N.Y. Comp. Codes R. & Regs. tit. 16 § 462.6

Current through Register Vol. 46, No. 45, November 2, 2024

Section 462.6 - Discount, expense, and premium on long-term debt

(a) A discount, expense, and premium account shall be maintained for each class and series of long-term debt (including receivers' certificates) issued or assumed by the utility, in which shall be recorded the discount, expense, and premium associated with the issuance and sale of each such class and series of debt.

(b) In stating the balance sheet, the total of the debit balances (discount plus expense, or expense less premium) remaining in those accounts having debit balances, shall be reported under account 140, Unamortized Debt Discount and Expense, and the total of the credit balances (premium less expense) remaining in those accounts having credit balances shall be reported under account 240, Unamortized Premium on Debt. Accounts with debit balances shall not be set off by accounts with credit balances.

(c) The discount, expense, and premium referred to above shall be amortized over the life of the respective issues under such a plan as will equitably distribute the amounts over the life of the securities. The amortization shall be on a monthly basis, and the amounts thereof shall be charged to account 531, Amortization of Debt Discount and Expense, or credited to account 532, Amortization of Premium on Debt--Credit, as may be appropriate. The utility may, however, accelerate the charging off of discount and expense by charges to account 531, Amortization of Debt Discount and Expense, or to account 414, Miscellaneous Debits to Surplus.

(d) When any long-term debt is reacquired or redeemed without being converted into another form of long-term debt and when the transaction is not in connection with a refunding operation, the unamortized debt discount and expense or premium applicable to the debt reacquired or redeemed shall be cleared from the accounts. If a debit, such amount may be distributed in whole or in part to either account 531, Amortization of Debt Discount and Expense, or to account 414, Miscellaneous Debits to Surplus; or, if a credit, to either account 532, Amortization of Premium on Debt--Credit, or account 401, Miscellaneous Credits to Surplus. The difference, if any, between the face amount of the debt reacquired or redeemed, and the amount paid upon reacquirement shall be distributed, if a debit, to either account 538, Miscellaneous Income Deductions, or account 414, Miscellaneous Debits to Surplus; or, if a credit, to either account 526, Miscellaneous Non-operating Revenues, or account 401, Miscellaneous Credits to Surplus.

(e) When the redemption of one issue or series of bonds or other long-term obligations is financed by another issue or series before the date of maturity of the first issue, the accounting shall be as provided in subdivision (d) unless otherwise ordered or directed by the commission.

(f) Discount, expense, or premium on debt shall not be included as part of the cost of constructing or acquiring any property, tangible or intanglible, except under the provisions of section 463.4(a)(14) of this Title.

N.Y. Comp. Codes R. & Regs. Tit. 16 § 462.6