Goto Section: 32.21 | 32.23 | Table of Contents
FCC 32.22
Revised as of October 2, 2015
Goto Year:2014 |
2016
§ 32.22 Comprehensive interperiod tax allocation.
(a) Companies shall apply interperiod tax allocation (tax normalization) to
all book/tax temporary differences which would be considered material for
published financial report purposes. Furthermore, companies shall also apply
interperiod tax allocation if any item or group of similar items when
aggregated would yield debit or credit entries which exceed or would exceed
5 percent of the gross deferred income tax expense debits or credits during
any calendar year over the life of the temporary difference. The tax effects
of book/tax temporary differences shall be normalized and the deferrals
shall be included in the following accounts:
4100, Net Current Deferred Operating Income Taxes;
4110, Net Current Deferred Nonoperating Income Taxes;
4340, Net Noncurrent Deferred Operating Income Taxes;
4350, Net Noncurrent Deferred Nonoperating Income Taxes.
In lieu of the accounting prescribed herein, any company shall treat the
increase or reduction in current income taxes payable resulting from the use
of flow through accounting in prior years as an increase or reduction in
current tax expense.
(b) Supporting documentation shall be maintained so as to separately
identify the amount of deferred taxes which arise from the use of an
accelerated method of depreciation.
(c) Subsidiary records shall be used to reduce the deferred tax assets
contained in the accounts specified in paragraph (a) of this section when it
is likely that some portion or all of the deferred tax asset will not be
realized. The amount recorded in the subsidiary record should be sufficient
to reduce the deferred tax asset to the amount that is likely to be
realized.
(d) The records supporting the activity in the deferred income tax accounts
shall be maintained in sufficient detail to identify the nature of the
specific temporary differences giving rise to both the debits and credits to
the individual accounts.
(e) Any company that uses accelerated depreciation (or recognizes taxable
income or losses upon the retirement of property) for income tax purposes
shall normalize the tax differentials occasioned thereby as indicated in
paragraphs (e)(1) and (e)(2) of this section.
(1) With respect to the retirement of property the book/tax difference
between (i) the recognition of proceeds as income and the accrual for
salvage value and (ii) the book and tax capital recovery, shall be
normalized.
(2) Records shall be maintained so as to show the deferred tax amounts by
vintage year separately for each class or subclass of eligible depreciable
telephone plant for which an accelerated method of depreciation has been
used for income tax purposes. When property is transferred to nonregulated
activities, the associated deferred income taxes and unamortized investment
tax credits shall also be identified and transferred to the appropriate
nonregulated accounts.
(f) The tax differentials to be normalized as specified in this section
shall also encompass the additional effect of state and local income tax
changes on Federal income taxes produced by the provision for deferred state
and local income taxes for book/tax temporary differences related to such
income taxes.
(g) Companies that receive the tax benefits from the filing of a
consolidated income tax return by the parent company, (pursuant to closing
agreements with the Internal Revenue Service, effective January 1, 1966)
representing the deferred income taxes from the elimination of intercompany
profits for income tax purposes on sales of regulated equipment, may credit
such deferred taxes directly to the plant account which contains such
intercompany profit rather than crediting such deferred taxes to the
applicable accounts in paragraph (a) of this section. If the deferred income
taxes are recorded as a reduction of the appropriate plant accounts, such
reduction shall be treated as reducing the original cost of the plant and
accounted for as such.
[ 51 FR 43499 , Dec. 2, 1986, as amended at 59 FR 9418 , Feb. 28, 1994]
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Goto Section: 32.21 | 32.23
Goto Year: 2014 |
2016
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