Code of Federal Regulations Title 49. Transportation 49 CFR § 1201.721 721 Investments and advances;  affiliated companies

Note A:  Accounts with affiliated companies which are subject to current settlement, if their collection is reasonably assured, shall be classed as current assets, and if settlement is deferred beyond one year such items shall be transferred to this account.

Note B:  The term affiliated companies (also see definition 5(a)) includes:

1. Controlled companies, including companies solely controlled by the accounting company, and also companies jointly controlled by the accounting company and others under a joint arrangement.

2. Controlling companies, including both companies solely controlling the accounting company, and companies which jointly control the accounting company under a joint arrangement.

3. Companies controlled by controlled companies.

4. Companies controlled by controlling companies.

By control (also see definition 5(a)) is meant the ability to determine the action of a corporation. For the purposes of this account, the following are to be considered forms of control:

(a) Right through title to securities issued or assumed to exercise the major part of the voting power in the controlled corporation.

(b) Right through agreement or source other than title to securities, to name the majority of the board of directors, managers, or trustees of the controlled corporation.

(c) Right to foreclose a first lien upon all or a major part in value of the tangible property of the controlled corporation.

(d) Right to secure control because of advances made for construction of the operating property of the controlled corporation.

(e) Right to control only in a specific respect the action of the controlled corporation.

A leasehold interest in the property of a corporation is not considered a form of control over the lessor corporation.

Sole control is that which rests in one corporation.

Joint control is that which rests in two or more corporations and which is held under a joint arrangement.

Note C:  The value of securities borrowed by the accounting company and pledged shall not be included in this account. A memorandum record shall be kept.

Note D:  The value of securities pledged for purposes other than that of security for funded debt or short-term loans shall be included in accounts 715, “Sinking funds,” 716, “Capital funds,” or 717, “Other funds,” as appropriate.