Sec. 32.9000  Glossary of terms.

    When used in this system of accounts:
    Accelerated depreciation means a depreciation method or period of 
time, including the treatment given cost of removal and gross salvage, 
used in calculating depreciation deductions on income tax returns which 
is different from the depreciation method or period of time prescribed 
by this Commission for use in calculating depreciation expense recorded 
in a company's books of account.
    Account means a specific element of a chart of accounts used to 
record, classify and accumulate similar financial transactions resulting 
from the operations of the entity. ``Accounts'' or ``these accounts'' 
refer to the accounts of this system of accounts.
    Accounting system means the total set of interrelated principles, 
rules, requirements, definitions, accounts, records, procedures and 
mechanisms necessary to operate and evaluate the entity from a financial 
perspective. An accounting system generally consists of a chart of 
accounts, various parallel subsystems and subsidiary records. An 
accounting system is utilized to provide the necessary financial 
information to users to meet judiciary and other responsibilities.
    Affiliated companies means companies that directly or indirectly 
through one or more intermediaries, control or are controlled by, or are 
under common control with, the accounting company. See also Control.
    Amortization means the systematic recoveries, through ratable 
charges to expense, of the cost of assets.
    Associated equipment means that equipment which functions with a 
specific type of plant or with two (2) or more types of plant, e.g., 
switching equipment, network power equipment, circuit equipment, common 
channel network signaling equipment or network operations equipment. 
Associated equipment shall be classified to the account appropriate for 
the type of equipment with which it is predominately used rather than on 
its own characteristics.
    Illustrative examples of associated equipment are:

Alarm and signal apparatus
Auxiliary framing
Cable and cable racks
Distributing frames and equipment thereon
Frame and aisle lighting equipment (not permanently attached to the 
building)
Relay racks and panels

    Basic service area means the minimum specified calling area for 
which a tariff is prescribed.
    Book cost means the amount at which property is recorded in these 
accounts, without deduction of related allowances.
    Common carrier or carrier means any person engaged as a common 
carrier for hire, in interstate or foreign communication by wire or 
radio or in interstate or foreign radio transmission of energy, except 
where reference is made to common carriers not subject to this Act; but 
a person engaged in radio broadcasting shall not, insofar as such person 
is so engaged, be deemed a common carrier.
    Company or the company, when not otherwise indicated in the context, 
means the accounting entity. It includes such unincorporated entities 
which may be subject to the Communications Act of 1934, as amended.
    Control (including the terms ``controlling,'' ``controlled by,'' and 
``under common control with'') means the possession directly or 
indirectly, of the power to direct or cause the direction of the 
management and policies of a company, whether such power is exercised 
through one or more intermediary companies, or alone, or in conjunction 
with, or pursuant to an

