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Current as of October 02, 2022 | Updated by FindLaw Staff
Class I railroads shall report the costs of repairing freight train cars by car types.
(a) The accounting for freight train car repair costs shall agree with the applicable instructions and texts of accounts in 49 CFR Part 1201 relating to the equipment repair process (see Note A).
(b) Railroads may assign either actual costs, standard costs, or a combination of both to the accounting process. Standard costs, if used, shall recognize the differences in performing repairs on various types of equipment, and the differences related to specific repair facilities. Standard costs shall be based on adequate operational data which are reviewed at least annually. The resulting variances (price, efficiency, capacity, etc.) shall be reasonably allocated back to the car types to derive the amounts reported in Form R–1.
(c) Railroads shall report repair costs by the freight train car types shown in Schedule 415 of Form R–1. In assigning repair costs, railroads may use either one of the following methodologies:
Level I: Job Order Cost System
Railroads may use a job order cost system for assigning repair costs to the car types for freight train cars. Under this methodology, railroads shall directly match direct labor and materials with the specific unit of equipment that was repaired. Actual costs, standard costs, or a combination of both may be used as stated above.
Level II: Alternative Repair Costs Methodology
Railroads not using the job order cost system shall report freight train car repair costs by using the methodology described below:
(1) The repair costs relating to heavy, program, or project repairs of freight train cars shall be directly assigned to the car types repaired by using actual or standard costs. A heavy repair is defined as a repair that is relatively so material in cost, repair time, or physical damage that management's involvement in the determination of the repair to be made is necessary and relatively greater than usual. Program or project repairs are those repairs which are performed under a predetermined plan where estimates costs, time periods, and car types to be repaired are identified.
(2) The repair costs relating to light and running repairs of system cars shall be allocated to the car types by using the Association of American Railroads' Car Repair Billing System (CRBS) as the process for distributing light and running repairs. The CRBS will be the tracking system for recording the number of repairs, the car types and types of repairs. Then by applying the CRBS standard costs to the particular repairs, standard costs relationships by car type can be developed and used to distribute actual light and running repair cost pools to the car types.
(3) Railroads shall match repair costs billed by and paid to foreign roads with the car types that were repaired. Foreign billings for light and running repairs are usually conducted through CRBS, and therefore, the car types can be identified. For heavy off-line repairs, car type identification is possible because system management is generally involved with the authorization of such heavy repairs and car identification numbers are generally included in the billing process.
(4) Repair costs relating to foreign freight train cars shall also be reported by car types. However, a separate breakdown between foreign and system repair costs is not required for Board reporting purposes. Car type identification for light and running repairs to foreign cars can be obtained from CRBS tapes. The cost of heavy repairs to foreign cars should be accumulated by car types. The resulting expense credits from foreign railroads should be assigned to the car types to which they relate.
(5) Railroads shall match any resulting expense credits with the car types to which they relate. This can occur, for example, when a railroad is charged with the repair costs of system cars, but the responsibility of the repair ultimately rests with and is paid by a foreign road.
(d) Railroads shall submit to the Board any repair cost by car type methodology which does not agree with item (c) above. The Board shall review the methodology and determine if it is acceptable for reporting purposes.
(e) Railroads may submit justification and supporting documents requesting waiver from provisions required by this instruction. This provision is intended to provide relief for those smaller Class I railroads that might be unduly burdened by the cost of developing and maintaining the required system. Waivers shall be directed to the Board's Accounting and Valuation Board.
(f) Equipment repair cost records, including the allocation methods used, shall be maintained and made available to the Board upon request.
Note A: The following accounts and reference pertain to the freight train car repair process:
11–22–42
21–22–42
39–22–42
40–22–42
41–22–42
61–22–42
Instruction 2–12, Units of property rebuilt or converted.
Cite this article: FindLaw.com - Code of Federal Regulations Title 49. Transportation 49 CFR § 1201.2-21 2–21 [1201.2–21] Freight train car repair costing - last updated October 02, 2022 | https://codes.findlaw.com/cfr/title-49-transportation/cfr-sect-49-1201-2-21/
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