Sec. 32.5999  General.

    (a) Structure of the expense accounts. (1) The expense section of 
the system of accounts shall be organized by expense group summary 
account, and subsidiary record category (if required).
    (2) The expense section of this system of accounts shall be 
comprised of four major expense groups--Plant Specific Operations, Plant 
Nonspecific Operations, Customer Operations and Corporate Operations. 
Expenses to be recorded in Plant Specific and Plant Nonspecific 
Operations Expense Groups generally reflect cost associated with the 
various kinds of equipment identified in the plant asset accounts. 
Expenses to be recorded in the Customer Operations and Corporate 
Operations accounts reflect the costs of, or are associated with, 
functions performed by people, irrespective of the organization in which 
any particular function is performed.
    (3) Summary accounts within expense groups shall be used to describe 
aggregations of two or more accounts having a certain commonality. 
Summary accounts are assigned numbers so that they may be used by Class 
A telephone companies to aggregate accounts for reporting purposes; and 
as specifically directed, so that they may be used as accounts by Class 
B telephone companies.

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    (4) Accounts shall be maintained as prescribed in this section 
subject to the conditions described in Sec. 32.13 in subpart B. 
Subsidiary record categories may be required below the account level by 
this system of accounts or by Commission order.
    (b) Plant Specific Operations Expense. (1) The Plant Specific 
Operations Expense Accounts, 6110 through 6441, are used to record costs 
related to specific kinds of telecommunications plant.
    (2) The Plant Specific Operations Expense accounts predominantly 
mirror the telecommunications plant in service detail accounts and are 
numbered consistently with them; the first digit of the expense account 
being six (6) and the remaining digits being the same as the last three 
numbers of the related plant account. In classifying Plant Specific 
Operations expenses, the text of the corresponding plant account should 
be consulted to ensure appropriateness.
    (3) The Plant Specific Operations Expense accounts shall include the 
costs of inspecting, testing (except as specified in Account 6533, 
Testing Expense) and reporting on the condition of telecommunications 
plant to determine the need for repairs, replacements, rearrangements 
and changes; performing routine work to prevent trouble (except as 
specified in Account 6533), replacing items of plant other than 
retirement units; rearranging and changing the location of plant not 
retired; repairing material for reuse; restoring the condition of plant 
damaged by storms, floods, fire or other casualties (other than the cost 
of replacing retirement units); inspecting after repairs have been made; 
and receiving training to perform these kinds of work. Also included are 
the costs of direct supervision (immediate of first-level) and office 
support of this work.
    (4) In addition to the activities specified in paragraph (b)(3) of 
this section, the appropriate Plant Specific Operations Expense accounts 
shall include the cost of personnel whose principal job is the operation 
of plant equipment, such as general purpose computer operators, aircraft 
pilots, chauffeurs and shuttle bus drivers. However, when the operation 
of equipment is performed as part of other identifiable functions (such 
as the use of office equipment, capital tools or motor vehicles) the 
operators' cost shall be charged to accounts appropriate for those 
functions. (For costs of operator services personnel, see Accounts 6621, 
Call Completion Services, and 6622, Number Services, and for costs of 
test board personnel see Account 6533.)
    (c) Plant Nonspecific Operations Expense. The Plant Nonspecific 
Operations Expense accounts shall include expenses related to property 
held for future telecommunications use, provisioning expenses, network 
operations expenses, and depreciation and amortization expenses. 
Accounts in this group (except for Account 6540, Access Expense, and 
Accounts 6560 through 6565) shall include the costs of performing 
activities described in narratives for individual accounts. These costs 
shall also include the costs of supervision and office support of these 
activities.
    (d) Customer Operations Expense. The Customer Operations Expense 
accounts shall include the cost of performing customer related marketing 
and services activities described in narratives for individual accounts. 
These costs shall also include the costs of supervision, office support 
and training for these activities.
    (e) Corporate Operations Expense. The Corporate Operations Expense 
accounts shall include the costs of performing executive and planning 
activities and general and administrative activities described in 
narratives for individual accounts. These costs shall also include the 
costs of supervision, office support and training for these activities.
    (f) Expense matrix. The expense accounts shall be maintained by the 
following subsidiary record categories, as appropriate to each account. 
Such subsidiary record categories shall be reported as required by part 
43 of this Commission's Rules and Regulations.
    (1) Salaries and wages. This subsidiary record category shall 
include compensation to employees, such as; wages, salaries, 
commissions, bonuses, incentive awards and termination payments.
    (2) Benefits. This subsidiary record category shall include payroll 
related benefits on behalf of employees such as the following:


