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through Profit and Loss, as may be appropriate. If desirable to retain a record of the item in the balance sheet, it may be stated at a nominal value in account No. 722, "Other deferred assets," the difference between the full amount of the item and such nominal value being charged to Profit and Loss.**

10.7-8 Joint liabilities. The accounting company shall state as a liability in its balance sheet the total par value of securities jointly issued by it and others, and it shall include in account No. 722, "Other deferred assets," the portion of such liability which, under the joint arrangement, it is expected will be liquidated by the other party or parties to the joint arrangement.*†

GENERAL BALANCE SHEET ACCOUNTS

10.700 Form of general balance sheet statement.

EXPLANATORY NOTE: The classified form of general balance-sheet statement is designed to show the financial condition of the accounting company at any specified date.

Investments:

ASSET SIDE

701. Investment in road and equipment.
702. Improvements on leased railway property.
703. Sinking funds.

Total book assets at date. (In short column.)
Carrier's own issues at date. (In short column.)
Other assets at date. (In long column.)
704. Deposits in lieu of mortgaged property sold.

Total book assets at date. (In short column.)
Carrier's own issues at date. (In short column.)
Other assets at date. (In long column.)

705. Miscellaneous physical property.

706. Investments in affiliated companies

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Carrier's own issues at date. (In short column.)
Other assets at date. (In long column.)

712. Loans and bills receivable.

713. Traffic and car-service balances receivable.

714. Net balance receivable from agents and conductors.

715. Miscellaneous accounts receivable.

716. Material and supplies.

717. Interest and dividends receivable.

718. Rents receivable.

719. Other current Assets.

Total.

*For statutory citation, see note to § 10.00-1.

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Deferred assets:

720. Working fund advances.

721. Insurance and other funds.

Total book assets at date. (In short column.)
Carrier's own issues at date. (In short column.)
Other assets at date. (In long column.)

722. Other deferred assets.

Total.

Unadjusted debits:

723. Rents and insurance premiums paid in advance.

724. Discount on capital stock.

725. Discount on funded debt.

726. Property abandoned chargeable to operating expenses. 7262. Equipment retired.

727. Other unadjusted debits.

728. Securities issued or assumed-Unpledged. 729. Securities issued or assumed-Pledged. Total.

(In short column only.)

(In short column only.)

LIABILITY SIDE

Stock:

751. Capital stock

Book liability at date. (In short column.)

Held by or for carrier at date. (In short column.)

Actually outstanding at date.

752. Stock liability for conversion.

753. Premium on capital stock.

Total.

Governmental grants:

754. Grants in aid of construction.

Long term debt:

755. Funded debt unmatured―

(In long column.)

Book liability at date. (In short column.)

Held by or for carrier at date. (In short column.)
Actually outstanding at date. (In long column.)

756. Receiver's certificates.

757. Nonnegotiable debt to affiliated companies—

(a) Notes.

(b) Open accounts.

Total.

Current liabilities:

758. Loans and bills payable.

759. Traffic and car-service balances payable.

760. Audited accounts and wages payable.

761. Miscellaneous accounts payable.

762. Interest matured unpaid.

763. Dividends matured unpaid.

764. Funded debt matured unpaid.

765. Unmatured dividends declared.
766. Unmatured interest accrued.
767. Unmatured rents accrued.
768. Other current liabilities.

Total.

Deferred liabilities:

769. Liability for provident funds.

770. Other deferred liabilities.

Total.

Unadjusted credits:

771. Tax liability.

772. Premium on funded debt.

773. Insurance and casualty reserves

774. Maintenance reserves.

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Unadjusted credits-Continued.

775. Accrued depreciation-Road.

776. Accrued depreciation-Equipment.

777. Accrued depreciation-Miscellaneous physical property. 778. Other unadjusted credits.

Total.

Corporate surplus:

*

779. Additions to property through income and surplus. 780. Funded debt retired through income and surplus. 781. Sinking fund reserves.

782. Miscellaneous fund reserves.

783. Appropriated surplus not specifically invested. Total appropriated surplus.

784. Profit and loss-Balance.

Total corporate surplus.

[Form of general balance sheet statement, general balance sheet accounts for steam roads, ICC, May 19, 1914]

DEBITS

10.701 Investment in road and equipment. This account shall include the accounting company's investment in road and equipment (including that held under contract for purchase) in existence at the date of the balance sheet. The accounting company's records shall be kept in such manner as to show the amount credited to this account subsequent to June 30, 1914, for property retired, the cost of which was included in the account of that date.**

NOTE A: This account shall not include any items representing titles to securities.

NOTE B: When any equipment is acquired under an agreement which provides that the cost shall be paid in installments, the cost (its money value at time of purchase) shall be charged to the appropriate road and equipment accounts at the time of its acquisition, and included in this account in the same manner as the cost of equipment purchased outright. When the par value of notes or other securities issued in payment, or in part payment, for such equipment is more (or less) than the actual cash value of the equipment at the time of the purchase, or of the proportion to which the securities are applicable, the difference between the par value of the securities and the actual cash value of the equipment, or of the proportion paid for by the securities, shall be charged (or credited) to the proper discount and premium accounts.

