THE ACCOUNTING SYSTEM 233
“ Expenditures for tentative or preliminary surveys shall be
carried in a suspense account until it is determined whether or
not to continue the work. If the project is continued, expendi-
tures for all surveys in connection therewith shall then be trans-
ferred to this account, and, if abandoned, to Operating Expenses,
Income, or Profit and Loss, as may be appropriate.”
Interest during Construction, Interstate Commerce Commis-
sion. — The Interstate Commerce Commission in the instruc-
tions relating to “ interest during construction ” says:
“ When any bonds, notes, or other evidences of indebtedness
are sold, or any interest-bearing debt is incurred for acquisition
and construction of original road and equipment, extensions,
additions, and betterments, the interest, accruing on the part of
the debt representing the cost of property chargeable to road and
equipment accounts (less interest, if any, allowed by depositaries
on unexpended balances) after such funds become available for
use and before the receipt or the completion or coming into serv-
ice of the property so acquired shall be charged to this account.
“ When such securities are sold at a premium the proportion
of such premium assignable to the time between the date of the
actual issuance of the securities and the time when the property
acquired or the improvement made becomes available for serv-
ice shall be credited to this account.
“This account shall also include such proportion of the dis-
count and expense on funded debt issued for the acquisition of
original road, original equipment, road extensions, additions, and
betterments, as is equitably assignable to the period between the
date of the actual issuance of securities and the time when the
property acquired or the improvement made becomes available
for the service for which it is intended. The proportion of dis-
count and expense thus chargeable shall be determined by the
ratio between the period prior to the completion or coming into
service of the facilities or improvements acquired and the period
of the entire life of the securities issued.
“This account shall also include reasonable charges for in-
terest, during the construction period before the property be-
comes available for service, on the carrier’s own funds expended
for construction purposes.”
Application of Accounting Principles to the Unlimited Life
Method. — Under the Unlimited Life Method of procedure,
