Sec.  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
    Sec. 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]