[Code of Federal Regulations]
[Title 7, Volume 11]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 7CFR1767.30]

[Page 887-890]
 
                          TITLE 7--AGRICULTURE
 
    CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE
 
PART 1767--ACCOUNTING REQUIREMENTS FOR RUS ELECTRIC BORROWERS--Table of Contents
 
                  Subpart B--Uniform System of Accounts
 
Sec. 1767.30  Sales expenses.

    The sales expense accounts identified in this section shall be used 
by all RUS borrowers.

                             Sales Expenses

                               (Operation)

911  Supervision
912  Demonstrating and Selling Expenses
913  Advertising Expenses
916  Miscellaneous Sales Expenses

                             Sales Expenses

                               (Operation)

                            911  Supervision

    This account shall include the cost of labor, employee pensions and 
benefits, social security and other payroll taxes, injuries and damages, 
and expenses incurred in the general direction and supervision of sales 
activities, except merchandising. Direct supervision of a specific 
activity, such as demonstrating, selling, or advertising shall be 
charged to the account wherein the costs of such activity are included. 
(See Sec. 1767.17(a).)

                 912  Demonstrating and Selling Expenses

    This account shall include the cost of labor, employee pensions and 
benefits, social security and other payroll taxes, injuries and damages, 
materials used, and expenses incurred in promotional, demonstrating, and 
selling activities, except by merchandising, the object of which is to 
promote or retain the use of utility services by present and prospective 
customers.

                                  Items

Labor:

    1. Demonstrating uses of utility services.
    2. Conducting cooking schools, preparing recipes, and related home 
service activities.
    3. Exhibitions, displays, lectures, and other programs designed to 
promote use of utility services.
    4. Experimental and development work in connection with new and 
improved appliances and equipment, prior to general public acceptance.
    5. Solicitation of new customers or of additional business from old 
customers, including commissions paid employees.
    6. Engineering and technical advice to present or prospective 
customers in connection with promoting or retaining the use of utility 
services.
    7. Special customer canvasses when their primary purpose is the 
retention of business or the promotion of new business.

Taxes:

    1. Federal and state unemployment.
    2. F.I.C.A.
    Employee Pensions and Benefits: The portion of employee pensions and 
benefits specifically identifiable with employees' labor costs charged 
herein or, in the absence of specific employee identification, the 
portion of employee pensions and benefits, allocated on the more 
equitable basis of either direct labor dollars or direct labor hours, 
applicable to the labor items detailed above, including:
    1. Accruals for or payments to pension funds or to insurance 
companies for pension purposes.
    2. Group and life insurance premiums (credit dividends received).
    3. Payments for medical and hospital services and expenses of 
employees when not the result of occupational injuries.
    4. Payments for accident, sickness, hospital, and death benefits or 
insurance.
    5. Payments to employees incapacitated for service or on leave of 
absence beyond periods normally allowed when not the result of 
occupational injuries or in excess of statutory awards.
    6. Expenses in connection with educational and recreational 
activities for the benefit of employees.

Insurance:

    1. Premiums payable to insurance companies for protection against 
claims from injuries and damages by employees or others, such as public 
liability, property damages, casualty, employee liability, etc., and 
amounts credited to Account 228.2, Accumulated Provision for Injuries 
and Damage, for similar protection.
    2. Losses not covered by insurance or reserve accruals on account of 
injuries or deaths to employees or others and damages to the property of 
others.
    3. Fees and expenses of claim investigators.

[[Page 888]]

    4. Payment of awards to claimants for court costs and attorneys' 
services.
    5. Medical and hospital service and expenses for employees as the 
result of occupational injuries or resulting from claims of others.
    6. Compensation payments under workmen's compensation laws.
    7. Compensation paid while incapacitated as the result of 
occupational injuries. (See Account 924, Note A.)
    8. Cost of safety, accident prevention, and similar educational 
activities.

