WPC% 2MB;R ZCourier 10cpinCourier 10cpiCG Times (Scalable)CG Times Bold (Scalable)HP LaserJet IIISi in front 812HPLASIII.PRSx  @HX@|D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDdDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddxHxxHvppDXd<"dxtldpxxd3|x Times (Scalable)HPLAS5SI.PRSXj\  P6G;\E$NXP2wS;Z X'#o\  PCynXP# 3|wCourier 10cpiCG Times (Scalable)CG Times Bold (Scalable)HP LaserJet IIISi in front 812HPLASIII.PRSx  @H zX@2 X> *?xxx,wx6X@8;X@8wC;,[hXw P7XPANE,, P7P@NE,"!3_ p^77zC;,"sXz_ p^7X>x6X@8;X@ nn"Sh5^;C]ddCCCdCCCCddddddddddCCȲY~~wCN~sk~CCCddCYdYdYCdd88d8ddddJN8ddddYYdYddddddCddddddddd8YYYYYY~Y~Y~Y~YC8C8C8C8ddddddddddYdddddsdddddddd~d~d~d~ddddddddd8ddddoddd~d~d~8~8vddddddkNkdkd~d~d~ddddddYCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCYQQddddddFddddFCChhd44ddzzdddwooChdF"Ȑdhd岲dCCȐzȲxCddodȐȅdCdYdsȐ]ȐȐȧzȐUwŐdȐYYCCCCŐz~ozoY~NYdYC8YooYdYzsdzdd~YYzozzz~CdzYzzzzCCdddddddzCsdYCx"`H2 : ^ENluuNNNuNNNNuuuuuuuuuuNNhN[}NNNuuNhuhuhNuuAAuAuuuuV[AuuuuhhuhuuuuuuNuuuuuuuuuAhhhhhhhhhhNANANANAuuuuuuuuuuhuuuuuuuuuuuuuuuuuuuuuuuuuAuuuuuuuuuAAuuuuuu}[}u}uuuuuuuuuhNuuNNNWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNuuuNh__uuuuuuRuuuuRNNyyu<<uuuuuNyuR"uyuuNNxNuuuuNuhulcuhhNNNNh[huhNAhhuhuuuhhNuhNNuuuuuuuNuhNx2#> %cP"`H2 : ^ENluuNNNuNNNNuuuuuuuuuuNNu[pNNNuuNuhhRuANAuh[NuuuhuuuuuuuuuNuuuuuuuuAuuuuuhhhhh[A[A[A[AuuuuuuuuuuuuuuuuuuuuuuuuuuAuuu[uuuu[Auuuu[uuuuuuhNuuNNNWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNuuuNuccuuuuuuRuuuuRNNu<<uuuuuNuR"uuuNNxNuuuuNuhupcuuuNNNNh[hhh[Ahhuhuuuhh[uhNNuuuuuuuNuhNx"Sh5^;C]ddCCCdCCCCddddddddddCCȲdzN`zoȐCCCddCdoYoYFdo8Co8odooYNCodddYdddddddddCddddddddo8dddddϐYYYYYN8N8N8N8oddddooooddoddddzoddddddodddddddddood8doddNorddoddN8ooddddoNododdddoooooȐdYCddCCCWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNdddCdUUddddddFddddFCCssd44ddzzddd~ooCsdF"Ȑdsd岲dCCȐzȲxCddodȐȅdCdYdsȐ`ȐȐȮzȐUwŐdȐddCCCCŐzozoYNYYYN8YooYdYzzdzddYYzozzzNdzYzzzzCCdddddddzCzdYCx2ZE#%?xxx,wx6X@8;X@8wC;,[hXw P7XPANE,, P7P@NE,"!3_ p^77zC;,"sXz_ p^7Xs\s\wpc\ aA#XP\  P6Q[hXP# #^\  P6Q,P# FEDERAL COMMUNICATIONS COMMISSION #XP\  P6Q[hXP#у ;Washington, D.C. 20554 OSeptember 1, 1987 NIn reply refer to:  X4Nl RAO Letter 9 (# (#\Responsible Accounting Officers  xPart 32, Uniform System of Accounts for Class A and Class B Carriers-Inventories and Property Leased to Others  Y 4 "Accounting provisions included in Appendix C to the Report and Order in Docket 86-111  x/(released February 6, 1987), which amended Part 32, have prompted several questions with  xrespect to accounting for customer premises equipment and large private branch exchanges. The  xamendment in Appendix C provides that Account 2311, Station Apparatus, and Account 2341,  xLarge Private Branch Exchanges, shall be used only by companies that have been permitted to  xoffer tariffed CPE beyond December 31, 1987. This provision has raised concern among some  x/companies which claim that companies will continue to retain ownership in such assets even  xVthough they will not be provided to customers under tariff. This letter not only provides some  Y>4 x/interpretive guidance on the issue raised, but also anticipates, for carrier planning purposes, certain changes which may be required to accommodate the recommended accounting.  "Under the Commission's rules, carriers may now engage in nonregulated activities which,  xfor example, may include the sales of Customer Premises Equipment or the lease of property  xlunder operating-type, direct financing-type or sales-type leases. When these activities are  xconducted by the carriers in the same corporate entity that provides regulated telecommunications  Y4 xservices, the Report and Order in CC Docket 86-111 generally requires the use of accounts  xZformerly regarded as "purely regulated accounts". Distinctions between regulated activities and  xtnonregulated activities (for activities that have been preemptively deregulated or that have never  xbeen regulated) are made prior to the separations process between interstate and intrastate  YA4 xjurisdictions. Because the Report and Order provides for the use of "regulated accounts", we are  xherein providing instructions for the handling of nonregulated activities which involve inventories held for sale or lease and property under lease to others.  "First, CPE and Large PBXs held in inventory for sale or for lease, shall be classified to  xAccount 1220, Material and Supplies. Any other property acquired and held for sale or lease for  xa nonregulated activity, when the activity involves common or joint use of assets or resources  xMand is not conducted through an affiliate, should be classified to this account, as well. However,  xcarriers should maintain this account in sufficient detail to be able to classify materials and  xsupplies held for company use separate from property held for sale or lease in a nonregulated  xMactivity. At this time, subaccounts or subsidiary records are recommended for (i) materials and supplies and (ii) property held for sale or lease. ")0*0*0*V)"Ԍ Second, any property or equipment that is leased to others under operating leases should   be reclassified to the proper plant and equipment accounts. With respect to CPE and Large   ZPBXs, the continued use of, respectively, Accounts 2311 and 2341, will provide the correct   classification of these items when leased to others under operating leases, and it is anticipated that the retention of these accounts in Part 32 will be necessary for this purpose.  Third, in those cases where property is leased to others under a sales-type lease or a   direct financingtype lease agreement, the asset should be removed from the books and the   present value of the amount due under the lease should be recorded as a receivable in Account   1410, Other Noncurrent Assets. The current portion of the receivable should be reclassified to   Account 1190, Other Accounts Receivable. Carriers should maintain these accounts in sufficient   detail to be able to classify the investment in leases from other accounts receivable, and subaccounts or subsidiary records are recommended for this purpose.  This letter is issued under Section 0.291 of the Commission's rules. Applications for   review under Section 1.115 of the Commission's rules must be filed within 30 days from the  Y-date indicated above (See Section 1.4(b)(4) of the Commission's rules).  If you have any questions contact the Chief of the Accounting Systems Branch at (202) 4180810. ` `  hh,VppSincerely, ` `  hh,VppKenneth P. Moran, ` `  hh,VppActing Chief ` `  hh,VppAccounting and Audits Division  $w