†In 88 10.701 to 10.784, inclusive, the numbers to the right of the decimal point correspond with the respective account numbers in Classification of income, profit and loss, and general balance sheet accounts for steam roads (general balance sheet accounts), Interstate Commerce Commission, May 19, 1914, as amended. Amendments are noted in brackets following sections affected. Cross references to accounts are made by citing the account number, e. g., account 703, instead of the corresponding section number (§ 10.703).

10.702 Improvements on leased railway property. This account shall include the accounting company's investment in additions and betterments made by it to railway property held under long-term lease or through control of the corporation owning the property and in existence at the date of the balance sheet. The accounting company's records shall be kept in such manner as to show the amount credited to this account subsequent to June 30, 1914, for property retired, the cost of which was included in the account at that date. The amounts included in this account shall be classified in the

*For statutory citation, see note to § 10.00-1.

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accounts provided in the classification for investment in road and equipment.**

NOTE: This account shall not include any items representing titles to securities.

10.703 Sinking funds. This account shall include the amount of cash, the ledger value of live securities of other companies, and other assets which are held by trustees of sinking and other funds for the purpose of redeeming outstanding obligations, including such assets so held in the hands of the accounting company's treasurer when the assets are segregated in a distinct fund; also amounts deposited with such trustees on account of mortgaged property sold the proceeds of which are to be held for the redemption of securities, and the par value of live securities issued or assumed by the accounting company and held in such funds. A separate account shall be kept for each fund. The title of each such account shall designate the obligation in support of which the fund is created.**

NOTE: In stating the balance sheet in the annual reports to the Commission the total amount of the funds and the par value of securities issued or assumed by the accounting company and held in the funds shall be shown in the short columns, and the net amount of the funds (total amount less securities issued or assumed) shall be shown in the long column.

10.704 Deposits in lieu of mortgaged property sold. This account shall include funds deposited with trustees, to be held until mortgaged property sold is replaced.*+

NOTE: In stating the balance sheet in the annual reports to the Commission the total amount of the funds and the par value of securities issued or assumed by the accounting company and held in the funds shall be shown in the short columns, and the net amount of the funds (total amount less securities issued or assumed) shall be shown in the long column.

10.705 Miscellaneous physical property. This account shall include the accounting company's investments in physical property other than transportation property assignable to accounts Nos. 701 and 702, including hotels, restaurants, commercial power plants, etc., which are entirely distinct from transportation property and are not operated in connection with the transportation service of the accounting company.

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10.706 Investments in affiliated companies. This account shall include the ledger value of the accounting company's investment advances to affiliated companies, also of its investment in securities issued or assumed by such companies, such securities not being held in special deposits or in special funds.

This account shall be subdivided:

(a) Stocks.

(b) Bonds.

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*For statutory citation, see note to § 10.00-1.

(c) Notes, including herein not only notes that run longer than 2 years and all notes of affiliated companies held as investments, but also notes payable on demand or within 2 years from the date of issue when it is mutually understood and intended that the notes shall not be enforced as current assets.

(d) Advances.

The accounting company's record shall be kept in such manner that the ledger value of securities pledged as collateral security for any of the accounting company's funded debt or short-term loans and the ledger value of securities unpledged may be shown separately in the annual report to the Commission.* [As amended Dec. 20, 1920]

NOTE A: Accounts with affiliated companies which are subject to current settlements, such as traffic and car-service balances, charges for material and supplies currently furnished, charges for repairs to equipment, etc., shall be classed as current assets or current liabilities, as may be appropriate. NOTE B: The term affiliated companies includes:

1. Controlled companies, including companies solely controlled by the accounting company, and also companies jointly controlled by the accounting company and others under a joint arrangement.

2. Controlling companies, including both companies solely controlling the accounting company, and companies which jointly control the accounting company under a joint arrangement.

3. Companies controlled by controlled companies.

4. Companies controlled by controlling companies.

By control is meant the ability to determine the action of a corporation. For the purposes of this account, the following are to be considered forms of control: (a) Right through title to securities issued or assumed to exercise the major part of the voting power in the controlled corporation.

(b) Right through agreement of some character or through some source other than title to securities, to name the majority of the board of directors, managers, or trustees of the controlled corporation.

(c) Right to foreclose a first lien upon all or a major part in value of the tangible property of the controlled corporation.

(d) Right to secure control in consequence of advances made for construction of the operating property of the controlled corporation.

(e) Right to control only in a specific respect the action of the controlled corporation.

A leasehold interest in the property of a corporation is not to be classed as a form of control over the lessor corporation.

Sole control is that which rests in one corporation.

Joint control is that which rests in two or more corporations and which is held under a joint arrangement.

NOTE C: The value of securities borrowed by the accounting company and pledged shall not be included in this account.

NOTE D: The value of securities pledged for purposes other than that of security for funded debt or short-term loans shall be included in account No. 703, "Sinking funds," No. 704, "Deposits in lieu of mortgaged property sold," No. 711, "Special deposits," or No. 721, "Insurance and other funds," as may be appropriate.

10.707 Other investments. This account shall include the ledger value of the accounting company's investment advances to nonaffiliated companies and to individuals, and of its investment in securities issued or assumed by such companies, such securities not being held in special deposits or in special funds; also miscellaneous investments not provided for elsewhere.

This account shall be subdivided:

(a) Stocks.

(b) Bonds.

*For statutory citation, see note to § 10.00-1.

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