Materials and Expenses:

    1. Supplies and expenses pertaining to demonstration, experimental, 
and development activities.
    2. Booth and temporary space rental.
    3. Loss in value on equipment and appliances used for demonstration 
purposes.
    4. Transportation, meals, and incidental expenses.

                        913 Advertising Expenses

    This account shall include the cost of labor, employee pensions and 
benefits, social security and other payroll taxes, injuries and damages, 
materials used, and expenses incurred in advertising designed to promote 
or retain the use of utility service, except advertising the sale of 
merchandise by the utility.

                                  Items

Labor:

    1. Direct supervision of department.
    2. Preparing advertising material for newspapers, periodicals, and 
billboards, and preparing and conducting motion pictures, radio, and 
television programs.
    3. Preparing booklets and bulletins used in direct mail advertising.
    4. Preparing window and other displays.
    5. Clerical and stenographic work.
    6. Investigating advertising agencies and media and conducting 
negotiations in connection with the placement and subject matter of 
sales advertising.

Taxes:

    1. Federal and state unemployment.
    2. F.I.C.A.
    Employee Pensions and Benefits: The portion of employee pensions and 
benefits specifically identifiable with employees' labor costs charged 
herein or, in the absence of specific employee identification, the 
portion of employee pensions and benefits, allocated on the more 
equitable basis of either direct labor dollars or direct labor hours, 
applicable to the labor items detailed above, including:
    1. Accruals for or payments to pension funds or to insurance 
companies for pension purposes.
    2. Group and life insurance premiums (credit dividends received).
    3. Payments for medical and hospital services and expenses of 
employees when not the result of occupational injuries.
    4. Payments for accident, sickness, hospital, and death benefits or 
insurance.
    5. Payments to employees incapacitated for service or on leave of 
absence beyond periods normally allowed when not the result of 
occupational injuries or in excess of statutory awards.
    6. Expenses in connection with educational and recreational 
activities for the benefit of employees.

Insurance:

    1. Premiums payable to insurance companies for protection against 
claims from injuries and damages by employees or others, such as public 
liability, property damages, casualty, employee liability, etc., and 
amounts credited to Account 228.2, Accumulated Provision for Injuries 
and Damage, for similar protection.
    2. Losses not covered by insurance or reserve accruals on account of 
injuries or deaths to employees or others and damages to the property of 
others.
    3. Fees and expenses of claim investigators.
    4. Payment of awards to claimants for court costs and attorneys' 
services.
    5. Medical and hospital service and expenses for employees as the 
result of occupational injuries or resulting from claims of others.
    6. Compensation payments under workmen's compensation laws.
    7. Compensation paid while incapacitated as the result of 
occupational injuries. (See Account 924, Note A.)
    8. Cost of safety, accident prevention, and similar educational 
activities.

Materials and Expenses:

    1. Advertising in newspapers, periodicals, billboards, and radio for 
sales promotion purposes, but not including institutional or goodwill 
advertising includible in Account 930.1, General Advertising Expenses.
    2. Materials and services given as prizes or otherwise in connection 
with civic lighting contests, canning, or cooking contests, and bazaars 
in order to publicize and promote the use of utility services.
    3. Fees and expenses of advertising agencies and commercial artists.
    4. Novelties for general distribution.
    5. Postage on direct mail advertising.
    6. Premiums distributed generally, such as recipe books when not 
offered as inducement to purchase appliances.
    7. Printing booklets, dodgers, and bulletins.
    8. Supplies and expenses in preparing advertising material.
    9. Office supplies and expenses.