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Pensions
Savings plan contributions (company portion)
Worker's compensation required by law
Life, hospital, medical, dental, and vision plan insurance
Social Security and other payroll taxes.

    (3) Rents. (i) This subsidiary record category shall include amounts 
paid for the use of real and personal operating property. Amounts paid 
for real property shall be included in Account 6121, Land and Buildings 
Expense. This category includes payments for operating leases but does 
not include payments for capital leases.
    (ii) This subsidiary record category is applicable only to the Plant 
Specific Operations Expense accounts. Incidental rents, e.g., short-term 
rental car expense, shall be categorized as Other Expenses (see 
paragraph (f)(4) of this section) under the account which reflects the 
function for which the incidental rent was incurred.
    (4) Other expenses. This subsidiary record category shall include 
costs which cannot be classified to the other subsidiary record 
categories. Included are material and supplies, including provisioning 
(note also Account 6512, Provisioning Expense); contracted services; 
accident and damage payments, insurance premiums; traveling expenses and 
other miscellaneous costs.
    (5) Clearances. This subsidiary record category shall include 
amounts transferred to Construction accounts (see Sec. 32.2000 
(c)(2)(iii)), other Plant Specific Operations Expense accounts and/or 
Account 3100, Accumulated Depreciation (cost of removal; see 
Sec. 32.2000 (g)(1)(iii)), as appropriate, from Accounts 6112, Motor 
Vehicle Expense, 6113, Aircraft Expense, 6114, Special Purpose Vehicles 
Expense, 6116, Other Work Equipment Expense, 6534, Plant Operations 
Administration Expense, and 6535, Engineering Expense. There shall also 
be transfers to Construction or other Plant Specific Operations Expense 
accounts, as appropriate, from Account 6512, Provisioning Expense. With 
respect to these expenses, companies may establish such clearing 
accounts as they deem necessary to accomplish substantially the same 
results, provided that within 30 days of the opening of such accounts, 
companies shall notify the Commission of the nature and purpose thereof. 
Additional clearing accounts affecting other expense areas may be 
established with prior approval of the Commission. Should companies 
elect, the initial incurred subsidiary record category identification 
may be carried through to the final accounts without this Commission's 
approval.
    (g) Reimbursements. Reimbursements of actual costs incurred in 
connection with joint operations or projects repairing plant due to 
damages by others, and obligations to make changes in telecommunications 
plant (such as highway relocations), shall be credited to the accounts 
originally charged.
    (h) Expense accounts to be maintained.

                                                                        
------------------------------------------------------------------------
                                                      Class A    Class B
                   Account title                      account    account
------------------------------------------------------------------------
             Income Statement Accounts                                  
                                                                        
Plant specific operations expense:                                      
    Network support expense.......................  \1\ \2\ 61          
                                                            10      6110
    Motor vehicle expense.........................    \1\ 6112  ........
    Aircraft expense..............................    \1\ 6113  ........
    Special purpose vehicles expense..............    \1\ 6114  ........
    Garage work equipment expense.................    \1\ 6115  ........
    Other work equipment expense..................    \1\ 6116  ........
    General support expenses......................  \1\ \2\ 61          
                                                            20      6120
    Land and building expenses....................    \1\ 6121  ........
    Furniture and artworks expense................    \1\ 6122  ........
    Office equipment expense......................    \1\ 6123  ........
    General purpose computers expense.............    \1\ 6124  ........
    Central office switching expense..............  \1\ \2\ 62          
                                                            10      6210
    Analog electronic expense.....................    \1\ 6211  ........
    Digital electronic expense....................    \1\ 6212  ........
    Electro-mechanical expense....................    \1\ 6215  ........
    Operators system expense......................    \1\ 6220      6220
    Central office transmission expenses..........  \1\ \2\ 62          
                                                            30      6230
    Radio systems expense.........................    \1\ 6231  ........
    Circuit equipment expense.....................    \1\ 6232  ........
    Information origination/termination expense...  \1\ \2\ 63          
                                                            10      6310
    Station apparatus expense.....................    \1\ 6311  ........
    Large private branch exchange expense.........    \1\ 6341  ........
    Public telephone terminal equipment expense...    \1\ 6351  ........
    Other terminal equipment expense..............    \1\ 6362  ........
                                                                        
