FIN 07-20

A. The IDC will be accounted for in such a manner that it does not lose its identity in either the construction or plant-in-service stages. The IDC computations during the construction period are considered estimates as numerous changes occur during construction which affect cost allocations and costs. The IDC will be recalculated during the FCA. These calculations are to be reviewed independently by regional specialist and managers in the finance, economics, and repayment areas and adjustments made accordingly. During the construction period, IDC will be accounted for on the basis of a project or project unit, as defined in the authorizing act, as follows:

G.L Post Flag	Project Type	Project Cat
09	MP	17K	IDC

B. Since accrued costs and net disbursements are not usually the same, an equitable allocation of net disbursements related to accrued costs for the completed facilities transferred to plant accounts shall be obtained by proration. In the case of a multipurpose plant, such as a dam and reservoir that have been completed and transferred to plant in total, only that part of the costs of the multipurpose facility allocated to reimbursable functions subject to IDC will be considered as having been transferred insofar as the transfer of IDC to plant accounts is concerned. If a project is comprised of more than one unit or division, such as in the Pick-Sloan Missouri Basin Program, separate subsidiary records may be necessary for each unit or division. The necessity for these will generally be dictated by geographic relationships or repayment requirements as defined by authorizing acts.

C. When construction of a feature of a project or an addition or replacement is completed, the applicable portion of the interest in SGL 1720 will be transferred to the appropriate plant-in-service, SGL 1740, general ledger account. In SGL 1740, the interest during construction should be segregated into the multipurpose and other plant-in-service accounts applicable to each interest-bearing function. The IDC is not distributed to units of property. However, when a unit of property is retired or replaced, an equitable portion of IDC applicable to the retired or replaced unit will be credited to the plant-in-service account and charged to the replacement or retirement cost. Since IDC applicable to the retired or replaced unit is removed from the plant account, IDC will be charged on the unit constructed as a replacement unless financed with revenues.