[[Page 889]]


    Note A: The cost of advertisements which set forth the value or 
advantages of utility service without reference to specific appliances, 
or, if reference is made to appliances, invites the reader to purchase 
appliances from his dealer or refer to appliances not carried for sale 
by the utility, shall be considered sales promotion advertising and 
charged to this account. However, advertisements which are limited to 
specific makes of appliances sold by the utility and price and terms, 
thereof, without referring to the value or advantages of utility 
service, shall be considered as merchandise advertising and the cost 
shall be charged to Costs and Expenses of Merchandising, Jobbing and 
Contract Work, Account 416.
    Note B: Advertisements which substantially mention or refer to the 
value or advantages of utility service, together with specific reference 
to makes of appliance sold by the utility and the price, and terms, 
thereof, and designed for the joint purpose of increasing the use of 
utility service and the sales of appliances, shall be considered as a 
combination advertisement and the costs shall be distributed between 
this account and Account 416 on the basis of space, time, or other 
proportional factors.
    Note C: Exclude from this account and charge to Account 930.2, 
Miscellaneous General Expenses, the cost of publication of stockholder 
reports, dividend notices, bond redemption notices, financial 
statements, and other notices of a general corporate character. Also 
exclude all institutional or goodwill advertising. (See Account 930.1, 
General Advertising Expenses.)

                    916  Miscellaneous Sales Expenses

    This account shall include the cost of labor, employee pensions and 
benefits, social security and other payroll taxes, injuries and damages, 
property insurance, property taxes, materials used, and expenses 
incurred in connection with sales activities, except merchandising, 
which are not includible in other sales expense accounts.

                                  Items

Labor:

    1. General clerical and stenographic work not assigned to specific 
functions.
    2. Special analysis of customer accounts and other statistical work 
for sales purposes not a part of the regular customer accounting and 
billing routine.
    3. Miscellaneous labor.

Taxes:

    1. Federal and state unemployment.
    2. F.I.C.A.
    3. Property.
    Employee Pensions and Benefits: The portion of employee pensions and 
benefits specifically identifiable with employees' labor costs charged 
herein or, in the absence of specific employee identification, the 
portion of employee pensions and benefits, allocated on the more 
equitable basis of either direct labor dollars or direct labor hours, 
applicable to the labor items detailed above, including:
    1. Accruals for or payments to pension funds or to insurance 
companies for pension purposes.
    2. Group and life insurance premiums (credit dividends received).
    3. Payments for medical and hospital services and expenses of 
employees when not the result of occupational injuries.
    4. Payments for accident, sickness, hospital, and death benefits or 
insurance.
    5. Payments to employees incapacitated for service or on leave of 
absence beyond periods normally allowed when not the result of 
occupational injuries or in excess of statutory awards.
    6. Expenses in connection with educational and recreational 
activities for the benefit of employees.

Insurance:

    1. Premiums payable to insurance companies for fire, storm, 
burglary, boiler explosion, lightning, fidelity, riot, and similar 
insurance.
    2. Amounts credited to Account 228.1, Accumulated Provision for 
Property Insurance, for similar protection.
    3. Special costs incurred in procuring insurance.
    4. Insurance inspection service.
    5. Insurance counsel, brokerage fees, and expenses.
    6. Premiums payable to insurance companies for protection against 
claims from injuries and damages by employees or others, such as public 
liability, property damages, casualty, employee liability, etc., and 
amounts credited to Account 228.2, Accumulated Provision for Injuries 
and Damage, for similar protection.
    7. Losses not covered by insurance or reserve accruals on account of 
injuries or deaths to employees or others and damages to the property of 
others.
    8. Fees and expenses of claim investigators.
    9. Payment of awards to claimants for court costs and attorneys' 
services.
    10. Medical and hospital service and expenses for employees as the 
result of occupational injuries or resulting from claims of others.
    11. Compensation payments under workmen's compensation laws.
    12. Compensation paid while incapacitated as the result of 
occupational injuries. (See Account 924, Note A.)
    13. Cost of safety, accident prevention, and similar educational 
activities.

Materials and Expenses:

    1. Communication service.

[[Page 890]]

    2. Printing, postage, office supplies, and expenses applicable to 
sales activities, except those chargeable to Account 913, Advertising 
Expenses.

[58 FR 59825, Nov. 10, 1993, as amended at 62 FR 42315, Aug. 6, 1997]