in the
   settlement process. When the settlement amounts are not identifiable by
   a revenue account they shall be recorded in Account 5060, Other basic
   area revenue, 5105, Long distance message revenue, or 5200,
   Miscellaneous revenue, as appropriate.

   (f) Subsidiary records--jurisdictional subdivisions and
   interconnection. Subsidiary record categories shall be maintained in
   order that the company may separately report revenues derived from
   charges imposed under intrastate, interstate and international tariff
   filings. Class A carriers shall also maintain subsidiary record
   categories in order that the companies may separately report
   interconnection revenues derived from the following categories:
   Unbundled network element revenues, Resale revenues, Reciprocal
   compensation revenues, and Other interconnection revenues. Such
   subsidiary record categories shall be reported as required by part 43
   of this Commission's Rules and Regulations.

   (g) Structure of revenue accounts. (1) The revenue section of the
   system of accounts shall be organized by revenue group summary account,
   account and subsidiary record category (if required).

   (2) The revenue section of this system of accounts shall be comprised
   of six major groups--Local Network Services Revenues, Network Access
   Services Revenues, Long Distance Network Services Revenues,
   Miscellaneous Revenues, Nonregulated revenues, and Uncollectible
   Revenues, which shall be considered as a revenue group for the purposes
   of the construction of the system.

   (3) Accounts shall be maintained as prescribed in this Section subject
   to the conditions described in section 32.13 of subpart B. In certain
   instances, subsidiary record categories may be required below the
   account level by this system of accounts or by Commission order.

   (h) Local Network Services revenues. Local Network Services revenues
   (Accounts 5001 through 5060) shall include revenues derived from the
   provision of service and equipment entirely within the basic service
   area. That area is defined as the normal boundaries for local calling
   plus Extended Area Service (EAS) boundaries as they apply to that
   service. It includes revenues derived from both local private network
   service and local public network services as well as from customer
   premises facilities services. Local revenues include associated charges
   such as one-time service connection or termination charges and
   secondary features such as call waiting.

   (i) Network Access revenues. (1) Network Access revenues (Accounts
   5081-5083) shall include revenues derived from the provision of
   exchange access services to an interexchange carrier or to an end user
   of telecommunications services beyond the exchange carrier's network.

   (2) Billing and collections service provided under exchange access
   tariffs shall be included in the Miscellaneous Revenues Group.

   (j) Long Distance Network Service revenues. Long Distance Network
   Service revenues shall include revenues derived from the provision of
   services beyond the basic service area, whether message or flat-rate
   and including public network switching as well as private.

   (k) Miscellaneous revenues. Miscellaneous revenues are those revenues
   derived from the provision of regulated products and services provided
   under tariff or contract but not contained elsewhere. They shall also
   include operating revenue derived from activities performed incident to
   the company's tariffed telecommunications operations which, though
   non-tariffed, are included in the regulatory process.

   (l) Nonregulated revenues. The nonregulated revenue account shall be
   used for nonregulated operating revenues when a nonregulated activity
   involves the common or joint use of assets or resources in the
   provision of regulated and nonregulated products or services as
   required in § 32.23(c) of this subpart. Revenues from nontariffed
   activities offered incidental to tariffed services may be accounted for
   as regulated revenues, provided the activities are outgrowths of
   regulated operations and the revenues do not exceed, in the aggregate,
   one percent of total revenues for three consecutive years. Such
   activities must be listed in the Commission-approved Cost Allocation
   Manual for any company required to file a Cost Allocation Manual.

   (m) Uncollectible revenues . Uncollectible revenues shall include
   amounts originally credited to the revenue accounts which have proved
   impracticable of collection.

   (n) Revenue accounts to be maintained.
   Account title Class A
   account Class B
   account
   Local network services revenues:
   Basic local service revenue 5000
   Basic area revenue 5001
   Private line revenue 5040
   Other basic area revenue 5060
   Network access service revenues:
   End user revenue 5081 5081
   Switched access revenue 5082 5082
   Special access revenue 5083 5083
   Long distance network services revenues:
   Long distance message revenue 5100 5100
   Miscellaneous revenues:
   Miscellaneous revenue 5200 5200
   Directory revenue 5230
   Nonregulated revenues:
   Nonregulated operating revenue 5280 5280
   Uncollectible revenues:
   Uncollectible revenue 5300 5300

   [ 51 FR 43499 , Dec. 2, 1986, as amended at  53 FR 49322 , Dec. 7, 1988;  59 FR 46930 , Sept. 13, 1994;  64 FR 50008 , Sept. 15, 1999;  67 FR 5690 , Feb.
   6, 2002;  69 FR 53649 , Sept. 2, 2004]