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agreement with, one or more other companies, and whether such power is 
established through a majority or minority ownership or voting of 
securities, common directors, officers, or stockholders, voting trusts, 
holding trusts, affiliated companies, contract, or any other direct or 
indirect means.
    Cost, except as applied to telecommunications plants, franchises, 
and patent rights, means the amount of money actually paid (or the 
current money value of any consideration other than money exchanged) for 
property or services. See also Original Cost.
    Cost of removal means the cost of demolishing, dismantling, 
removing, tearing down, or otherwise disposing of telecommunications 
plant and recovering the salvage, including the cost of transportation 
and handling incident thereto.
    Depreciation means the loss not restored by current maintenance, 
incurred in connection with the consumption or prospective retirement of 
telecommunications plant in the course of service from causes which are 
known to be in current operation, against which the company is not 
protected by insurance, and the effect of which can be forecast with a 
reasonable approach to accuracy. Among the causes to be given 
consideration are wear and tear, decay, action of the elements, 
inadequacy, obsolescence, changes in technology, changes in demand and 
requirements of public authorities.
    Entity means a legal enterprise (common carrier) engaged in 
interstate communications within the meaning of the Communications Act 
of 1934, as amended.
    Group plan, as applied to depreciation accounting, means the plan 
under which depreciation charges are accrued upon the basis of the 
original cost of all property included in each depreciable plant 
account, using the average service life thereof properly weighted, and 
upon the retirement of any depreciable property its cost is charged to 
the depreciation reserve whether or not the particular item has attained 
the average service life.
    Indexed revenue threshold for a given year means $100 million, 
adjusted for inflation, as measured by the Department of Commerce Gross 
Domestic Product Chain-type Price Index (GDP-CPI), for the period from 
October 19, 1992 to the given year. The indexed revenue threshold for a 
given year shall be determined by multiplying $100 million by the ratio 
of the annual value of the GDP-CPI for the given year to the estimated 
seasonally adjusted GDP-CPI on October 19, 1992. The indexed revenue 
threshold shall be rounded to the nearest $1 million. The seasonally 
adjusted GDP-CPI on October 19, 1992 is determined to be 100.69.
    Intangible property means assets that have no physical existence but 
instead have value because of the rights which ownership confers.
    Intrasystems means assets consisting of:
    (1) PBX and Key System Common Equipment (a switchboard or switching 
equipment shared by all stations);
    (2) Associated CPE station equipment (usually telephone or Key 
Telephone Systems); and
    (3) Intrasystem wiring (all cable or wiring and associated 
components which connect the common equipment and the station equipment, 
located on the customer's side of the demarcation point).
    An intrasystem does not include property, plant or equipment which 
are not solely dedicated to its operation.
    Minor items, as applied to depreciable telecommunications plant, 
means any part or element of such plant, which when removed, (with or 
without replacement) does not initiate retirement accounting.
    Original cost or cost, as applied to telecommunications plant, 
rights of way and other intangible property, means the actual money cost 
of (or the current money value of any consideration other than money 
exchanged for) property at the time when it was first dedicated to use 
by a regulated telecommunications entity, whether the accounting company 
or by predecessors.

For the application of this definition to property acquired from 
predecessors see Sec. 32.2000(b)(1) of subpart C. Note also the 
definition of Cost in this section.

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    Plant retired means plant which has been removed, sold, abandoned, 
destroyed, or otherwise withdrawn from service.
    Retirement units, as applied to depreciable telecommunications 
plant, means those items of plant which when removed (with or without 
replacement) cause the initiation of retirement accounting entries.
    Salvage value means the amount received for property retired, if 
sold, or if retained for reuse, the amount at which the material 
recovered is chargeable to Account 1220, Material and Supplies, or other 
appropriate account.
    Straight-line method, as applied to depreciation accounting, means 
the plan under which the cost of property is charged to operating 
expenses and credited to accumulated depreciation through equal annual 
charges as nearly as may be during its service life.
    Subsidiary record means accumulation of detailed information which 
is required by this Commission to be maintained in support of entries to 
the accounts.
    Subsidiary record categories means those segregations of certain 
regulated costs, expenses and revenues which must be maintained and are 
subject to specific reporting requirements of this Commission.
    Subsystems, parallel mechanisms means processes or procedures which 
augment the use of a chart of accounts in the financial operation of the 
entity. These subsystems operate on and/or process account and 
subsidiary record information for specific purposes.
    Telecommunications means any transmission, emission, or reception of 
signs, signals, writing, images or sounds or intelligence of any nature 
by wire, radio, visual or other electromagnetic systems. This 
encompasses the aggregate of several modes of conveying information, 
signals or messages over a distance. Included in the telecommunications 
industry is the transmitting, receiving, or exchanging of information 
among multiple locations. The minimum elements required for the 
telecommunications process to occur are a message source, a transmission 
medium and a receiver.
    Time of installation means the date at which telecommunications 
plant is placed in service.
    Time of retirement means the date at which telecommunications plant 
is retired from service.
    Tangible property means assets characterized by physical existence, 
such as land, buildings, equipment, furniture, fixtures and tools.
[ 51 FR 43499 , Dec. 2, 1986, as amended at  61 FR 50245 , Sept. 25, 1996; 
 62 FR 39778 , July 24, 1997;  62 FR 51064 , Sept. 30, 1997]

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