Section 50 IAC 5.1-6-2 - Book cost determinativeAuthority: IC 6-1.1-8-42; IC 6-1.1-31-1
Affected: IC 6-1.1-8-26; IC 6-1.1-31
Sec. 2.
(a) The cost of depreciable property, both real and personal, as recorded on the public utility company's books and records, must be utilized in determining the value of the depreciable personal property subject to assessment.(b) The cost of all depreciable personal property of a public utility company shall be the total amount reflected on the books and records of the company as of the assessment date except as provided in section 3 of this rule.(c) Property may be depreciable personal property regardless of the account in which the property is carried on the books and records of the public utility company. For example, property classified on the public utility company's books and records as real property may nevertheless be depreciable personal property within the meaning of this article. This treatment is necessary to ensure the proper assessment of property, regardless of the accounting system used by the public utility company.(d) Except as otherwise provided in this article, property is deemed to be depreciable personal property when a depreciation deduction is allowable for federal income tax purposes.(e) The cost of additions and betterments is added to the original cost of the depreciable personal property. If an additional part is added or some other change is made in the fixed asset that increases its estimated useful life, production, or efficiency, or converts the property to a different use, it is a betterment. The expenditure is capitalized by adding it to the original cost of the asset. If a part is replaced with a similar part, the new part is shown as a new acquisition while the part replaced is deducted from the original cost of the asset.(f) In the event a taxpayer cannot determine from its books and records the cost of the depreciable property on the assessment date, it must use: (1) the cost per books as of the close of its annual financial period immediately prior to the assessment date and so indicate on its return;(2) the book cost as of the close of its last financial period will then be adjusted to reflect all acquisitions and disposals of depreciable property which have occurred between the acquisition or disposal date and the assessment date; and(3) installation costs and foundations applicable to machinery and equipment shall be reported and assessed on the same basis as the asset to which they apply.Department of Local Government Finance; 50 IAC 5.1-6-2; filed Dec 15, 1993, 5:00 p.m.: 17 IR 960; reinstated by IC 6-1.1-8-44, eff Jul 1, 2003