§ 32.7400   Nonoperating taxes.

   This account shall include taxes arising from activities which are not
   a part of the central operations of the entity.

   (a) This account shall be charged and Account 4330, Unamortized
   nonoperating investment tax credits—net, shall be credited with
   investment tax credits generated from qualified expenditures related to
   other operations which the company has elected to defer rather than
   recognize currently in income.

   (b) This account shall be credited and Account 4330 shall be charged
   with the amortization of each year's investment tax credits included in
   such accounts relating to amortization of previously deferred
   investment tax credits of other property or regulated property, the
   amortization of which does not serve to reduce costs of service (but
   the unamortized balance does reduce rate base) for ratemaking purposes.
   Such amortization shall be determined with reference to the period of
   time used for computing book depreciation on the property with respect
   to which the tax credits relate.

   (c) This account shall be charged and Account 4070, Income
   taxes—accrued, shall be credited for the amount of nonoperating Federal
   income taxes and state and local income taxes for the current period.
   This account shall also reflect subsequent adjustments to amounts
   previously charged.

   (d) Taxes shall be accrued each month on an estimated basis and
   adjustments made as more current data becomes available.

   (e) Companies that adopt the flow-through method of accounting for
   investment tax credits shall reduce the calculated provision in this
   account by the entire amount of the credit realized during the year.
   Tax credits, other than investment tax credits, if normalized, shall be
   recorded consistent with the accounting for investment tax credits.

   (f) No entries shall be made to this account to reflect interperiod tax
   allocation.

   (g) Taxes (both Federal and state) shall be accrued each month on an
   estimated basis and adjustments made as later data becomes available.

   (h) This account shall be charged and Account 4080, Other
   taxes—accrued, shall be credited for all nonoperating taxes, other than
   Federal, state and local income taxes, and payroll related taxes for
   the current period. Among the items includable in this account are
   property, gross receipts, franchise and capital stock taxes. This
   account shall also reflect subsequent adjustments to amounts previously
   charged.

   (i) This account shall be charged or credited, as appropriate, with
   contra entries recorded to the following accounts for nonoperating tax
   expenses that has been deferred in accordance with § 32.22: 4110 Net
   Current Deferred Nonoperating Income Taxes, 4350 Net Noncurrent
   Deferred Nonoperating Income Taxes.

   (j) Subsidiary record categories shall be maintained to distinguish
   between property and nonproperty related deferrals and so that the
   company may separately report the amounts contained herein that relate
   to Federal, state and local income taxes. Such subsidiary record
   categories shall be reported as required by part 43 of this chapter.

   [ 67 FR 5699 , Feb. 6, 2002]

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