    Cable and wire facilities expenses............  \1\ \2\ 64          
                                                            10      6410
    Poles expense.................................    \1\ 6411  ........
    Aerial cable expense..........................    \1\ 6421  ........
    Underground cable expense.....................    \1\ 6422  ........
    Buried cable expense..........................    \1\ 6423  ........
    Submarine cable expense.......................    \1\ 6424  ........
    Deep sea cable expense........................    \1\ 6425  ........
    Intrabuilding network cable expense...........    \1\ 6426  ........
    Aerial wire expense...........................    \1\ 6431  ........
    Conduit systems expense.......................    \1\ 6441  ........

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Plant nonspecific operations expense:                                   
    Other property plant and equipment expenses...  \1\ \2\ 65          
                                                            10      6510
    Property held for future......................  ..........  ........
    Telecommunications use expense................    \1\ 6511  ........
    Provisioning expense..........................    \1\ 6512  ........
    Network operations expenses...................  \1\ \2\ 65          
                                                            30      6530
    Power expense.................................    \1\ 6531  ........
    Network administration expense................    \1\ 6532  ........
    Testing expense...............................    \1\ 6533  ........
    Plant operations administration expense.......    \1\ 6534  ........
    Engineering expense...........................    \1\ 6535  ........
    Access expense................................    \1\ 6540      6540
                                                                        
    Depreciation and amortization expenses........    \2\ 6560      6560
    Depreciation expense--telecommunications plant                      
     in service...................................        6561  ........
    Depreciation expense--property held for future                      
     telecommunications use.......................        6562  ........
    Amortization expense--tangible................        6563  ........
    Amortization expense--intangible..............        6564  ........
    Amortization expense--other...................        6565  ........
Customer operations expense:                                            
    Marketing.....................................  \1\ \2\ 66          
                                                            10      6610
    Product management............................    \1\ 6611  ........
    Sales.........................................    \1\ 6612  ........
    Product advertising...........................    \1\ 6613  ........
                                                                        
    Services......................................  \1\ \2\ 66          
                                                            20      6620
    Call completion services......................    \1\ 6621  ........
    Number services...............................    \1\ 6622  ........
    Customer services.............................    \1\ 6623  ........
Corporate operations expense:                                           
    Executive and planning........................  \1\ \2\ 67          
                                                            10      6710
    Executive.....................................    \1\ 6711  ........
    Planning......................................    \1\ 6712  ........
                                                                        
    General and administrative....................  \1\ \2\ 67          
                                                            20      6720
    Accounting and finance........................    \1\ 6721  ........
    External relations............................    \1\ 6722  ........
    Human resources...............................    \1\ 6723  ........
    Information management........................    \1\ 6724  ........
    Legal.........................................    \1\ 6725  ........
    Procurement...................................    \1\ 6726  ........
    Research and development......................    \1\ 6727  ........
    Other general and administrative..............    \1\ 6728  ........
    Provision for uncollectible notes receivable..        6790      6790
------------------------------------------------------------------------
\1\ Subsidiary record categories required in accordance with Sec.       
  32.5999(f) of this subpart.                                           
\2\ To be used by Class A telephone companies to summarize accounts for 
  reporting purposes.                                                   

[ 51 FR 43499 , Dec. 2, 1986, as amended at  52 FR 7580 , Mar. 12, 1987]