Code of Federal Regulations Title 49. Transportation 49 CFR § 1201.4-1 4–1 [1201.4–1] Method

(a) There shall be charged monthly to operating expenses or other appropriate accounts and credited to account 735, Accumulated depreciation;  Road and equipment property, during the service life of depreciable road and equipment property, includable in accounts classed as depreciable, amounts which will approximate the loss in service value not restored by current repairs or covered by insurance. The charges for accruing depreciation currently shall be computed in conformity with the group plan by applying to the cost of property such percentage rates as will distribute the service value by the straight-line method in equal annual charges to operating expenses or other accounts during the estimated life of the property. In the case of track accounts 8, 9 and 11, service value shall reflect net salvage value. For road property, the cost shall be original cost or estimated original cost, as used in the valuation records, adjusted to current date. If a carrier submits proof that the actual cost of depreciable property is substantially different from cost figures in the valuation records, the carrier may, with the approval of the Board, use such cost figures as the depreciation base.

(b) The term group plan means the plan under which depreciation charges are accrued upon the basis of the cost of depreciable property includable in accounts classed as depreciable using the service lives of the individual depreciable units in the accounts and properly weighing to determine the composite annual rate of depreciation.

(c) For the purpose of the group plan of depreciation accounting, the following primary accounts are classed as depreciable accounts:

Road accounts:

3. Grading.

4. Other right-of-way expenditures.

5. Tunnels and subways.

6. Bridges, trestles and culverts.

7. Elevated structures.

8. Ties.

9. Rails and other track material.

11. Ballast.

13. Fences, snowsheds, and signs.

16. Station and office buildings.

17. Roadway buildings.

18. Water stations.

19. Fuel stations.

20. Shops and enginehouses.

22. Storage warehouses.

23. Wharves and docks.

24. Coal and ore wharves.

25. TOFC/COFC terminals.

26. Communication systems.

27. Signals and interlockers.

29. Power plants.

31. Power transmission systems.

35. Miscellaneous structures.

37. Roadway machines.

39. Public improvements-construction.

44. Shop machinery.

45. Power plant machinery.

Equipment accounts:

52. Locomotives.

53. Freight-train cars.

54. Passenger-train cars.

55. Highway revenue equipment.

56. Floating equipment.

57. Work equipment.

58. Miscellaneous equipment.

59. Computer systems and word processing equipment.

(d) When abandonment of a branch line or other important segment of the track structure or other part of the plant for which depreciation charges are not includable in the accounts as foreseeable within a reasonable period of time due to exhaustion of traffic, obsolescence or other causes, application may be made to the Board for authority to record a suitable provision in anticipation of a probable loss.