§  32.7300   Nonoperating income and expense.

   This account shall be used to record the results of transactions,
   events and circumstances affecting the company during a period and
   which are not operational in nature. This account shall include such
   items as nonoperating taxes, dividend income and interest income.
   Whenever practicable, the inflows and outflows associated with a
   transaction or event shall be matched and the result shown as a net
   gain or loss. This account shall include the following:

   (a) Dividends on investments in common and preferred stock, which is
   the property of the company, whether such stock is owned by the company
   and held in its treasury, or deposited in trust including sinking or
   other funds, or otherwise controlled.

   (b) Dividends received and receivable from affiliated companies
   accounted for on the equity method shall be included in Account 1410,
   Other noncurrent assets, as a reduction of the carrying value of the
   investments.

   (c) Interest on securities, including notes and other evidences of
   indebtedness, which are the property of the company, whether such
   securities are owned by the company and held in its treasury, or
   deposited in trust including sinking or other funds, or otherwise
   controlled. It shall also include interest on cash bank balances,
   certificates of deposits, open accounts, and other analogous items.

   (d) For each month the applicable amount requisite to extinguish,
   during the interval between the date of acquisition and date of
   maturity, the difference between the purchase price and the par value
   of securities owned or held in sinking or other funds, the income from
   which is includable in this account. Amounts thus credited or charged
   shall be concurrently included in the accounts in which the securities
   are carried.

   (e) Amounts charged to the telecommunications plant under construction
   account related to allowance for funds used during construction. (See
   § 32.2000(c)(2)(x).)

   (f) Gains or losses resulting from:

   (1) The disposition of land or artworks;

   (2) The disposition of plant with traffic;

   (3) The disposition of nonoperating telecommunications plant not
   previously used in the provision of telecommunications services.

   (g) All other items of income and gains or losses from activities not
   specifically provided for elsewhere, including representative items
   such as:

   (1) Fees collected in connection with the exchange of coupon bonds for
   registered bonds;

   (2) Gains or losses realized on the sale of temporary cash investments
   or marketable equity securities;

   (3) Net unrealized losses on investments in current marketable equity
   securities;

   (4) Write-downs or write-offs of the book costs of investment in equity
   securities due to permanent impairment;

   (5) Gains or losses of nonoperating nature arising from foreign
   currency exchange or translation;

   (6) Gains or losses from the extinguishment of debt made to satisfy
   sinking fund requirements;

   (7) Amortization of goodwill;

   (8) Company's share of the earnings or losses of affiliated companies
   accounted for on the equity method; and

   (9) The net balance of the revenue from and the expenses (including
   depreciation, amortization and insurance) of property, plant, and
   equipment, the cost of which is includable in Account 2006,
   Nonoperating plant.

   (h) Costs that are typically given special regulatory scrutiny for
   ratemaking purposes. Unless specific justification to the contrary is
   given, such costs are presumed to be excluded from the costs of service
   in setting rates.

   (1) Lobbying includes expenditures for the purpose of influencing
   public opinion with respect to the election or appointment of public
   officials, referenda, legislation, or ordinances (either with respect
   to the possible adoption of new referenda, legislation or ordinances,
   or repeal or modification of existing referenda, legislation or
   ordinances) or approval, modification, or revocation of franchises, or
   for the purpose of influencing the decisions of public officials. This
   also includes advertising, gifts, honoraria, and political
   contributions. This does not include such expenditures which are
   directly related to communications with and appearances before
   regulatory or other governmental bodies in connection with the
   reporting utility's existing or proposed operations;

   (2) Contributions for charitable, social or community welfare purposes;

   (3) Membership fees and dues in social, service and recreational or
   athletic clubs and organizations;

   (4) Penalties and fines paid on account of violations of statutes. This
   account shall also include penalties and fines paid on account of
   violations of U.S. antitrust statutes, including judgements and
   payments in settlement of civil and criminal suits alleging such
   violations; and

   (5) Abandoned construction projects.

   (i) Cash discounts on bills for material purchased shall not be
   included in this account.

   [ 67 FR 5698 , Feb. 6, 2002]